Washington, D.C. partner Jonathan Tarnow was quoted in The Deal in an article titled, “Nonprofit colleges take up a new subject: Default.” The article discussed the financial challenges that an increasing number of nonprofit colleges are facing, in particular smaller colleges that have an exclusive focus on liberal arts, a single-sex student body, outdated programs and facilities, or those in rural locations.

As noted by Jonathan, college enrollments are generally flat or decreasing while many colleges have incurred sizable debt over the last decade for new facilities and student amenities. “At the moment, everyone is competing for a smaller number of college students,” he said.

“As with any budget, if your revenue stream isn’t what you predicted to service your debt obligations and you can’t lower expenses, you could end up having a liquidity problem,” said Jonathan.

Read Jonathan’s comments here.