Mary and co-hosts warn that FAFSA delays have triggered a 10% drop in college deposit payments. They project two to three private colleges will close each week from October 2024 through spring 2025, potentially totaling over 30 closures as institutions face revenue shortfalls.
Chapters
Yeah. So as of right now, obviously it's late July. College is going to start in a few short weeks. So what would you say the impact of the FAFSA debacle is going to have this fall?
There's a FAFSA debacle?
I didn't know that, Mary.
I hate to be the one to tell you.
Thanks. Yeah, you just stunned me. That was funny.
That was sarcasm on my part.
It's going to be a mess.
It's going to be a mess.
And I think, you know, I've talked about this a couple of times on the podcast. What I'm hearing, both hearing and reading in both the media and the college leaders that I talk to, is something called prior year-to-date deposits, which is students, whether they're freshmen or seniors like yourself, sending in their deposits, usually a couple hundred dollars, say, hey, I'm going to be there.
And it's about—
it's down about 10%, give or take.
Little bit higher some places, a little bit lower some places.
So the vision that I see on this is as colleges start to realize that their revenue for that fall semester, this fall semester, is not where it needs to be, they're going to look ahead to December and say this is it. Or maybe some might look ahead into the, into the first semester, the spring semester of 2025, and say All right, we're out of here, but we can hold on until this—
until May of 2025.
As we talked about before, we're looking about one private college closure per week. Not quite.
I'm thinking we're looking, starting in October, November this year, into March, maybe April next year, 2 to 3 private colleges closing per week. And that may not sound like much in a single case, But envision 2 colleges a week closing for 4 months.
That's almost— that's more than 30 colleges closing in a short period of time. And there will be impacts to the industry.
I'm not smart enough, Mary, to know what those will be.
But I worry that many, many future college consumers will start to categorize private colleges as high risk and start to focus more on publics.
That's not fair and that's not reasonable because like Lindenwood, there are many, many, many strong private colleges.
But you need to use these— the students need to use tools like what you and I promote, which is the College Viability App.
And again, I'll remind listeners that we have the 2024 Private College Viability App for students and families, and we also have a similar version for public colleges.
