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
Stricter admission standards
Fewer international students
Decreased state funding
Strategic planning changes
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
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.