In 2012, global consulting firm Bain and Company and private-equity firm Sterling Partners analyzed 1,700 public and private not-for-profit colleges, describing one-third of them as being on an “unsustainable financial path.” Last year, Forbes examined the financials of 925 private not-for-profit colleges. After weighing factors like tuition dependence, revenue streams, endowments, instruction expenses, and asset-to-debt ratios, the report’s authors gave roughly 60 percent of the surveyed colleges a “C” or “D” grade.

Higher education leaders are certainly aware of those gloomy forecasts and the financial problems their respective institutions face. A 2013 Inside Higher Ed/Gallup survey of campus chief financial officers revealed that only 27 percent of the CFOs had “strong confidence” in their schools’ short-term business models. The CFOs agreed that while state flagships and elite schools are more immune to financial hardships, private colleges are especially vulnerable in this rough economic period.

So, do private colleges face an existential threat? Some experts and commentators think so, and a number of case studies corroborate their concerns. Dealing with major enrollment declines, some private colleges have cut faculty, downsized and eliminated programs, and partnered with other regional schools to avoid financial ruin. Other colleges have either closed altogether or are teetering on the edge of bankruptcy.

In the midst of such chaos, one thing has become clear: adapting to new economic circumstances and redesigning a college’s mission are not easy tasks. Just ask Raleigh, North Carolina-based William Peace University (formerly Peace College).

Several years ago, after predicting enrollment declines, Peace College began making significant changes which have been met by heavy condemnation from students, faculty, alumni, and donors. At the time an all-women’s college, Peace began accepting men into its night program and now accepts men on a full-time basis. In 2010, a new president ushered in an era of faculty and program cuts. In 2011, Peace College changed its name. More recently, the university chose to invest $21 million, or two-thirds of its endowment, in a nearby shopping center. It also delayed publicly disclosing its list of trustees–trustees who approved of the investment.

In his recent Pope Center feature, Harry Painter describes how the Peace community has responded to those developments. “The school acted aggressively to deal with declining enrollment, but in doing so, it antagonized the devoted community of ‘Peace girls,’ alumnae who, it seems, are dedicated to forever keeping Peace the special place it was when they left it.” Painter points out that, despite some apparent victories for the university, such as increasing its enrollment from about 600 to 800 and a promise to increase the number of majors offered from 14 to 18, backlash has remained intense.

Some students worry that the Peace administration will retaliate in the event that they speak out against the campus policies. Donors are upset about what they view as the secrecy behind the shopping center investment. Others are concerned that the $30,000 annual price tag for residential students is not justified in the face of faculty cuts and an increasing reliance on adjunct professors. And when the university opted to eliminate its music performance major, some professors actually sued the school and eventually settled out of court.

As the Peace case makes clear, it’s easy for colleges to be aware of and understand their financial difficulties. Getting an entire community to act swiftly and smartly without ruffling the feathers of campus stakeholders, however, is where the real challenge lies.