Why extra faculties are closing within the US

The mid-2010s saw a spike in college closures in the US, particularly among private, nonprofit schools. This trend has affected tens of thousands of college students across the country.

According to a CNBC analysis of data from Higher Ed Dive, 91 private US colleges have closed, merged with another school, or announced plans to close since 2016. Almost half of these schools were closed after the outbreak of the Covid-19 pandemic in 2020. For many struggling schools, the pandemic was the last straw that broke the camel’s back – but two main issues kept coming up during the closures: finances and enrollment.

“There are two major issues affecting higher education right now, particularly admissions and enrollment,” said Robert Franek, editor-in-chief of The Princeton Review. “First, it’s the admission cliff, and that’s the descent ahead.” [in the number of prospective students]. In 2025, we will graduate from our junior high school classes by population. And most enrollment experts have wringed their hands over that 2025 date, but many schools are already seeing those enrollment declines.”

According to Franek, about 95% of U.S. colleges are tuition-based, which means they rely on student money to operate. Declining enrollment means less money, fewer degree programs, and eventually a closed institution.

“I think it’s an expression of an unsustainable operating platform, which means a heavy reliance on tuition that can’t always keep up with inflation.” [or] with the drop in enrollments,” said Emily Wadhwani, senior director of Fitch Ratings. Colleges “cannot increase tuition prices any further in the hope that the net remainder, after accounting for scholarships, rebates and the like, will be enough to offset your increase in cost basis.”

Watch the video above to learn the headwinds higher education is facing and hear from students impacted by college closures.

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