A new analysis of data provided by Higher Ed Dive has revealed that since 2016, 91 separate private colleges have closed, merged with another school or announced plans to close.
The trend was helped along by the onset of Covid and the ensuing reaction that the country had to the virus. As CNBC reports, colleges that were already struggling heading into the pandemic found that lockdowns were the proverbial "straw that broke the camel's back".
Robert Franek, editor-in-chief of The Princeton Review, told CNBC: “There are two significant issues affecting higher education right now, specifically, through the admission and enrollment offices.”
He continued: “Number one, it is the admission cliff, and that is the impending decline [in the number of prospective students]. We’ll be graduating our lowest high school classes by population in 2025. And most enrollment professionals have been wringing their hands about this date of 2025, but many schools have seen those enrollment declines already.”
Roughly 95% of U.S,. colleges are reliant on tuition and funding from students to operate (others are reliant on things like public funding and/or endowments to help fund their operations).
Fitch Ratings Senior Director Emily Wadhwani added: “It’s a reflection of, I think, an unsustainable operating platform, meaning a heavy reliance on tuition, which can’t always keep up with inflation [or] with erosion in enrollment.”
Wadhwani said that schools “can’t keep hiking tuition sticker price in the hopes that the net residual once you account for scholarship and discounting and the like is going to be enough to offset your growing expense base.”
A video report provided by CNBC.com went into further depth on the issue, noting, in the case of colleges like Lincoln College, that cyberattacks also played a role in closures. The video profiled that 68% of for-profit schools also closed due to an enrollment cliff, due to simply "less people being born" during the generation of what would be new college students.
The video also looked at The King's College, which announced it needed $2.6 million before warning students that it would have to close and they would have to begin looking elsewhere. They provided potential transfer schools to their student base, which is located in New York City.
Finally, the video focuses on how enrollment driving finances "is a given" for colleges.
