The economic challenges of operating colleges, secondary, and primary schools can lead to unpleasant consequences for students, staff, and even alumni.
Public school districts, in extreme situations, will close a campus and lease or sell the property when it is no longer needed.
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When it comes to private schools, financial distress can result in school closures, the sale of campuses, and, in some cases, bankruptcy filings.
Related: Popular restaurant chain franchisee files Chapter 11 bankruptcy
A major public university recently revealed that it will shut down one-third of its satellite campuses as a result of growing financial challenges and declining enrollment.
Iconic Penn State University in State College, Pa., revealed in May 2025 that it would close seven of its 20 campuses, which are located in DuBois, Fayette, Mont Alto, New Kensington, Shenango, Wilkes-Barre, and York, Pa., after two more academic years, University Business reported.
Students who have not graduated by the 2026-27 academic year will be counseled on degree completion options and transfers to other Penn State campuses.
Two private universities, St. Andrews University in North Carolina and Limestone University in South Carolina, announced in April that they will close at the end of the spring 2025 semester. Both blamed financial difficulties for their demise.
College and universities merge
Several college and university consolidations and mergers were also revealed in March and April by institutions looking for an answer to declining enrollment. The University System of Georgia said in April that it would consolidate East Georgia State University within Georgia Southern University.
Villanova University in Pennsylvania announced in March that it will merge with Rosemont College, which will eventually become Villanova University Rosemont College.
Cornish College of Arts in Washington in March, revealed it will change its name after a sale to Seattle University and become Cornish College of Arts at Seattle University.
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Higher Ground Education files for bankruptcy protectionÂ
Huge educational institute chain owner Higher Ground Education Inc., formerly the world’s largest Montessori school operator, filed for Chapter 11 bankruptcy with a restructuring support agreement that will hand all of its equity to a prepetition secured lender.
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The Houston-based debtor listed $100 million to $500 million in assets and liabilities, which includes over $127 million in funded secured debt and $144 million in unsecured funded debt.
Higher Ground Education’s largest unsecured creditors include over $13.2 million owed to Guidepost Financial Partner LLC, over $1.49 million owed to 775 Columbus LLC, over $939,000 owed to 214 E. Hallandale Beach LLC, and over $834,000 owed to Strike Inc.
Under a restructuring support agreement between the debtor, equity holders, and lenders, investor 2HR Learning Inc. will provide debtor-in-possession financing consisting of $8 million in new money and a $2 million rollup of a prepetition bridge loan in exchange for all the debtor’s equity.
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Founded in 2016 in Southern California as a Montessori school network, the debtor began building its system with 12 schools in 2018, expanded globally to 101 by 2022, and became the world’s largest Montessori school owner with over 150 schools by the fall of 2024.
The debtor operated its Montessori schools under several brands, including Guidepost Montessori, Beacon Elementary, Altitude Learning, TinyCare, and NeighborSchools.Â
The debtor was never able to maintain and generate sufficient liquidity to fund operations since it opened, according to a declaration by company President Jonathan McCarthy.
After several prepetition foreclosures and negotiated sales, the debtor’s ownership of the Montessori schools plummeted to seven facilities on the petition date.Â
Since 2020, the company has raised $335 million in funding, but the business has never generated positive cash flows from operations. The company reported a $55 million loss in 2024, a $103 million loss in 2023, and a loss of over $106 million in 2022.
Higher Ground Education had lost $24.8 million through April in 2025.
Related: Popular smoothie chain franchisee files for Chapter 11 bankruptcy
