As many as 86 colleges have either shut down or merged with other schools between 2016 and 2019. The 2019-2020 school year alone saw 53 colleges unfortunately close permanently while 2022 witnessed 1 million less students attending college compared to before the start of the pandemic. College enrollment is experiencing a significant decrease, but why is it happening?
College enrollment rates are falling due to reasons that include rising education costs, a weak return on investment, a smaller candidate pool, and overall drop in interest. The pandemic also had a big effect on enrollment rates as the financial impact of COVID-19 caused many students to find different ways to pay for their education, decide to unenroll or drop out in favor of full-time employment, or find alternative education options. As more parents tap into their child’s college fund in order to pay for expenses during the pandemic, several high schoolers are most likely going to choose a less expensive college option, like community college or taking a gap year to save for college, after graduating.
Between 2019 and 2021, community colleges saw enrollment fall 15%. However, highly selective schools had enrollment increase by 3.1%—bringing levels to those similar to before the pandemic. Colleges with fewer students were also more likely to struggle in terms of enrollment and tuition revenue as more schools compete for students.
In contrast, Ivy Leagues and other similar schools don’t experience the exact same struggle as they have sought-after degrees that are considered higher in value compared to public and community colleges. They also have better endowments, or financial assets made from charitable donations, that allow for better financial aid given to students. These universities also use endowments to fund activities from general operations to research. In fact, schools that spend around 5% or less of their endowment in one year will experience less risk involved with their investments.
With higher education being a bigger investment than ever before, it’s important to make sure your choice is financially viable for the long run. You can check on the status of your chosen college by looking through official documents like endowment reports. If your college does eventually close, it is helpful to know they sign transfer agreements in such cases. Being in touch with local legal aid offices can help you gain useful help and advice as well as researching possible federal loan discharge choices you may have.
With the challenges colleges across the country are currently facing, it’s really important to invest in the right college.