Facts about College and University Closings and Mergers

          

According to education researchers and writers, James Martin and James E. Samuels, colleges and universities are merging and closing at rates higher than at any time in the past fifty years and according  to studies from Vanderbilt University and Higher Education Publications Inc., the number of private four-year colleges that have closed or were acquired, doubled from approximately five a year before 2008 to ten in the four years through 2011 and among all colleges, 37 schools merged in the three years through 2013.2016, 33 colleges and universities closed and one school merged. The number in 2017 was 31 school closings and six mergers. The figures in 2018 were 35 closings, ten mergers and six acquired. Over 90 percent were private institutions

In 2018 the abrupt closings of Mount Ida College and Newbury College prompted the Massachusetts Board of Education to consider requiring colleges to pass a financial “stress test,” an attempt to prevent sudden closures.

The National Student  education student enrollment decline of 1.7 percent in fall 2018 from the prior year. According to Moody’s Investors Service, during this fiscal year public and private universities in the United States are expected to experience the slowest net tuition revenue growth in more than a decade. Moody’s continues to remain negative on higher education forecasts.

There are several reasons for the increase in college closings and mergers. The number of students of traditional college age, particularly in New England, is declining while the cost of recruiting those students through tuition discounts, is increasing. Flat high school graduation rates across the country and increased competition from online competitors have negatively impacted the ability of schools with fewer than 5,000 students to successfully increase their enrollments.

I examined enrollment data from the December 14, 2018 issue of The Chronicle of Higher Education, of 30 four-year public and private colleges with the greatest percentage decreases in full-time undergraduates.  Contributing factors included the following:

Four-year public institutions – 14.7 percent decrease

Reduction in availability of federal and state aid

Accreditation problems

Stricter admission standards

Fewer international students

Decreased state funding

Strategic planning changes

Changing demographics

Loss of 25 percent of the student body due to unpaid bills

Four-year private institutions – 9.1 percent decrease

Reduction in college’s offerings

Tightening of student loan regulations

Financial and accreditation problems

Less available state aid

Program cuts

Shift from traditional to non-traditional students

Competing scholarship options at other colleges

The Great Recession

In addition to all of these cited reasons, fewer international students are enrolling in United States’ colleges and universities, and flat progression and retention rates, are also contributing to fewer college and university enrollments.

In next month’s column, I will list some suggestions for vulnerable institutions to consider to avoid closing or merging. In the meantime, should you wish further information, I suggest reading:  Consolidating Colleges and Merging Universities by James Martin and James E. Samuels Peter Jacobs’ article, Here’s How Many Colleges Have Closed in the Past 25 Years, Business Insider, March 12, 2015 and William Tierney’s book, The Disruptive Future of Higher Education, Johns Hopkins University Press, 2014, and Moody’s Investor Service’s recent article, U.S. higher education outlook remains negative on low tuition growth, 2018.

According to an article in Education Dive by Jim Fong, the director of University Professors and Continuing Education, the trend of unhealthy institutional performance continues upward and will continue to do so in the short-term and possibly for the long-term.

Last year was a challenging year for institutions of higher education in the United States. This year may prove to be equally, or more, challenging.

This entry was posted in Colleges, Foreign Students, International Education, International students, Universities by Marguerite Dennis. Bookmark the permalink.

About Marguerite Dennis

Marguerite Dennis has been recruiting internationally for over 25 years, first at Georgetown University in Washington, D.C. and then at Suffolk University in Boston, Massachusetts. During that time she was responsible for establishing a branch campus for Suffolk University in Dakar, Senegal and Madrid, Spain. Marguerite increased the international student population at Suffolk University by 193% from 1993 to 2011 and increased the number of study abroad programs by 135%, from 20 to 47. She monitored the recruitment programs for Suffolk University in 20 countries and hired a network of 10 international educational consultants. She signed agreements in Viet Nam, Hong Kong, Kuwait, Germany, Mexico, France and Argentina.

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