Could a fifth of America’s colleges really face the chop?

The Economist published an article titled Could a fifth of America’s colleges really face the chop?

« A study by Parthenon-EY, an education consultancy, of over 2,000 colleges suggested 800 are so small or inefficient that they may go bust. Around one-fifth run budget deficits. Others pile up debts, fail to build sufficient endowments or sustain student numbers only by agreeing to painfully big discounts on fees. Mr Grawe points out that eight colleges were already closing each year before the pandemic. »

« Those that fail are usually small, among the 40% of higher-education institutions with fewer than 1,000 students. In the past decade these have seen enrolments slip faster than medium-sized ones. (The biggest typically still thrive.) Of the 72 colleges Parthenon found had shut since 2007, almost every one was small. They are vulnerable because they depend most on revenue from students; others find ways to hire out campuses for conferences, raise research funds, earn bequests and the like. »

« Robert Zemsky of the University of Pennsylvania, who co-wrote a recent book [The College Stress Test: Tracking Institutional Futures across a Crowded Market] on the growing woes of universities, expects a “collapse, lots of closures” of smaller colleges, notably in the wider Midwest. He blames both demography and teaching methods that do not suit some students, noting how, at many universities, more than a quarter of freshmen quit in their first year. Curriculums, he says, are outdated, faculty are out of touch and four-year degrees should be cut to three to save costs and force a rethink of higher education. »

« Ms Nix-Hines counted 134 lawsuits, mostly class-action ones, levied against the “whole gamut” of private and public colleges by late May, mostly as students sought the return of tuition fees, saying they received a substandard service online. »