A report by the Marshall Islands college says it must cut costs by freezing hiring and salary increases, and halting expansion of new programmes that cannot pay for themselves.
The internal financial review also says this may not be enough to put the college onto a sustainable financial path.
Most of the College's funding comes from tuition fees paid by US scholarships under the Pell Grant programme, which totaled 5.1 million US dollars in 2012, and an annual Marshall Islands government appropriation of 3 million dollars.
A challenge for the college are the overheads - salaries, housing, power bills that average over 500,000 dollars each month.
The report lists several recommendations, including the possibility of the national government increasing its annual support to the college to 3.5 million US dollars.