I don’t understand how what once was rare in foreign tuition, then was a cash cow, and is now limited (but not eliminated) is now responsible for the total collapse of some schools.

They overextended themselves during the years the money was coming in, most likely, and now can’t afford the remaining payments on new buildings or equipment or the current staff salaries or whatever without the extra financial support. (There’s also the possibility of outright embezzlement having taken place, as at Laurentian U, which ended up axing a couple of programs.) Wikipedia suggests that Algonquin’s been building or renovating a fair amount of stuff on their main campus in Ottawa over the past fifteen years. If they took out loans to finance some of it, it would make sense that they’re short on cash now.