I believe every college maintains a backup fund to make sure that the college can survive at least 5-10 years if all else fails.
In such a scenario, the school would prioritize using the money to make sure that current students can graduate and that their degree is worth something for at least a couple years.
EDIT: That was poorly worded. I meant to say that the fund is meant as a buffer to help the school avoid shutting down, so that they have time to get their act together. But it also helps guarantee that their degrees will be worth something for at least a few years, so that students feel safe continuing at the school and so recent graduates are not screwed over by something that wasn't their fault. I'm not sure, but this might even be an accreditation requirement.
In such a scenario, the school would prioritize using the money to make sure that current students can graduate and that their degree is worth something for at least a couple years.
EDIT: That was poorly worded. I meant to say that the fund is meant as a buffer to help the school avoid shutting down, so that they have time to get their act together. But it also helps guarantee that their degrees will be worth something for at least a few years, so that students feel safe continuing at the school and so recent graduates are not screwed over by something that wasn't their fault. I'm not sure, but this might even be an accreditation requirement.