More than a quarter of private colleges are at risk of closing, a new projection shows
Private Colleges Face Financial Reality. Education Markets Shift As They Always Have.
What Happened
A new analysis projects that over 25% of private colleges in the US are at financial risk of closure due to declining enrollment, rising costs, and reduced endowments. The study examined factors like debt-to-asset ratios and enrollment trends to identify institutions most vulnerable to closure.
Historical Context
American higher education has weathered institutional closures before: during the Great Depression, hundreds of colleges closed. In the 1970s recession, 47 colleges closed in a single year. Between 2016-2020, about 91 colleges closed annually. The total number of degree-granting institutions has actually grown from 1,851 in 1976 to over 5,000 today, suggesting the market regularly sheds weaker institutions while adding others. Private colleges represent about 40% of all institutions but serve only 20% of students—most Americans attend public universities that are not at risk.
What's In Your Control
If you're a current student: researching your institution's financial health and having backup transfer plans. If you're a prospective student: focusing on schools with strong endowments and enrollment trends. If you're a parent saving for college: considering that public universities remain stable and cost-effective options.
Does This Require Action?
For families with college-bound students: worth researching specific institutions' financial health. For everyone else: this is a market adjustment story affecting a minority of higher education. Most students attend public institutions that aren't closing.
Source: NPR
