In 2023 alone, at least 30 colleges closed their campuses, including both nonprofit and for-profit institutions.
In 2023 alone, at least 30 colleges closed their campuses, including both nonprofit and for-profit institutions.
The landscape of higher education in the United States is undergoing a significant transformation, particularly in the wake of the COVID-19 pandemic. Recent trends and analyses suggest that colleges and universities face a challenging future, marked by declining enrollments, financial strains, and the necessity for substantial operational changes.
Projections
Post-pandemic, college enrollment appears to be stabilizing, but long-term projections are concerning. The next 15 years could see a marked decrease in the number of tuition-paying students, which would financially strain many institutions. In response, colleges may need to merge with others or undergo major operational changes to remain viable.
In 2023 alone, at least 30 colleges closed their campuses, including both nonprofit and for-profit institutions. This trend is not new but has been exacerbated in recent years. Prior to 2022, the highest number of non-profit college closures in a single year was 13, a figure that has been significantly surpassed recently. The closures predominantly affect smaller, regional private colleges, struggling with enrollment rebounds post-pandemic.
Rachel Burns, a senior policy analyst at the State Higher Education Executive Officers Association, points out that these closures are not due to corruption or financial misappropriation but are a result of failing to recover lost enrollment.
“It’s not corruption, it’s not financial misappropriation of funds, it’s just that they can’t rebound enrollment. It’s not corruption, it’s not financial misappropriation of funds, it’s just that they can’t rebound enrollment,” said Burns.
Challenges
Current data from the National Student Clearinghouse indicates a slight increase in undergraduate enrollment, the first since the pandemic began. However, the decline in birth rates forewarns of fewer high school graduates after 2025, posing further challenges to college enrollments.
David Attis of the education consulting company EAB highlights a bleak future, predicting significant enrollment declines for hundreds of colleges in the coming years. Factors contributing to this trend include declining birth rates, changes in student preferences, and a shift towards larger, more selective institutions. EAB’s analysis forecasts that by 2040, a substantial number of colleges will experience enrollment declines of up to 50 percent.
“Imagine if you lose half your students – that is a threat to your continued existence. Imagine if you lose half your students – that is a threat to your continued existence,” Attis said.
Attis stresses that these projections, while not guarantees of closures, indicate a need for colleges to radically rethink their strategies. He suggests that institutions face the difficult decision to either merge or close down. Proactive mergers are preferable, as colleges on the brink of closure are less attractive merger candidates.
He said, “If you wait until you’re on the verge of closure, you’re not a particularly attractive partner. But if you’re not on the verge of closure, then you’re not as motivated to find that partner.”
“Whether they’ve pursued them or not, they’ve either made a call or gotten a call. They’re thinking about it in a way I hadn’t heard in the past,” he said.
The higher education sector is also grappling with broader challenges, including economic pressures, demographic shifts, and changes in educational preferences. The traditional model of four-year colleges, especially smaller and less known ones, is increasingly questioned as students evaluate the cost versus potential returns.
The pandemic has accelerated the acceptance of online education and alternative credentialing paths, challenging traditional residential college experiences. Financially, many colleges are heavily dependent on tuition revenue, making them vulnerable to enrollment fluctuations. This situation is particularly dire for smaller colleges with limited endowments or alternative revenue sources.
Response
In response, colleges are adopting various strategies. Some are focusing on niche programs or unique educational experiences, while others are cutting costs and staff, or eliminating less popular programs. Collaborative agreements and formal mergers with other institutions are also being explored.
The future of higher education is likely to see continued evolution, with a shift towards more flexible, adaptive, and innovative models. This could include shorter degree programs, vocational training, and lifelong learning opportunities, moving away from the traditional four-year college experience.
The consequences of these changes extend beyond the institutions themselves, impacting local communities and the broader economy. Colleges and universities often serve as major employers and cultural hubs, meaning their struggles can have significant ripple effects. The availability of higher education opportunities for future generations may also be affected.
As the higher education sector navigates this period of change and uncertainty, institutions must find a balance between financial imperatives and meeting the educational needs of a new generation of students. The next decade is poised to witness a reshaping of the higher education landscape, carrying profound implications for students, communities, and society at large.
The future of higher education in the United States presents a complex and challenging picture. While some stabilization has occurred post-pandemic, long-term trends suggest significant changes are on the horizon. Institutions must adapt to survive and thrive amidst declining enrollments, financial pressures, and evolving educational models. The choices made in the coming years will shape not only the future of these colleges and universities but also the broader educational, economic, and social landscape.
