With student pool shrinking, some predict a year of college closings

A new wave of college closures is expected to begin this year.

The colleges won’t be closing solely because of Covid, although it did flip the entire universe of higher education on its head. But many struggling colleges have been able to keep their doors open longer than expected in part because of help from federal and state Covid relief funding. Now, for many, those funding streams have run dry and it’s time to face the inevitable.

Holy Names University in California and Cazenovia College in New York are among those that recently announced plans to close and re-route their students after the spring semester. They will join the list of 35 colleges that closed their only or final campus in 2021, and 48 more in 2022, according to an analysis of federal data by the State Higher Education Executive Officers Association.

More such closure announcements are expected, this year and next. Students are often victims, too, in that many of them give up their studies or are unable to find a new path to earning a degree.

Most of the colleges that will close in the coming years have been on wobbly ground since before the pandemic took hold, said David Attis, managing director of research at EAB, an education consulting company.

Enrollment in nearly every type of college took a hit during the pandemic, and birth-rate calculations suggest it’s only going to get worse, with fewer high school seniors graduating after 2025. When fewer students enroll in college, institutional revenue declines, but costs almost never do, which creates a problem.

Now, for colleges that were already in a precarious financial situation before the pandemic, Attis said, “the choice is close or collaborate.”

Colleges can stabilize by pooling their resources and working together, Attis said, like Bloomfield College and Montclair State University in New Jersey, which announced plans to merge by June of this year.

But this approach can be challenging. Often, the colleges that find themselves in these predicaments are relatively small and serve a niche community of students, rather than drawing from a broad, national pool, Attis said. They tend to be regionally specific, single-gender, religiously affiliated, or narrowly focused in what they teach.

And even when they share similarities with another college, each campus tends to have its own distinct identity and often administrators prefer to maintain autonomy, Attis said.

“What we are trying to make recommendations about is, have a really good plan in place before closure happens. Because institutions get to this point of being in financial distress or really low enrollment and it’s kind of a panic situation.”
Rachel Burns, senior policy analyst, State Higher Education Executive Officers Association

Colleges will need to get creative and cut costs in order to thrive as overall higher education is shrinking, Attis said.

Rachel Burns, a senior policy analyst at the State Higher Education Executive Officers Association, or SHEEO, said she is also expecting to see a “catch-up period” of college closures that were temporarily put off by Covid relief funds.

When college leaders decide they have no other choice but to close, there are right ways and wrong ways to handle it, Burns said.

At a minimum, Burns said colleges should give students three months’ notice of the closure, though a full semester of advance notice would be better. The college should have plans to retain student records and refund tuition. And it should establish partnerships with neighboring colleges for their students to transfer and earn a degree in their chosen field of study.

Even when these measures are taken, only about half of students whose colleges close go on to earn a degree, research from SHEEO and the National Student Clearinghouse has found.

Because closures can be so disruptive to students and so detrimental to college completion, Burns said it is better to proactively respond to the problems and prioritize the student pathways as early in the process as possible.

Just as colleges have plans for natural disasters and other big, terrible events, Burns said they should have plans for a financial crisis, and how they could close the institution and best protect their students. This type of plan would include an agreement with other institutions for transferring students (known as a teach-out agreement), plans for record retention, for how to refund tuition and other logistical details. SHEEO recommends that this type of plan be required in order for colleges to be authorized or reauthorized by their respective state higher education accreditation authorities.

“We’re not saying we can solve college closures,” Burns said. “What we are trying to make recommendations about is, have a really good plan in place before closure happens. Because institutions get to this point of being in financial distress or really low enrollment and it’s kind of a panic situation.”

This story about college closures was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for our higher education newsletter.