I edited the post, it was poorly worded. My intention was to say that colleges are at least somewhat protected from just "going out of business" since that would potentially destroy the lives of thousands of recent graduates.
As far as why they would do that, my guess is that is probably a requirement to get accredited.
"The institution’s financial resources are sufficient to sustain the quality of its educational
program and to support institutional improvement now and in the foreseeable future. The
institution demonstrates, through verifiable internal and external evidence, its financial
capacity to graduate its entering class. The institution administers its financial resources with
integrity." -- New England Association of Schools and Colleges, Standards for Accreditation [1], Page 22
I'm sure the other regional accreditation agencies have similar requirements.
