In recent years, quite a few colleges have either shut down permanently or merged with others due to a significant drop in enrollment. In fact, 2022 saw at least one million fewer students enrolling in college compared to before the pandemic. This could be due to a few reasons, including the rising cost of education, less relation between a future job and a person’s college major, an increasingly small candidate pool, and overall lack of public interest in going to a four-year college. Let’s learn more about falling college enrollment below.
The COVID-19 pandemic also significantly impacted enrollment rates as many students became unable to pay off their tuition and had to unenroll or drop out due to financial troubles caused by the pandemic. Financial strain is affecting high schoolers’ plans after graduation as well with an increasing number of people choosing to attend community college or a public college instead of a private one. Other high school graduates are planning to take a gap year to save up money to attend college at a later time.
Colleges now have to compete for enrollment. Community colleges actually experienced a drop in enrollment by 15% between 2019 and 2021. However, more selective colleges saw an increase in enrollment by about 3%. This is possibly due to the competitive advantage highly selective schools like Ivy Leagues have over public and community colleges, such as offering degrees that are considered more valuable.
Highly selective schools usually have access to large endowments from gracious donations that allow them to offer attractive financial aid packages to students as well as fund research and fellowship programs. Schools that are able to spend only about 5% of their endowment each year can undertake less risk for the future market value of their investments.
Due to the increasing number of colleges going out of business, it is very beneficial to understand how your chosen college is doing financially before you enroll. Reviewing a school’s endowment reports and financial responsibility composite score can give you a better idea of how the college is doing. Looking for indicators such as frequent changes in leadership, potential mergers, accreditation issues, and declining enrollment in public news reports can help you decide whether the college is financially stable as well.
If your college does eventually close, you’re not completely out of luck when it comes to finishing your degree. Some colleges may sign transfer agreements with other universities so students don’t have to quit. Doing your research can help you understand your federal loan discharge options. However, reaching out to a legal aid office near you can aid you in maneuvering through the college shutdown process as smoothly as possible.
Is your chosen college safe from the effects of falling college enrollment?
