Colleges across the country are experiencing falling enrollment rates that are ultimately leading to colleges closing their doors or merging with others. The period between 2019 and 2021 witnessed the number of students enrolling in college drop by almost 8%, the largest drop in a two-year timeframe in the past 50 years. In 2022 alone more than 1 million fewer students are attending college compared to before the start of the pandemic. Factors such as rising college costs, lower return on investment, smaller college-age populations, and rising lack of interest have all contributed to the fall in enrollment.
The COVID-19 pandemic has also accelerated the already declining enrollment rate. In 2020, 56% of college students in the U.S. said they could no longer afford to pay their tuition while 70% of college students in fall 2021 said a huge factor affecting their education plans was college affordability. In fact, high schoolers now are more likely to choose less expensive college options, like going to a community or public college. It is predicted that 36% of students will attend community college, an increase from 20% before the pandemic began.
Research shows that community colleges saw enrollment fall by 15% even though selective colleges experienced an enrollment increase of 3.1%. Smaller schools have also experienced more struggle than bigger ones. Data shows 79% of schools with fewer than 5,000 attendees are having problems staying open while 52% of schools with more than 30,000 face similar issues. With the continuing decline in enrollment, colleges are competing more than ever to get enough students attending each year in order to maintain a sustainable tuition revenue.
Ivy Leagues and other selective schools have shown to have a competitive advantage compared to other colleges. One reason is because of popular degrees being considered more valuable when obtained from highly selective schools. Another reason is the larger endowments these schools obtain that allow them to offer sufficient financial aid or tuition assistance to students.
Schools are able to use endowments as well for activities like student aid programs, fellowships, and research. Universities that are able to spend a small part of their endowment yearly can assume less risk for the future market value of their investments. Unfortunately, only a handful of universities have endowments that are worth more than $1 billion.
Pursuing a college degree is beneficial for anyone, but is your choice in school a financially viable one? You can determine whether your school is at risk of closing by reviewing their endowment reports, possible tuition discounts, financial responsibility composite score, or news reports. Some colleges can close slowly over several months or years, but certain colleges have no choice but to shut down almost immediately. If your college does close, you can reach out to offices that offer legal aid for help or look into federal loan discharge options that allow you to get a refund on your payments.
With enrollment rates predicted to continue falling, competition for students will remain high among colleges.
