In a sense, schools are like a business. Students are the consumers, and they are sold a product of education. As with any business, a slowdown in consumer spending can affect how profitable operations will be. In today’s struggling economic times, small colleges and universities are finding it harder to stay afloat.

College closings are not new; in fact they occur every year. However, given our unstable economy and personal financial situations, a larger percentage of students may not be returning to school in future semesters than in prior years. Competition also fuels this decline in certain college populations. Small private schools have to present themselves in a way that shows students it is more beneficial to attend their institutions rather than public ones.

Colleges also took on debt to assist in operating costs. As with many home-owners and businesses, debt payments have surged to levels colleges are unable to keep up with. As people continue to re-evaluate their own short and long term finances, education costs may be heavily considered. Alternative venues, such as public schools opposed to private, can become more of necessity than many think in the future.

Niche colleges are taking the worse hit due to their limited recruiting ability. Also, banks are resistant to give loans to students attending colleges with a high drop out percentage. As students find themselves in a tougher position to get financial assistance, colleges will feel the effect of lower applicants than recent years.

Although many believe this is not a short term problem, future hope can be seen in terms of helping students get to college. President-elect Barack Obama has proposed a bill to assist students in tuition payments. His proposal will contribute tax benefits to students who complete certain community services requirements annually. But whether or not it will actually help struggling colleges and college students, given the remarkable economic times, remains to be seen.

To read more about struggling colleges, go here.