It's also revenue diversification plus enrollment declines

While enrollment may be declining, institutions are also getting less revenue per student or Net Tuition Revenue per student. Seems crazy with what you see for tuition rates, but its true.

I think we've talked about this before, there's big difference in Net Cost per student and Net Revenue per student. While tuition rates do go up, the average discount rate is climbing at a higher % per year. At roughly 2-3% per year, the average discount rate has climbed from about 40% a dozen years ago to almost 56% today. That's just not sustainable as eventually that rate gets to 100%.

For the highly endowed schools, they can fund financial aid through endowed and gift fund. Schools without that luxury must simply provide aid by lowering the cost. They will have some fancy name for the scholarship, but its essentially discounting the sticker price.

An example of this would be:

Take a highly endowed Ivy institution. Because they can fully fund need, mainly through endowed aid, the Net Tuition Cost per student may be like $9k...but the Net Tuition Revenue for that same student will be $65k. That same student for a school without a trove of endowed aid may have a Net Tuition Cost of $20k, but the school will only recognize Net Tuition Revenue of $25k. The difference from the $25k to sticker (say sticker of $60k) is just lost revenue.

The privates that will survive this wave are those with high endowments that can fully fund need, those with another source of revenue such as a health system, or those with high demand graduate degrees that can command a high Net Tuition Revenue without much or any discounting.

I fear the wave of troubled schools is still at its infancy state.