Credit rating agency Moody's says one-fifth of the nation's private colleges are in financial distress. Despite crazy high tuitions, they're suffering from competition from the publicly funded schools.
Heritage Foundation education expert Mary Clare-Amselem says the private schools are being forced to offer expensive perks, like athletic facilities and overly fancy dorms.
"They're saying 'okay, you're going to get this degree anywhere you go, so we're gonna attract students by offering a lot of this, fancy, quite frankly, fluff.'"
Cato's Neal McCluskey says the answer is to end government subsidies for all universities.
"What I think we would see is probably fewer people going to colleges but much more efficient ways that people would get the skills and knowledge they need."
McCluskey says the free market should determine education costs.
"If we eliminated both the subsidies for public colleges and students you would see a good side from the vantage point of a small, private college in that they would no longer have to compete against artificially low-priced public colleges and universities."
Failing that, many small, private schools are facing cuts to several majors and minors -- and even closure.