Enrollment is dwindling. Deficits are mounting. And more closures are looming: that’s the prediction of many higher-education experts, who are concerned about the future of small private colleges in America.
Elite schools are not in trouble; they can count on deep applicant pools and practically limitless resources from their endowments and alumni networks. Public college systems, though not without their own fiscal challenges, are ultimately backed by the government’s power to tax. But small mid-tier private schools tend to have modest endowments, and after decades of tuition hikes comparable to those of their elite peers, are now dangerously at risk of pricing themselves out of the market. Their problems will soon be compounded by demographic realities: the college-age population is expected to decline over the coming decades, leading to even tighter competition for students. The storm has yet to break in full, but a recent spate of closings and mergers may signal greater turbulence to come for the private nonprofit sector, whose 1,700 institutions enroll about 30 percent of all students attending four-year colleges.
The fiscal crisis of the small private college will play out in different ways across the nation. States vary in both their demographic projections and the degree to which their higher-education systems rely on private schools. Informed observers agree that more closures are on the horizon, though they debate how truly “disruptive” the shakeout will be.
But the more important question is, what kind of higher-education system do we want? One that’s composed mainly of elite schools for top students and public universities for everyone else? Or a system that offers a variety of choices, in both the public and private spheres, for all kinds of students?
Stephen Eide is a senior fellow at the Manhattan Institute.