This book analyzes the latest data and economic models to explore whether an unpredictable economy, changes in student preference, tuition that outpaced inflation, and new forms of competition will plunge small colleges into chronic financial distress. It then suggests ways small colleges can position themselves to avoid economic disaster by understanding the markets in which they operate. The book details the financial essentials of small colleges in these chapters: (1) "Small Colleges on the Brink of Financial Distress"; (2) "Historical Influence on the Economic Development of Independent Colleges"; (3) Challenges Facing Small Colleges"; (4) "Economics of Small Colleges"; (5) "Financial Structure of Small Colleges"; (6) "Identifying Financial Distress in Small Colleges"; (7)"Why Small Colleges Fail: Four Cautionary Tales"; (8) "Financial State of Small Colleges"; (9) "Planning and Leadership: Tools for Pulling Back from the Brink"; (10) "Financial and Market Diagnostics"; (11) "Financial Strategy"; (12) "Small College Turnarounds: How They Did It"; and (13) "What Are the Prospects for Small Colleges?" Seven appendixes present trend tables and supplemental information about college finances. (Contains 35 tables and 177 references.) (SLD)