Here’s why colleges are being forced to close their doors – and what they can do to stay open – The Conversation
When Cincinnati Christian University became aware of its declining enrollment and dwindling tuition revenue in 2015, the university made a “series of bold bets” to stay afloat.
But the bold moves ended up being a series of strategic mistakes. The school started a football team, revised its mission and laid off faculty and staff to cut costs. It spent most of its US$4 million endowment but was still $6 million in debt in 2018. This fall semester will be the school’s last.
Cincinnati Christian College is one of a growing number of colleges and universities – 21 private colleges since 2016 – forced to close their doors for financial reasons. The trend has affected the public sector, too. At least 33 public colleges – including community colleges – have consolidated within their state systems or merged with other institutions since 2016.
And predictions of the future demise of other colleges abound. Harvard Business School professor Clayton Christensen has said that half of all colleges and universities will close in the next decade. While that view may be overly pessimistic, one study found that about 800 of the approximately 2,300 four-year public and nonprofit private colleges in the nation exhibited characteristics that put them at financial risk: They had fewer than 1,000 students, had no online programs, imposed annual tuition increases of at least 8% and relied on tuition for 85% or more of their revenue. They also discounted their tuition by 35% or more.