Another college in northeast Ohio is facing serious financial difficulties.
Lake Erie College, in Painesville, about 30 miles northeast of Cleveland, entered into a forbearance agreement with lenders after it fell short of certain commitments it made when it sold municipal bonds to finance campus facilities projects, Bloomberg reported (subscription required).
Bloomberg reported that the small independent college didn’t achieve a ratio designed to show that it had enough money available to pay its debts, and it also had just seven days’ cash on hand instead of the 25 required by the covenants in the bond deal.
Forbearance is considered a default event, Bloomberg reported.
Lakeland Community College and Baldwin-Wallace University, also near Cleveland, have reported significant deficits and made meaningful budget cuts in recent months.