(Bloomberg Opinion) — Higher education in the U.S. has been heading for a shakeout for a long time, and now it has come. Universities are facing a big, long-lasting funding crunch as demand for undergraduate education looks unlikely to return to pre-pandemic levels anytime soon. That means schools need to find new ways to pay their bills or risk going under.
At the beginning of the pandemic, there were many predictions of economic doom that happily failed to materialize, thanks in large part to ambitious government relief efforts. Unfortunately, the devastation of the higher education sector seems to be one prophecy that is coming true.
In 2020, employment in the higher-education sector fell by 650,000 — a decline of more than 13%. Nor is relief on the horizon; spring numbers show enrollment is not yet bouncing back from the declines suffered during the pandemic. Undergrad numbers are down 4.9% from last year. All sectors have been affected, but public 2-year colleges have been hit hardest:
And this merely exacerbates a trend of flat or declining enrollment that was firmly in place years before the pandemic. In the last five years, more than 50 colleges have closed down or merged. Probably the most high-profile institution to succumb recently was Mills College in California.