Lake Erie College is currently grappling with substantial financial challenges, with reports indicating that the institution has entered a forbearance agreement with lenders. The college, situated in Painesville, approximately 30 miles northeast of Cleveland, failed to meet specific commitments made during the sale of municipal bonds for funding campus facilities projects. According to Bloomberg, the college fell short of the required financial ratio and had only seven days’ cash on hand, contrary to the 25 days mandated by the bond deal covenants.
Bloomberg notes that entering forbearance is considered a default event for the small independent college. This development follows similar financial struggles faced by other institutions in northeast Ohio, such as Lakeland Community College and Baldwin-Wallace University, both of which have reported significant deficits and implemented substantial budget cuts in recent months.
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