Coursera, edX, Udemy, etc. offer alternative means for taking other college level courses. And new entrants into the marketplace – such as Western Governors University and Southern New Hampshire University – have proven they can disrupt traditional institutional offerings.
Equally, as enrollments declined more generally, colleges and universities started to experience cultural and financial pressures that threaten their viability. In fact, some have argued that governmental relief to colleges and universities during the pandemic – some $76 billion that allowed millions to continue to enroll – merely prolonged inevitable closures.2
So, the threat of closure is real. And the consequences extend not just to specific institutions being affected, but to the students who are in attendance.
Information on Closures
Some 91 colleges and universities have closed or merged since 2016. In addition, almost half that number – at least 44 public or nonprofit colleges as 28 August 2023 – have closed, merged, or announced closures or mergers since March 2020, which was effectively the start of the pandemic.3 Some statistics related to those closures:
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between 2004-2020 were for-profit schools.
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Predictions on how many colleges and universities will close in the future vary widely, but none offer much hope.
For example, at the high end of prediction rates is Thomas Frey who, first writing back in 2013, estimated that 50 percent of colleges would fail by 2030. He cited the following eight reasons for this prediction:
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Harvard Business School Professor Clayton Christensen and Forbes contributing editor Michael Horn made a similar prediction, though they made a more nuanced claim in 2013 that “a host of struggling colleges and universities — the bottom 25 percent of every tier, we predict — will disappear or merge in the next 10 to 15 years.”6 By 2018, after revisiting a number of considerations, the same authors concluded that, though their predictions may have been off, “they are directionally correct.”7 Providing yet again a more nuanced calculation, the
authors came to the conclusion that “it’s not
that hard to paint a picture of how 25% of existing institutions — be it 550 nonprofit and public four-year institutions or 1,100 degree-granting institutions — will close, merge or declare bankruptcy in the years ahead.”8 The colleges at greatest risk, in their view are the vast number of small institutions, particularly those located in rural areas in the Northeast and Midwest where the biggest declines of students are slated to occur (40 percent of those colleges and universities have fewer than 1,000 students.)9
Factors Contributing to Closures
The reality is: colleges and universities are operating in a very difficult business climate. According to the National Association of College and University Business Officers (NACUBO), the top five business issues confronting colleges in 2022 are: supporting and maintaining the workforce, meeting student’s evolving needs, providing secure and
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