The Deathpool Dispatch
A Newsletter from UniversityDeathpool.com
April 2025 Edition
From the Desk of Jim Long
Tariffs, Tumbling Endowments, and DOE Policies: The New Trifecta of Doom?
Just when you think the higher education sector might catch its breath, we get hit from three directions. Market volatility—spurred in part by international tariff disputes—has wiped out chunks of institutional endowments. For many small private colleges, this is the oxygen line. At the same time, the Department of Education is proposing new outcome-based regulations that could reclassify struggling institutions as "underperforming," restricting federal aid access. For the universities in our bottom quartile, this isn’t just policy—it’s potentially fatal.
There’s no joy in predicting closures. But as always, I’d rather call the fire than pretend it’s just a warm breeze. Let’s look at the data.
Data Snapshot: Are We Still Shrinking?
💥 25% of U.S. private, not-for-profit universities are at significant fiscal and academic risk by 2028.
Source: Horn, M. B. (2024, August 20). Will 25 percent of colleges consolidate? An update on a prediction. Forbes. https://www.forbes.com/sites/michaelhorn/2024/08/13/will-25-percent-of-colleges-consolidate-an-update-on-a-prediction
Our updated map now includes the latest endowment projections and adjusted CFI scores. Check it out: University Survivability Map
Feature Post: "The Wilting of the Ivy"
Even the elite aren't immune. Our latest breakdown ranks Ivy League institutions by projected 2028 viability, and the results may surprise you. Endowment isn’t everything when faculty costs soar and market losses bite.
Policy Pulse: DOE's Accountability Reset
The Department of Education is proposing stricter reporting metrics and performance thresholds tied to federal funding. While accountability is important, many fear these metrics are too blunt for the nuanced challenges of small institutions. Our concern: the policies may disproportionately punish faith-based and rural universities. One proposal under consideration is the implementation of a maximum financial aid threshold—a cap on the amount of Title IV federal funding that students at a given institution may collectively receive. While this is intended to curb abuse and drive efficiency, it could devastate small institutions with high-need student populations. Many private colleges depend on tuition dollars underwritten by federal aid, and this ceiling may act as an enrollment throttle. For faith-based and rural schools already operating on tight margins, this could become the defining pressure point that forces closure. It's a classic case of policy designed for outliers that ends up punishing the rule.
Market Watch: The Quiet Collapse of Endowment Value
📉 The S&P 500’s volatility, compounded by global tariffs on tech and manufacturing, has seen many endowments lose 5–12% since January. For struggling schools, that’s enough to stall strategic plans, delay faculty hiring, or miss payroll. Most universities rely on a fixed percentage draw from their endowment—commonly around 4% to 5% annually—to fund operations such as scholarships, salaries, and building maintenance. When the value of the endowment takes a hit, so does that payout. For institutions already operating on a tight margin, a sharp drop in endowment value doesn’t just reduce flexibility—it cuts directly into their ability to function.
For schools that are heavily tuition-dependent but still lean on their endowment for stabilization, this kind of financial disruption can mark the beginning of the end. Without that supplemental support, everything from academic programming to campus upkeep becomes vulnerable. The phrase “market correction” starts to feel a lot more like “institutional collapse.”
Endowments aren’t magic vaults. They’re investment-driven. And right now, the market isn’t playing nice.
Pressure Points: What Happens When Public Universities Get Propped Up?
As public universities begin to feel the same enrollment pressure, it’s likely that state legislators—motivated by good intentions—will move to subsidize them more heavily. This might make sense politically and practically in the short term. But here’s the unintended consequence: private universities, which rely on tuition and donor revenue rather than direct state funding, will be left out in the cold.
When public schools are buffered and private schools are not, the result is an uneven playing field. Many faith-based and liberal arts institutions could be priced out of competition entirely. That’s not just bad for schools—it’s bad for students. Fewer options, less diversity in educational philosophy, and less individual attention are the likely outcomes. If the goal is educational equity, policymakers may be undermining it.
What’s Coming Next?
We're expanding our research portfolio:
- Rural Hospital Closures: How healthcare deserts mirror educational ones.
- Vanishing Villages: What population loss tells us about institutional viability.
- New Maps Incoming: Faith-based university survival rates by denomination, CCCU-specific rankings, and population-driven stress indices.
💬 Got ideas? Want to collaborate? Hit reply or email me at james_long@friends.edu.
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Until next time—keep your eye on the trends and your spreadsheets backed up.
— Jim