Areas for Future Research

Throughout our work, we found numerous areas for further research—data analyses that need to be conducted, literature that can be drawn upon, and areas for deeper investigation. To that end, we have compiled a non-exhaustive list of some of the most essential analyses we would like to see.

Analysis of Closure Risk. Regulators often struggle to accurately identify the institutions most at risk of closure. Deeper research could help to pinpoint which institutions bring the most risk to students and taxpayers, and inform regulators efforts.

• The federal government (and in particular, the Department of Education) could conduct a quantitative analysis of college closures to better understand the exact risk factors, incorporating internal indicators and knowledge of regulator actions.
• Deeper recommendations on financial responsibility and financial warning signs are needed to better indicate risk of collapse based on poor finances. Several organizations are already underway with this work; their efforts should be considered seriously to prevent a premature rewriting of the rules.¹
• Further analysis is needed to understand the riskiness of a college by the size of that institution. Some very large colleges seem unable to keep up with their growth, particularly when enrollment trends change. Other, very small schools are unable to meet the enrollment targets needed to sustain their institutions. Research could help to determine at what size private colleges should be subject to increased oversight, financial protection requirements, and even enrollment limits.

Analyses of Current Regulator Policies. Our research has brought to light inconsistencies across states and accrediting agencies in how they approach college closures. A deeper scan could help to identify the range of policies in play, establish best practices, and make improvements where needed.

• A scan of accreditor policies related to disclosures to students about college closures could help to determine how accreditors determine that students must be notified of possible or impending college closures, and how those notifications are made.
• States have a range of policies in place for transcripts and student records, disclosures, tuition refunds, and oversight. Continued research into the ways in which states approach these policies differently can lead to the development of best practices and an evidence base for states considering policy changes.

Analyses of Students’ Outcomes. We saw in the event of many precipitous college closures that student outcomes were often dragging or declining beforehand. That is an important indicator that regulators should not ignore, particularly given the potential for double harm done by a school that offers students little value and then also closes suddenly.

• The Education Department should analyze internal data on closed school loan discharges and other liabilities at closed schools to determine whether and when the current financial protection is adequate to cover those actual and potential liabilities.
• Researchers should study the outcomes of students involved in closures to determine who transferred; who dropped out; how they were able to repay their loans; and more. This could be accomplished with Education Department data and/or National Student Clearinghouse information.

Analysis of When a College Is Not Salvageable. Regulators often disagree about whether to take action if that action could mean shutting down a college or university. There is no consensus about when a college has hit the tipping point and is likely to close, versus when it is likely salvageable.

• This challenge drives a lot of problems in terms of the failure to take action. ITT Tech, for instance, presented a major problem for students, regulators, and law enforcement agencies for years. And yet states did effectively nothing; attorneys general made demands but failed to take action to kick ITT out of their states; the institution’s accreditor put the school on orders to show cause only years after the problems were widely known; and the Department finally took action only years later. Research into the trajectories of other closed and at-risk institutions could help us better understand when a school has reached its limits.

Analysis of Disclosure Effectiveness. Students face life-changing and financially significant decisions immediately after learning of a college closure. But those students are often left to fend for themselves, navigating complex financial aid and academic decisions and a mess of records and bureaucracy. Many of them may not even have been aware their institution was at risk of closure until the day its doors are locked.

• Better research on how to make disclosures personalized, effective, and salient for students could help to improve their decision-making along the way, from enrollment through closure and transfer to another institution.

Analysis of the Geographic Profile of Closed Institutions. Students are not necessarily equally affected by college closures. The geographic and economic profile of a region in which an institution closed may lead to varying degrees of impact. The barriers and hardships students face when they are forced to adjust to closure can be exacerbated by the infrastructure of their area.

• Analyzing how the geography of a region impacts procedures, such as the feasibility of transfer credits in the face of long commute distances, and student outcomes once an institution closes, may shed light on how to alleviate hardships. This could be done by documenting commuting zone regions and education deserts of closed or closing colleges to assess degrees of risk for students at these institutions.