Dowling College on New York’s South Shore to Close After Defaultby
Enrollment at 60-year-old college plummetted since 2009
Dowling has about $50 million of municipal bond debt
Dowling College, a small private college on Long Island’s south shore, is shutting its doors at the end of the week after 60 years as enrollment shrank by more than half in seven years and tuition revenue plummeted.
Dowling, with about 2,000 students, defaulted on about $50 million of municipal bonds secured by a mortgage on its Oakdale, New York, campus last year. Bondholders agreed to give the school until June 30, 2016, to sort out its finances without going after it for the money they’re owed. Dowling bonds maturing in 2021 traded at 96 cents on the dollar May 31.
Dowling was founded in 1955 and named for its benefactor Robert W. Dowling, a real estate developer. The college, located on the waterfront William K. Vanderbilt estate, formally known as Idle Hour, valued its land, buildings, equipment and library books at $56.2 million as of June 30, 2014.
Dowling’s announcement underscores the financial pressures facing small regional universities, both public and private said Jessica Matsumori, an analyst with S&P Global Ratings. Soaring tuition and student debt, competition from online programs and poor job prospects for graduates are shrinking schools’ applicant pools.
“While such defaults and closures are still relatively rare, we do expect to see an increase in school closures in the next few years- particularly of for-profit, very small, or unaccredited institutions,” she said in an e-mail.
The college’s president, Albert Inserra, announced the decision in a statement Tuesday, the Associated Press reported. Inserra couldn’t immediately be reached to comment.