How many colleges and universities have closed since 2016?

Education Dive

The last two years have been tumultuous ones for the U.S. higher education industry.

Increased regulation and falling enrollment were among several factors contributing to the closure or consolidation of hundreds of colleges and universities around the country.

That consolidation also had an impact on the priorities of ones that remained open. Institutions are adding degree programs in emerging tech fields such as artificial intelligence, dropping low-enrollment programs including some in the liberal arts, and looking online where they can reach a bigger audience with niche subject matter.

That activity is ongoing, which is why we’ve started publishing a list of closures and M&A activity from 2016 to the present. We’re pairing it with analysis of the major trends the data reveal. We’ll update the list and our analysis as we hear about closures, M&A and other consolidation. We’re also keeping track of major news around departments and programs added, dropped or otherwise changed each quarter.

If you see something we missed, let us know by using this form. You can see the full list here.

Below, we explore some of the biggest trends in higher ed consolidation.

The future of for-profits

Education Dive’s list includes more than 50 for-profit colleges that closed, were acquired or consolidated since 2016. Among them are chains such as Brown Mackie, ITT and DeVry that operated tens of campuses across the country, meaning the count of affected locations is much higher.

Data from the National Center for Education Statistics show that more than 100 for-profit colleges closed between the 2016-17 and 2017-18 academic years alone, while 20 nonprofit colleges shuttered during that period. And although the number of credentials issued increased 1.2% from 2012-13 to 2016-17, for-profits offered nearly 30% fewer than nonprofits.

The for-profit sector has been in a downward spiral since 2016, when the Obama administration removed accreditation from several privately run groups responsible for ensuring colleges meet certain educational criteria. The decision, supported by two regulations designed to increase governance over for-profits — the gainful employment and borrower defense to repayment rules — followed the high-profile collapses of for-profit chains ITT and Corinthian Colleges when they were denied federal student aid from the Education Department.

The Trump administration has said it plans to repeal those rules but likely will miss the deadline, contributing to regulatory uncertainty as the struggling industry explores its options. For-profits have taken several paths following the collapse. The biggest move yet involves the for-profit Kaplan University, which was acquired by Purdue University in 2017 to form the framework of the nonprofit’s online education platform.

DeVry University, a financially troubled for-profit that enrolls 46,000 students nationwide, is in the process of being acquired by a venture capitalist whose company says it has “a long term view” focused on student outcomes, though critics say it lacks experience with an institution of that size.

Meanwhile, Grand Canyon University recently won approval to change status from a for-profit to a nonprofit institution, though it will operate under a for-profit parent that handles support services such as technology, marketing and financial aid.

Several shuttered for-profits on our list — including Brown Mackie College, Medtech Colleges and Le Cordon Bleu Colleges of Culinary Arts — were under the oversight of embattled accreditor ACICS, which lost its federal recognition in 2016. The Trump administration temporarily reinstated that recognition in 2016 and recently said it was back on track to regaining it fully. However, the extent to which it has met key criteria such as endorsement from peer accreditors has been disputed.

Small liberal arts colleges fight to stay open

A different set of headwinds is contributing to a spate of closures among small liberal arts colleges, many of which have a religious affiliation.

Most significantly, undergraduate enrollment is on the decline, reducing the tuition revenue that many small colleges rely on for lack of a sizable endowment. Experts say the drop off is due in part to a strong economy and low unemployment rate, and to projections of a cyclical decline among the college-age demographic. To help attract more students, the rate of tuition discounts is going up.

A 2016 report from Ernst & Young affiliate the Parthenon Group found 800 colleges vulnerable to “critical strategic challenges” due to their small size, compared to a much smaller share of colleges with enrollments over 1,000. The report lists several risk-factors for small colleges amid the current environment of consolidation in higher education. Those include: enrolling fewer than 1,000 students; the absence of online education programs; tuition increases greater than 8% and discounts higher than 35%; and depending on tuition for more than 85% of revenue.

In a review of more than 75 New England colleges enrolling more than 100 students that had annual expenses of less than $100 million in 2012 and 2016, the Boston Globe found tuition accounted for 70% or more of revenue at 63 institutions. Harvard University, by comparison, got 21% of its revenue from tuition in 2017. Small liberal arts colleges have played an important role in the region’s economy and history, the Globe notes, which is partly why their closures tend to make headlines.

Big systems consolidate, too

Just as small colleges are undergoing major consolidation, so too are some larger university systems. Among the most high profile is the set of mergers underway within the University of Wisconsin System, which will consolidate 13 two-year colleges into seven four-year colleges. It’s the system’s biggest change since it formed in 1971, according to the Wisconsin State-Journal.

The University of Georgia System has been consolidating campuses for several yearsa move to reduce operating costs and improve student outcomes. A trio of community colleges in Alabama, too, is consolidating into a single institution with a new name: Coastal Alabama Community College.

Slightly less than half of college mergers between 2010 and 2017 — roughly 40 across nine or more states — involved at least one public college, according to The Pew Charitable Trusts’ Stateline publication. Colleges face several challenges to successful mergers, however, including the potential for cultural mismatches, higher tuition from reduced local competition, and challenges reconciling salaries of two-year college employees with the often-higher rates commanded by those at four-year institutions, Stateline reported.

Consolidation between individual colleges or entire systems is most successful when it’s part of a strategic plan and not a last-ditch effort to save an institution, according to a 2017 report from the research arm of the Teachers Insurance and Annuity Association of America. The report notes potential short-term costs include updating campus buildings, marketing the change and lost efficiencies despite the move to scale, and that gains pay out over the long term.