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Most people believe in its value University And, in most cases, higher education institutions can withstand significant challenges financial challenges Throughout history.
But now, the number of colleges that will close over the next five years is Expected to soara new study finds.
A working paper from Higher Education UK said that higher education as a whole “faces serious financial headwinds, both due to longer-term trends and the post-pandemic recovery”. Federal Reserve Bank of Philadelphia.
“In today’s economic environment, colleges and universities face unprecedented fiscal challenges,” Fed researchers wrote.
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According to the latest statistics from economic software and analytics company Implan, at least 20 universities will close in 2024, and another nine schools have announced that they will close in 2025.
A Fed analysis found that in the worst-case scenario, as many as 80 universities could close between 2025 and 2029.
College enrollment declines
Not only are fewer high school students enrolling in college immediately after graduation, but the overall population of college-age students is shrinking, a trend experts call the “enrollment cliff.”
“A key challenge is declining enrollment, with the number of students at degree-granting colleges and universities falling by 15% from 2010 to 2021,” Fed researchers said.
These days, there are only approx. 62% of high school students In the United States, the rate of immediate entry into college is down from 68% in 2010, government data shows. Those who opt out are often low-income students who increasingly feel that higher education is out of their reach.
As some private colleges approach prices six figures per yearstudents are increasingly pursuing Alternatives to a Four-Year Degreesuch as joining the workforce or completing a certificate program or apprenticeship.
cost inflation Candi Clouse, vice president of Implan, said they have been instrumental in changing mindsets.
“They don’t want to take on student loan debt,” she said.
Experts also warn Problems with last year’s Free Application for Federal Student Aid will result in fewer students applying for financial aid, which could lead to Enrollment decline.
A wave of universities under the financial crisis
The Fed report found that increasing competition for fewer students, higher operating costs and state limits on tuition increases at public universities limit institutions’ ability to increase tuition revenue.
Implan’s Clouse said this has left some colleges and universities in serious financial trouble.
“We’re seeing declining birth rates across the country, rising education costs and rising operating costs,” she said. “We see that the university is the right size.”
Krause added that at the local level, these closures can be devastating.
“When schools closed, a lot of people were in trouble,” she said.
On average, each closed college or university affects 265 jobs and $14 million in labor income, according to Implan’s calculations.
“It can be huge for these small cities when they rely on an institution that may have been around for generations,” Krause said.
Federal funding provides a temporary stopgap for cash-strapped colleges during the pandemic. In the years since, there has been a wave of schools declaring “financial emergencies,” according to the Federal Reserve.
To stay afloat, some universities have cut staff and cut academic areas of study, including sociology, creative writing, music and religion courses.
However, not all schools are struggling. In fact, the country’s most elite institutions are making progress better than ever.
University applications have begun
Overall application volume as of November 1 up 10% The 2024-25 application season is slower than the year before, even though more applicants are applying exclusively to public schools, according to the latest data from the Common Application.
Private colleges are becoming a path only for those who can afford the tuition, Other reports show.
According to the agency, children from the richest 1% of families are more than twice as likely to attend highly selective private colleges. National Bureau of Economic ResearchThis continues to “amplify the persistence of privilege across generations,” the report found.
at the same time Costs are still risingTuition and fees plus room and board at four-year private colleges will average $58,600 in the 2024-25 academic year, up from $56,390 a year ago. Tuition at a four-year, in-state public college is $24,920, up from $24,080, according to the agency. college boardwhich tracks College Pricing and Student Aid Trends.
