Dive Brief:
- Northwestern College, in Illinois, abruptly closed July 6, according to a notice on the for-profit institution’s website.
- The 122-year-old college said it made the decision after “careful analysis of its current and projected fiscal position.”
- Northwestern listed potential transfer options for students in its degree programs, but the college did not announce formal teach-out agreements. Its accreditor, the Higher Learning Commission, said Monday it has not yet approved any agreements.
Dive Insight:
HLC placed Northwestern on probation in June 2022 over compliance shortfalls with the accreditor’s resources and student assessment standards.
This June, HLC removed the college from probation but put the it on notice. In a July 2 letter, the accrediting body indicated that Northwestern risked falling out of compliance with its standards on resources and planning requirements.
HLC based the sanction on findings that Northwestern’s financial monitoring and fiscal allocation needed improvement, “as evidenced by the numerous findings from its most recent audit,” the accreditor said.
Northwestern also carried a “large amount” of debt in short-term notes, HLC noted.
“While the Institution is confident that these notes will be extended beyond the payoff dates, if any noteholders are unwilling to extend the terms there could be sufficient adverse impact to affect its long-term financial health,” the accreditor said.
Along with those concerns, HLC flagged that Northwestern was persistently on the U.S. Department of Education’s Heightened Cash Monitoring 2 list, which the accreditor said was “putting a strain” on the college’s finances. HCM2 status requires colleges to distribute federal financial aid from their own coffers before seeking reimbursement from the Education Department.
The accreditor also noted that the institution was having trouble staffing and training workers for dealing with financial aid regulations.
Although those issues could have led to a loss of accreditation, they are moot with Northwestern’s move to shut down.
The college was founded in 1902 to provide career education for students in the Chicago area (it has no affiliation with Northwestern University in Evanston). Up until its closure, the college offered certificates, as well as two-year and bachelor’s degrees in a handful of mostly medical fields, including nursing, radiology and health information technology.
Northwestern had 514 students in fall 2022, down more than 20% from 2017, according to federal data.
The college is one of several for-profit and career colleges to announce closures in recent months, including North Coast College in Ohio, Mountain State College in West Virginia, Triangle Tech in Pennsylvania and the nonprofit Pittsburgh Technical College.