Columbia College celebrated 175 years of operation in January. Beneath the celebration of the college’s legacy are concerns from higher education finance experts surrounding a decade-long trend of the college’s declining financial health.
Years of tax filings raised several red flags. Rapid endowment spending, declining revenue and shrinking annual contributions and grants are indicators to experts of the college’s financial challenges.
Columbia College officials disagree, saying some of the spending has been an investment in the school’s future. They also note that this is a tough financial time for many higher education institutions.
According to the private institution’s annual 990 forms, which are tax filings for nonprofit organizations, its revenue is steeply declining. In 2014, the college’s total revenue was about $107 million, and in 2024, it sat at $74 million.
Robert Kelchen, head of the Department of Educational Leadership and Policy Studies at the University of Tennessee, Knoxville, said a college’s total revenue and expenditures should be harmonious. He said colleges should strive to run a balanced budget.
In the most recent three fiscal years of the college’s IRS filings, its expenditures have exceeded revenue by $14 million to $19 million each year.
The college has gained regional attention for its financial situation. The Scholarship Foundation of St. Louis, an organization providing access to postsecondary education for low-income students, put the college on a watch list in 2024.
The foundation compiles a list of colleges, attended by the scholarship foundation’s students, that are financially struggling, alerting students to “exercise caution” if they plan to attend any of the named schools. Colleges that are of special concern are in red text on the watch list.
While Columbia College wasn’t recognized as a college of special concern in 2024, in 2026, it made the cut. There are 27 schools on the national watch list, 15 of which are in Missouri. Thirteen of the schools on the list are shaded red.
The foundation’s Executive Director Faith Sandler said factors like a college’s consistent loss of money, total expenses exceeding total revenue, declining enrollment and endowment losses, in the case of a private institution, qualify an institution to make the watch list in red. Kelchen was the lead researcher who analyzed institutions and their financial health for the scholarship foundation’s 2026 watch list.
An ‘infusion’ of federal pandemic relief cash
Columbia College’s total contributions and grants spiked during the COVID-19 pandemic due to its pandemic relief fund, college spokesperson Sam Fleury said. The fund brought the college’s total contributions and grants to a high of $17 million in fiscal year 2022, which ended that June. The amount dipped to about $1.7 million in fiscal year 2024.
“COVID-19 relief funds really temporarily changed the financial condition of some colleges that were struggling,” Sandler said.
When asked about how the university is adjusting to large drops in annual contributions and grants, Fleury echoed Sandler, attributing this change to the loss of the COVID-19 pandemic relief fund.
Fleury said $15.2 million of the college’s annual contributions and grants in fiscal year 2022 are from the federal government’s pandemic relief efforts for education institutions and student aid. Columbia College received $10.2 million to be distributed as financial aid for students during the pandemic and $5 million in funds for institutional support.
Sandler said the relief funds for colleges were often a temporary “infusion” of financial support.
Michael Nietzel, president emeritus of Missouri State University and a higher education expert, said lingering financial issues just a couple of years after the COVID-19 pandemic have been a “double whammy” that higher education institutions have had to contend with financially.
“Columbia (College) has had to contend with it just like everybody else, with fewer resources in reserve to help cushion the blow,” Nietzel said. “They didn’t have as deep of pockets as other places.”
Endowment draws
The college’s heightening annual withdrawals from its endowment since 2021 raise concern for Gary Stocker, founder of College Viability, a firm that researches the financial health of colleges.
Stocker said a standard endowment draw is 4% to 5%. In fiscal year 2024, he said Columbia College drew 16% of its endowment. Stocker said the reason for the existence of college endowments is to ensure a long and sustainable lifespan for an institution.
“Colleges in this day and age use their endowments as a piggy bank,” Stocker said.
Fleury said the college had been regularly pulling from its endowment, but in recent fiscal years, the institution has had to take additional funds out.
Chief Financial Officer of Columbia College Allen Schelp said 83% of the college’s endowment is made up of unrestricted funds. An additional 10% of its endowment is restricted, where endowment fund donors create guidelines for how the money is allocated across the college.
Recent endowment funds were used for developments like the creation of 27 new programs, the development of additional online classes and campus renovations, said Sandra Hamar, Columbia College provost and senior vice president of academic affairs.
Hamar said the endowment draws are a “conscious decision” for the college.
“We put $2.2 million in investment into our campus and our student areas this summer,” she said. “That’s a choice. We continually, at Columbia College, reinvest in ourselves, therefore we can invest in our students.”
Despite financial experts’ concerns about the college’s finances, Hamar said the college’s finances are strong.
“We’ve been around 175 years, and we will be around another 175 years,” Hamar said.
Schelp agreed. He said the college is in a “strong financial position now and going into the future.”
“Sometimes other institutions our size are envious of our financial position because we do have the financial resources,” Schelp said.
He also pointed to the college’s lack of debt as an area of success.
“When we build buildings on this campus, we don’t borrow money to do it,” Schelp said. “We use our own funds.”
In 2023, the college received a 10-year reaccreditation from the Higher Learning Commission. Columbia College was also deemed an institution that is “financially responsible without further oversight” as part of a composite financial responsibility score from Federal Student Aid, an office of the U.S. Department of Education that handles student financial aid nationwide.
According to the office, Columbia College has a 2.2 composite score, indicating financial responsibility. The score, on a scale of -1 to 3, determines an institution’s financial responsibility to ensure it can support students who rely on the Free Application for Federal Student Aid, FAFSA.
“The composite score is a lagging indicator for college health,” Stocker wrote in an email. He said a college can have “a strong composite number and still be in financial distress.”
Fleury said the college also received a healthy financial score from the Council of Independent Colleges’ Financial Indicators Tool, an annual financial benchmarking report.
A ‘tough’ higher education ecosystem
Kelchen said if the college’s revenue doesn’t catch up to its increase in annual expenditures, the college could “shutter its doors” in the next 10 years. Financial experts say Columbia College’s financial issues are part of a statewide reality: Missouri’s tough higher education ecosystem.
“Missouri is a very competitive state when it comes to higher education,” Nietzel said. “It’s got some very strong private institutions. It has some excellent public institutions, and frankly, it has a lot of them.”
Stocker agreed. He called Columbia College’s finances a “local symptom of a national disease.” He said this higher education finance “disease” for the college is due to a saturation of colleges in Missouri combined with the lack of students willing to pay the cost of education.
Kelchen said the addition of online programs, evening classes and graduate programs are common ways that higher education institutions may choose to bounce back from financial deficits.
Columbia College has a long history of online programming. Fleury said out of the college’s roughly 8,000 students in 2025, 90% of its student population took their classes online. This fall, Columbia College launched six new graduate degree programs.
Kelchen said the challenge with deploying this tactic to increase profit is that “so is everyone else.”
He added though the college is struggling financially, it “has a runway” to recover from its financial turmoil.
“The challenge is, with the way they’re losing money right now, that runway is getting shorter and shorter,” Kelchen said.
