Many colleges and universities that took on debt to expand in previous years are struggling, opening an opportunity for turnaround professionals and lenders to get creative with workouts in the education space. Many schools borrowed to expand before demographic shifts forced a decline in enrollment rates. As the loans come due, many schools lack the funds to pay their debts.

"I don't think [schools] are going to be able to do nothing," says Joe D'Angelo, a partner at New York restructuring firm Carl Marks. "They took on debt to build facilities, thinking their endowments would cover it," says D'Angelo. "Schools are not supposed to have debt."

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