College Uncovered: Closing Time

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Okay, so you’re going to college. But will the college you pick still have its lights on by the time you get to graduation?

It’s a question more and more families are asking as universities and colleges face financial and enrollment challenges, close or merge. We’ll tell you what schools are doing to stay alive, what happens to students when they shut down and how to check on the financial health of colleges.

Listen to the whole series

Scroll to the end of this transcript to find out more about this topic, and for links to more information.

Jon: This is College Uncovered. I’m Jon Marcus with The Hechinger Report …

Kirk: And I’m Kirk Carapezza with GBH. We’re getting out of our Boston studio to start today’s episode and heading to the nearby town of Brookline, Massachusetts.

Jon: Nice neighborhood up here, huh, Kirk?

Kirk: Beautiful view up here, Jon. Is this where you live?

Jon: No, I do not. This is Fisher Hill. It’s a really swanky neighborhood. It was designed by Frederick Law Olmsted, the guy that laid out Central Park. The inventor of the smallpox inoculation lived up here. So did search Serge Koussevitzky, the conductor of the Boston Symphony. These mansions around here are some of the best 19^th-century architecture you can find. I saw one listed this morning, Kirk, for just a little over $8 million.

Kirk: Is there a pool?

Jon: Yeah. Well, one thing apparently this neighborhood didn’t need was college.

Kirk: That’s right. There used to be a college here. It was called Newbury College, and it closed five years ago. It had $11 million worth of debt and a dwindling number of students. It lost $7 million just in its last year. When it closed, the campus was sold for $34 million. So, Jon, the real estate that we’re standing on right now, it was worth more than the actual college.

Jon: That’s right. And some of it is now being transformed into this giant luxury elderly housing complex. You can hear it going up across the street.

Kirk: That’s right. And they converted this part over here, over your shoulder, it looks like, into a dog park.

Jon: Yeah, a dog park where rich people walk their very expensive dogs.

Kirk: Dogs that have Instagram accounts, we found out.

Your dog is on Instagram?

Dog walker: Yup. His name is Bennie in Boston with an “-ie.”

Kirk: Bennie in Boston is a Cockapoo, by the way.

Okay, so a lot of colleges are closing — more of them in Massachusetts than in any other state. But it’s happening all over the country, too. These days, among the things you need to know before you pick a college is whether it will even stay in business long enough for you to graduate. So how do you know whether your school might close? We’ll tell you how to find out.

A lot of colleges are closing around here, and in other parts of the country, hit hard by an enrollment decline. Massachusetts has seen nine nonprofit colleges close or merge since 2016, giving it the rather dubious honor of being first in the nation for nonprofit college closings.

Just a few miles away from Fisher Hill in Newton, Massachusetts, Mount Ida College closed suddenly in 2018. It was the spring, and the abrupt decision, delivered to the campus community in an email, would leave hundreds of students in debt and in limbo for years.

Like Newbury College, Mount Ida was out of cash and out of luck. But at least Newbury gave students a year’s notice about its closure. Mount Ida’s dirty little secret was that to get more students in seats, it had been discounting its tuition heavily. Very few students were paying the sticker price or even close to it. But like a lot of small private colleges here in New England and across the country, Mount Ida’s board seemed to assume the college was just one more marketing campaign away from turning it all around.

Jon: And it wasn’t?

Kirk: No, Jon, it was not.

Newscaster: ‘It’s WGBH’s morning edition. I’m Joe Mathieu. Under a deal announced last week, Mount Ida will shut down. UMass will acquire its campus.’

Kirk: In public hearings, one by one, I heard Mount Ida students and their parents blame administrators for the school’s sudden closure.

Lisa McLean: Someone needs to be held accountable and do what’s right for these students.

Kirk: Lisa McLean said Mount Ida’s president had told parents like her that the college failed because it offered tuition discounts it couldn’t afford. The college was basically cutting the cost to students by more than half.

Lisa McLean: If this is the case, why are they being offered? Why are you preying on our children? Luring them to come to Mount Ida with this nonexistent money?

Jon: Mount Ida is definitely part of a bigger trend, one that’s being felt around the country. At the time, junior Jared Maimon was working part time as a campus tour guide — not at Mount Ida, but 50 miles southwest at another small private college, Nichols College, in Dudley, Massachusetts. Maimon says he didn’t start thinking about the financial challenges of small colleges like Nichols until Mount Ida closed abruptly.

Jared Maimon: And that’s when it kind of popped into my head and I was, like, ‘Oh, man, like, is this something that could happen to us?’

Jon: And he started hearing prospective students and their parents talking about the same things on the campus tours he gave. They started asking him not just about food, dorms and classes, but about whether his college would be around long enough for them to graduate.

Kirk: And, Jon, that’s also when, for the first time, I began getting that question at our higher ed desk. Stressed-out parents started calling me, wanting to know if the colleges they were considering for their kids would still be open in four years.

So how do you know? There’s no surefire way to know whether college is at risk of shutting down. But there are a few things you can look for.

Over the past 20 years, more than 1,900 colleges have closed. About 80 percent of them were for-profits. But the other 20 percent were private nonprofits like Newbury and Mount Ida. That’s according to an analysis by the State Higher Education Executive Officers Association, which tracks these things.

Jon: And last year, 2023, was a record year, with about 80 colleges closing, many of them small liberal arts colleges with enrollments around 1,000 students or less.

Kirk: Eighty! Okay, that’s a lot of colleges — I mean, at least six a month. And experts are predicting many, many more will follow as college enrollment problems are getting worse.

Jon: That’s right, because the number of high school graduates is shrinking and the percentage of those who do graduate high school going directly to college keeps falling. Meanwhile, compared to 40 years ago, college costs have more than doubled. So it makes sense that only one in three American adults now says a degree is worth the cost.

All of these headwinds are about to push a lot of colleges straight off a demographic cliff.

So many colleges have closed recently that there’s even an app to tell you whether your college is on the way up.

Kirk: What? Come on. Are you kidding me?

Jon: Nope. A former administrator at Westminster College in Missouri is now a researcher and founder of something called College Viability. It’s an app that collects publicly available data so that you can compare and contrast colleges across the country.

Kirk: Come on. Will you text me that?

Jon: Sure. Hold on. It’s a little clunky and it’s not exactly scientific. It simply shares the characteristics of colleges that might be financially shaky. But the fact that it even exists, Kirk, proves there’s demand for this kind of information.

Kirk: Definitely. Well, rather than relying on this app. I sat down with Michael Horn. Horn thinks and writes about college closures all the time. He’s the co-founder of the Clayton Christensen Institute, a research outfit that has long predicted lots of colleges would close because the enrollment and tuition numbers simply don’t add up. Sitting in his living room, looking back on 2023, Horn told me that he and his research team were right. A ton of schools did close.

So I asked him: What’s going on?

Michael Horn: Well, I think there’s a few things going on. One, the pandemic forestalled, actually, a lot of colleges from closing, because they were going to close, but then all these federal dollars comes in and basically saves them. And then we’ve got a bunch of colleges that need to close. Structurally, they’re not sound. And 2023, the federal money is gone. They start to collapse.

Kirk: How many schools are we talking about?

Michael Horn: Yeah, it was over one a month last year, in 2023. And the pace is increasing. Right? And this isn’t even counting the for-profit schools that closed. Higher ed has never seen anything like this.

Kirk: Michael, do you predict we’ll see more schools shut down in 2024?

Michael Horn: I think the number’s going to go up and up and up. The real cliff is going to start coming in about two years. So we’ve got a little bit of time. Maybe there was pent-up colleges that needed to close, and so maybe it’ll be about the same. I think at least 20, 25 schools will close, and that doesn’t count the mergers. It’s not going to be less.

Kirk: You’re talking about 2026, when we’ll see the number of 18-year-olds drop precipitously because no one was having babies in 2008, during the Great Recession.

Michael Horn: Exactly. Everyone stopped having babies in 2008. And generally, in the past, after recessions, people started having babies again. That didn’t happen this time, and so we don’t see a rebound. And that’s why a lot of people don’t like the word cliff. They like slide, or something like that — something more gradual. But that’s why people call it a cliff, because it doesn’t rebound.

Kirk: If I’m a prospective student — because, you know, we’re very consumer focused on our podcast — how do I know whether the school that I choose will still be open, will still have its lights on in four years? You’re shaking your head.

Michael Horn: It’s the greatest question, because there’s just not great information for students and families. Everyone asks me this question: ‘How do I know?’ And it’s really hard to tell them. I think what I would do is, frankly, look at a few sources of information. Number one, has enrollment been dropping over the last 10 years? I wouldn’t look in just the last year or two. I would look over a decade. Number two, is enrollment below a thousand students? If so, and the school doesn’t have a really strong name brand, I’d be really worried. And number three, can I look at some historical lists? You know, there’s databases out there about schools that are struggling. Take a look at them and see, was this a school that was already on life support before the pandemic? And if so, I’d be really nervous if it’s hitting on those other two as well.

Kirk: But even those things, there’s no guarantee, right? You think about schools like Hampshire College, right, where Ken Burns has swept in and raised a ton of money to keep that school afloat. It hits all of those targets that you just mentioned, but it’s still open.

Michael Horn: Yeah, absolutely. Look, there are colleges that have basically hit the cliff and then rebounded, right? There’s Hampshire, there’s Sweet Briar College — alumni saved it. Those are schools with strong brands. And so I might say, give them a chance. Frankly, the schools that are closing aren’t generally ones we’ve heard of.

Kirk: You mentioned you get this question all the time. I remember when Mount Ida College shut down here in Newton, people started calling me because they heard me on the radio reporting this, and they said, ‘I’m thinking about sending my kid to this school. Is it still going to be open?’ Do you get the same calls?

Michael Horn: Yeah, because you’re the expert, right? You’re the one, right? Well, I mean, that may be scary to both of us, but, like, you’re the one reporting on this, you’re seeing the numbers, you’re seeing the trend, you’re seeing, frankly, the struggles that students are then having as a college closes on them. Right? They’re trying to transfer credits. They’re trying to find a school that will accept them. They’re trying to find a comparable school that has a major that will work for them. The Department of Education will say, ‘Oh, schools have lots of, you know, brothers and sisters out there you can easily transfer to.’ But if you’re a student in the soup, so to speak, you’re not seeing that big picture. And so it’s scary.

Kirk: And, Jon, there is one other potential red flag. Michael Horn did not mention at first.

Jon: Yeah? What’s that?

Kirk: Well, in the wake of Mount Ida, education officials in Massachusetts created a so-called financial stress test for colleges like the one the federal government launched for banks after the 2008 recession. This was the first of its kind in the country, and it was really controversial. But the idea was to alert students and their parents if a college was in financial trouble.

At the time, the higher education lobby pushed back on the plan. They said no one stress test fits all.

Barbara Brittingham was then head of the New England Association of Schools and Colleges. That’s the regional accrediting body. She told me colleges worried if the public really knew about their financial challenges, their demise would become a self-fulfilling prophecy.

Barbara Brittingham: When an institution is financially fragile, we ought to be watching it. The accreditor should be watching it. Arguably, the state ought to be watching it. But we ought to do it in a way that doesn’t overly burden the institution, which is already working very hard to make things work.

Jon: Well, that makes sense. I can understand that once word is out that a college is in trouble, no one’s going to want to go to that school.

So if the public can’t see this financial stress test, how on earth is it useful? And how do I know if the school I’m choosing will close?

Rachel Burns: You don’t.

Jon: That’s Rachel Burns with the State Higher Education Executive Officers Association.

Rachel Burns: So I work on all of our projects related to financial aid, data and research and finance.

Jon: While financial stress tests don’t appear to have any teeth, she says they can still effectively protect consumers behind the scenes, almost like the pipes in a building. You don’t see them, but it’s good to know they’re there, right? And she thinks more states should install them.

Rachel Burns: Absolutely. State agencies should be requiring institutions to have plans in place in the event that a closure happens.

Jon: College closings disproportionately affect low-income and Black and Hispanic students. So Burns says these plans should include pathways for all students to continue their educations.

Rachel Burns: So whether they transfer to another institution that has agreed to take those students, if they have a really strong sort of crosswalk of how their credits might apply to other local institutions, and that there’s some sort of — this is less likely — but some sort of financial recompense for students. So if they’re getting tuition returned for that semester or if they’re getting any sort of assistance, you know, because that’s such an important indicator for whether a student is going to continue after a closure, is if they had some sort of support from the institution, whether it’s financial or, like, transfer agreements.

Jon: Burns says one reason more states haven’t followed Massachusetts’ lead is the strong private college lobby.

Rachel Burns: I mean, that’s part of it. I think some institutions are never going to be beholden to those rules because, you know, you wouldn’t ask an Ivy League institution or a really large land grant. And that’s not really who we’re focused on anyway.

Jon: Instead, they’re focused on small private colleges where the enrollment cliff has already arrived. Forty percent of colleges in this country enroll fewer than 1,000 students.

Another problem, Burns says, is that most state agencies don’t have the capacity to monitor the financial health of colleges.

Rachel Burns: We’re not going to catch any of the bad actors out there with authorization, because they’re already authorized. State agencies who are responsible for this authorization process just have to pick their battles. And even if those policies are on the books, they’re not always being enforced. So it’s on both sides of the equation. You know, the institutions aren’t doing it, but then the agencies aren’t enforcing it.

Kirk: Okay. So this gets wonky and bureaucratic pretty fast, but it’s so important. So let’s slow it down a bit. Bring it back to earth and explain why it matters to you. Jon, what happens to students and their credits when their college is closed?

Jon: Well, there is some research on this, and it shows there are two different scenarios. One is where a student is attending an institution that has a teach-out plan, or something similar between the closing institution and another college. It’s almost like automatic enrollment. In those cases, students tend to do pretty well. All or most of their credits transfer, and they just keep going as if almost nothing happened, although they might have to move or become an online student. Two thirds of those students re-enroll and they go on to complete a credential.

But Rachel Burns, who’s studied college closings, says then there are the students she’s most worried about. And this is the majority of students at colleges like Mount Ida, that give students too little warning that they’re going to close.

Rachel Burns: These are what we call the abrupt closures. They happen pretty quickly. There’s not a lot of notice, a lot of warning. And the institution itself doesn’t have any plan in place. And those students may be able to get their credits to transfer. They will always be able to access their transcript, but there’s no guarantee that another institution will take those credits, particularly if it’s a closure that happens for some sort of accreditation issue.

Jon: So if a school is losing accreditation, for example, those credits essentially have no value anymore.

Rachel Burns: The majority of students, when they’re in that situation, a little over half just don’t re-enroll. And if they do re-enroll, only about a third of them end up completing. So it’s a pretty significant barrier to getting to getting any further. And so then they tend to end up worse off. So they’ve spent all this time and this money for credits that don’t mean anything and never earn a credential.

Kirk: Wow, let’s repeat that. Half of those students whose colleges shut down abruptly never even re-enroll.

Jon: Yeah, 52 percent of those students never do. So they end up with debt and no degree.

Kirk: But that means the other half do transfer and continue on. Take Sam Marshall. She and her sister, Siobhan, were both enrolled at Mount Ida College when it announced it would shut down.

Sam Marshall: Yeah, I was in an accounting class, and I remember my professor looking like somebody had told her to look at her email. And she goes, ‘Why?’ And they’re like, ‘You need to see this.’ And she opens it and she goes, ‘Okay, so you all need to open your emails. And I’m going to allow you to leave for the day, and we’re just going to call class done. Because you guys don’t have a school and I no longer have a job.’

Siobhan Marshall: They were still giving tours that day, after I saw the email.

Kirk: Weeks later, the Marshall sisters attended a college fair on campus, and Sam decided to transfer to nearby Newbury College.

Sam Marshall: When Newbury came to Mount Ida to recruit students, I had sent an email to the admissions office asking if the college was in any danger of closing down, if they’re in any financial trouble. And they said, ‘Oh, no, we don’t have any plans of closing anytime soon.’ So I said, ‘Okay, I’ll go there.’

Kirk: But then a year later, Newbury shut down. Sam says she was depressed.

Sam Marshall: Oh, I was done. I just wanted to drop out. But I had to keep going.

Kirk: Sam transferred once again to Suffolk University in Boston. All of her credits didn’t transfer, though, so she says she had to enroll for a fifth year. Her experience at Mount Ida and then Newbury undermined her motivation and her faith in higher education.

Sam Marshall: I didn’t join any clubs. I wasn’t getting involved. I just wanted to graduate.

Kirk: And she worried about Suffolk University’s fate.

Sam Marshall: I don’t know, I always thought in the back of my mind that it was going to shut down, too.

Kirk: After four years, Sam thought she should have been done with college. But administrators told her she didn’t have enough credits.

Sam Marshall: So I did have to take another year. And even then, they said I would have to do another semester. But I said, ‘That makes no sense. I’ve done this much schooling.’ So the guy who I was talking to, very nice, looked into my past classes and said, ‘Oh, I found credits. You’re good to go.’

Kirk: She graduated, finally, with a degree in interior design. Meanwhile, her sister, Siobhan, was determined to finish her education so she could work in the funeral industry.

Siobhan Marshall: So I moved seven hours and out of state to a school that was supposed to provide me with the same education. And I stayed there for — what was it, like, two and a half years? — until Covid. And then the pandemic happened, and then I came back and immediately started working in a funeral home. And I worked all through the pandemic, and I was trying to complete my education during that time.

Kirk: That’s when Siobhan says she found out she’d been sold what she describes as …

Siobhan Marshall: … I was sold a lie going to New York because my education wasn’t comparable. There’s different laws in the two states. There’s so many things that I was told were interchangeable that were not. And it made working in this state while having to learn in that state pretty impossible.

Kirk: Now in their mid 20s, the two Marshall sisters are living at home with their parents, facing nearly $100,000 in student loan debt — each — and working jobs that don’t necessarily require their degrees.

Kirk: Are you surprised that Americans have so little faith in higher education?

Sam Marshall: No, not at all. Personally, I think I would be better off joining a trade or something else. I don’t know. It’s tough.

Kirk: In 2019, three former Mount Ida students filed a class-action lawsuit against the school’s leaders, claiming they were deliberately misled about the college’s ailing finances. But a federal judge dismissed it, saying Mount Ida had made all of its required public disclosures showing that the school had been operating at a deficit for three years — if they had bothered to check it. Philanthropist Bob Hildreth funded the lawsuit.

So why did you get involved?

Bob Hildreth: Because this was at the very beginning of colleges closing. I thought that students were being screwed by a process that didn’t give them enough time to pursue their education.

Kirk: Hildreth called the judge’s ruling appalling, not just for former Mount Ida students, but for college students and their families across the country.

Bob Hildreth: Universities, which were increasingly corporations, were treating their kids like Wall Street treats their employees. When they get into financial trouble, they just throw them out onto the street.

Jon: Harsh words. Well, Kirk, five years after Mount Ida shut down, higher ed researcher Rachel Burns predicts we’ll see more colleges head for the exits. It’ll be another long year of college closings.

Rachel Burns: We kind of anticipated as soon as federal funding dried up, there would be a bunch of closures right away. But we’re seeing that it’s actually sort of trickling across several years because every institution was kind of in a different place at the start of the pandemic. So it makes sense that they’re recovering or not recovering at different rates. So I don’t know that I would say 2024 will be historic, but I think the next three years combined, once we hit that demographic cliff — I think that will be significant. Probably the most closures we’ve had since about the 2010s, when there were all of the shutdowns of the private for-profits that had shady practices.

Kirk: So where is the accountability? The problem, Michael Horn says, is that the boards of trustees who are supposed to be overseeing these colleges are not really on top of this issue.

Michael Horn: They’re not asking the right questions of their presidents and provosts to say, are the trends in the right direction? This is a really terrible market in the sense that the buyers, the students, they have very little information. The college leadership has all the cards. And if, again, the school goes under, that hurts. That makes you uncertain about, ‘Gee, my neighbor just had this happen to them. Is this a good place for me to spend my next four years? Maybe I ought to just get a job.’

Kirk: Should more states adopt similar financial stress test?

Michael Horn: I think all states ought to adopt something like what Massachusetts has done, because the accreditors are not on top of this as much as they should be. They’re one line of defense. The federal government is a second line of defense. But it’s too big a country for them to be able to monitor this. And states are a third line of defense. And this is a really great place they can step in.

Jon: And more states might need to step in because higher ed’s enrollment problems are not going away. So as more colleges stop operating, experts say states will need to help protect consumers against the fresh wave of closings.

Kirk: This is College Uncovered from GBH and The Hechinger Report. I’m Kirk Carapezza.

Jon: And I’m Jon Marcus.

Kirk: Our show is created by Jon …

Jon: … and Kirk, and it’s edited by Jeff Keating. Meg Woolhouse is our supervising editor and Ellen London is the executive editor.

Kirk: Gary Mott and David Goodman are our mix engineers.

Jon: All of our music is by college bands. Our theme music is by Left Roman out of MIT. We also used music by students in the Pacific Jazz Ambassador program at University of the Pacific. In today’s episode, it was “The Crossing” by Marwan Ghonima.

Kirk: Additional sound by W.M. Quincy from freesound.org.

Mei He is our project manager and head of GBH podcasts is Devin Maverick Robins.

Jon: We’d love to hear from you. Send us an email to gbhnewsconnect@wgbh.org and tell us what you want to know about how colleges really operate. And if you’re with a college or university, tell us what you think the public should know about higher education.

College Uncovered is a production of GBH News and The Hechinger Report and distributed by PRX. It’s made possible by Lumina Foundation.

Kirk: Thank you so much for listening.