The screws are tightening on America’s private colleges.

With an executive order looming to dismantle the Department of Education, it’s pretty clear that higher education is high on President Trump’s hit list. Already the administration’s January 27th federal funding freeze—which was put on hold by a court injunction in late February—as well as a Congressional push to tax wealthy college endowments, has institutions scrambling to map out their financial futures. Even without Trump, the nation’s bloated offering of nearly 6,000 colleges and universities was facing a dire demand and supply problem. According to demographers, the number of graduating high school students in the United States is about to drop precipitously and continue to decline for up to 15 years.

College leaders have had more than a decade to prepare for the so-called enrollment cliff, says Marjorie Hass, president of the Council of Independent Colleges and former president of Rhodes College in Memphis, Tenn.—but Trump’s full-on assault could be the black swan that finally sends struggling tuition-dependent schools to the graveyard. “The current and unexpected threats to colleges—such as radical cuts to federal funding of research and student aid—are more immediately likely to spur campus disasters than the more gradual and foreseeable demographic shifts,” warns Hass.

Which colleges will survive the political and demographic gauntlet? Each year, since 2013, Forbes has examined the balance sheet health and operating soundness of the nation’s private colleges with its College Financial Grades Ranking. To create the school grades, we used the latest available financial data from the National Center for Education Statistics, which covers the fiscal year ending in June 2023. In total, we graded 868 private, not-for-profit colleges that enroll at least 500 students. (For more on our methodology, click here). Ninety-four schools earned at least an A, up from 54 last year. Of those, 51 earned an A+, including perennial financial heavyweights like Stanford, Grinnell, Yale and Swarthmore College in Pennsylvania. But lesser known schools like liberal arts bastion St. John’s College in Annapolis Maryland, Davis & Elkins College nestled in the Appalachians of West Virginia and McPherson College in Kansas, known among classic car aficionados for its Automotive Restoration major, are also in excellent financial health.

That’s the good news. Unfortunately nearly half of the private colleges and universities in America are C students, at best, financially. These schools are likely to be tuition-dependent, squeaking by each year much like a household living paycheck to paycheck. One hundred and forty-eight schools earned a D, the lowest possible grade. These colleges, including Painseville, Ohio’s Lake Erie College, which has been struggling to cover its debt payments and Catholic-affiliated Marymount University in Virginia, are in dire financial shape with uncertain futures.

In January, the Trump administration attempted to freeze billions in federal spending, including grant funding from the National Institute of Health and the National Science Foundation—two significant sponsors of colleges’ research operations. Weeks later, the NIH announced it would cap money for facilities and administrative (F&A) costs at 15% of grant funding. A 15% cap would be a significant cut for most recipient schools. Johns Hopkins University, the largest university beneficiary of NIH funding, has a 63.75% F&A rate for federal government grants and contracts. The cuts could cost the elite private university $420 million per year. Columbia University’s rate is 64.5%, potentially costing it $313 million.

The largest research universities, including Johns Hopkins, have big multi-billion dollar endowments that could help mitigate the impact of federal funding declines, but smaller colleges don’t have this cushion. Clark Atlanta University in Georgia, graded B on the Forbes financial health ranking, Duquesne University in Pennsylvania, also with a B, and The New School in New York, which gets a C+, are all designated research universities according to the Carnegie Classification, but have endowments worth far less than $1 billion. Tiny Wiley University in Marshall Texas, rated C, was formed in 1873 by the Methodist Episcopal Church and the Freedman’s Aid Society to educate freed slaves. The HBCU, whose 1930’s era debate team was depicted in a 2007 movie directed by and starring Denzel Washington, counts on federal government funding for 32% of its $20 million in annual core revenues.

At most private colleges, tuition, room and board makes up the lion’s share of operating revenue, but “multiple revenue streams best prepare institutions for shocks and crises,” Hass says. Endowments are likely to become even more important as the federal government gets stingier with its support for higher education.

That is great news for colleges like Princeton, MIT and Amherst, whose endowments on a per student basis amount to more than $2 million. But even these fat cat colleges aren’t safe. In January, Troy Nehls, a Republican Congressman from Texas introduced the Endowment Tax Fairness Act, which would levy a 21% tax on private, not-for-profit college endowment investment earnings (they are currently taxed at 1.4%). Revenue from the proposed tax would be used to pay down the national debt. Assuming a 7.5% average return, the tax would raise about $69.8 billion over ten years, according to an analysis from the Tax Foundation. Colleges that enroll at least 500 students and have an endowment of at least $500,000 per student would be subject to the tax. Thirty-eight schools on the Forbes 2025 Financial Grades list meet this criteria, including Harvard, Stanford and Yale, as well as prominent liberal arts schools like Carleton College in Minnesota and Pomona College in California. Nehl’s alma mater, evangelical Christian Liberty University, with its 49,000 undergraduates and $2.2 billion endowment, would be exempt.

In the background of the political chaos is a steady drumbeat of enrollment declines, which could spell doom for a number of small private schools. In 2024, at least 28 colleges closed their doors, up from 15 colleges in 2023. A number of schools—including Northland College in Wisconsin which is rated D for financial health, Cornish College of the Arts in Washington and Pierce College in Pennsylvania—have already announced plans to close or merge with another institution in 2025. Dozens of others are on the brink of financial collapse. A 2024 study from the Philadelphia Federal Reserve predicts that a 15%, one-time “worst-case scenario” enrollment decline could cause as many as 80 additional schools to close in the span of a year. If nationwide enrollment declines more gradually, by 15% over five years, the Philadelphia Fed expects to see nearly 5 additional closures per year.

Many colleges that rely more heavily on tuition dollars to keep their doors open—and have benefited from Covid stimulus funding—are now at greater risk of closure. Of the 868 colleges that Forbes graded, tuition makes up at least half of core revenues at 612 schools. “They might have some endowment, but not enough to cover some of the debt with the shrinking populations that they have inside the school,” says Candi Clouse, vice president of customer success at the economic software and analysis company Implan. That said, “it’s never just one thing,” Clouse says. “We’ve seen the decline in birth rates, but the rising cost of education is huge in this.”

Clouse worries for her alma mater, Wittenberg University in Springfield, Ohio, which Forbes grades C- for financial health. The university, which enrolls about 1,200 students, is “just slashing departments left and right in order to meet the budget numbers for the university,” she says. Last fall, Wittenberg eliminated 24 faculty and 45 staff positions, and cut its music, music education, German, Spanish and East Asian studies majors and minors. At the time, president Michael Frandsen said the cuts were part of a plan to stem operating losses by fiscal 2027. In fiscal 2023, the most recent year for which federal data is available, Wittenberg’s core operating margin was -30%. Its endowment only amounts to $109 million.

“And on top of that,” says an exasperated Clouse, “Springfield was hit hard in the media after [Donald Trump] and his vice president were making comments about [people] eating cats and dogs here.”

For Forbes 2025 College Financial Grades methodology, click here.