Experts predicted dozens of colleges would close in 2023 – and they were right – The Hechinger Report
Though college enrollment seems to be stabilizing after the pandemic disruptions, predictions for the next 15 years are grim. Colleges will be hurt financially by fewer tuition-paying students, and many will have to merge with other institutions or make significant changes to the way they operate if they want to keep their doors open.
At least 30 colleges closed their only or final campus in the first 10 months of 2023, including 14 nonprofit colleges and 16 for-profit colleges, according to an analysis of federal data by the State Higher Education Executive Officers Association, or SHEEO. Among nonprofits, this came on the heels of 2022, when 23 of them closed, along with 25 for-profit institutions. Before 2022, the greatest number of nonprofit colleges that closed in a single year was 13.
Over the past two decades, far more for-profit colleges closed each year than nonprofits. An average of nine nonprofit colleges closed each year, compared to an average of 47 for-profit colleges.
This time last year, experts predicted we’d see another wave of college closures, mostly institutions that were struggling before the pandemic and were kept afloat by Covid-era funding. Since then, keeping their doors open has become unrealistic for these colleges, many of which are regional private colleges.
For many, the situation has been made worse by the enrollment declines during the pandemic.
It’s not corruption, it’s not financial misappropriation of funds, it’s just that they can’t rebound enrollment, said Rachel Burns, a senior policy analyst at SHEEO.
Data from the National Student Clearinghouse shows that undergraduate enrollment has stabilized and even slightly increased for the first time since the pandemic, but a continuing decline in birth rates means that fewer high school seniors will be graduating after 2025, so these colleges will face even greater enrollment challenges in the years to come.
Hundreds of colleges are expected to see significant enrollment declines in the coming years, according to David Attis, managing director of research at the education consulting company EAB. Among the reasons, he said, are declining birthrates, smaller shares of students choosing college, and college-going students veering toward larger and more selective institutions.
By 2030, 449 colleges are expected to see a 25 percent decline in enrollment and 182 colleges are expected to see a 50 percent decline, according to an EAB analysis of federal enrollment data. By 2035, those numbers are expected to rise to 534 colleges expecting a 25 percent decline and 227 colleges expecting a 50 percent decline; by 2040, a total of 566 colleges are expected to see a 25 percent decline and 247 are expected to see a 50 percent decline, according to EAB’s analysis.
These are predictions, of course, and they certainly don’t ensure that all those colleges will close. But with these drops in enrollment expected to continue, colleges need to plan now and make significant changes in order to survive, Attis said.
Imagine if you lose half your students – that is a threat to your continued existence, Attis said. You’ll have to make some pretty dramatic changes. It’s not just a ‘We’ll cut a few academic programs,’ or ‘We’ll trim our administrative staff a little bit.’ That requires a real reorientation of your whole strategy.
Many colleges face the decision to merge with another institution or close down entirely, Attis said. And if they wait too long to find a college to merge with, they really won’t have a choice.
If you wait until you’re on the verge of closure, you’re not a particularly attractive partner, Attis said. But if you’re not on the verge of closure, then you’re not as motivated to find that partner.
Attis said that he’s been surprised to hear from several leaders of regional colleges – both private and public – that they are in talks about mergers.
Whether they’ve pursued them or not, they’ve either made a call or gotten a call, Attis said. They’re thinking about it in a way I hadn’t heard in the past.
