Over 70 colleges closed in the U.S. since 2020. In 2024 alone, nearly 20 nonprofit colleges and universities closed — a stark reminder of higher education’s challenges.
Was there any way these institutions could have overcome those challenges?
Let’s analyze the top reasons why these institutions closed:
Most Prevalent Factor – Declining Enrollment
The easiest way colleges thrive is to grow enrollment each year. However, many institutions saw significant enrollment drops over the past decade.
- Over 50% Decline in a Decade – Notre Dame College and Fontbonne University both saw their enrollments more than halve over the past ten years.
- Rapid Post-Pandemic Decline – Oak Point University experienced a dramatic drop in enrollment following the COVID-19 pandemic and closed abruptly.
- Consistent Multi-Year Decline – Most institutions saw a steady decrease in enrollment over the past several years. Goddard College, Wells College, Eastern Nazarene College, and Clarks Summit University experienced consistent enrollment declines, ultimately leading to closure. Pittsburgh Technical College also saw a steep decline in just the past couple of years.
Financial Pressures + Rising Operating Costs In Addition to Declining Enrollment
Declining enrollment is a significant factor in college closures, but when coupled with financial pressures and rising costs, schools can be forced to close.
- Deficits and Financial Instability: The Pennsylvania Academy of the Fine Arts (PAFA) faced a multi-million dollar deficit, forcing it to end academic programs. Many other institutions, including Notre Dame College, Fontbonne, University of Saint Katherine, Wells College, Oregon College of Oriental Medicine (OCOM), Eastern Nazarene College, and Clarks Summit University, cited financial pressures as a significant factor in addition to falling enrollment.
- Financial Management and Endowment Depletion: Birmingham-Southern College‘s financial woes were compounded by past miscalculations of financial aid and the depletion of its endowment. Union Institute & University also suffered from alleged misuse of funds. Pittsburgh Technical College faced accusations of financial misuse.
- Unanticipated Expenses: Philadelphia’s University of Arts cited “significant unanticipated costs, including major infrastructure repairs” as a contributing factor to its abrupt closure.
External Factors and Specific Circumstances
Even if schools can weather the falling enrollment and rising costs, other factors can lead to college closures.
- Regulatory and Legal Issues: Eastern Gateway College (EGCC) faced significant legal and fiscal problems related to its “free college” program and allegations of financial mismanagement.
- FAFSA Rollout Issues: Several colleges, including the Delaware College of Art and Design, pointed to problems with the new FAFSA rollout as a contributing factor to their financial difficulties.
- Accreditation Issues: Keystone College faced a potential loss of accreditation due to non-compliance with standards, including governance and finance.
How Better Strategic Enrollment Management Could Have Helped
Many of the institutions above have been around for decades, so it’s most likely strategies that worked even ten years ago are no longer effective in today’s market. Schools need to adapt and evolve, or they’ll die. Institutions that embrace new technology, including data analysis, segmented marketing, and outreach optimization will survive the declining enrollment trends. Especially if those schools also have strong retention tools in place, such as financial counseling for students to help them plan their debt repayment.
Contact IonTuition to learn more about how to improve your institution’s strategic enrollment management.