Up to 80 U.S. colleges are predicted to close by 2029, driven by financial difficulties, declining enrollment, and rising tuition costs.
These challenges reflect the growing pressures on higher education institutions across the country.
Research from the Federal Reserve Bank of Philadelphia, cited by Fast Company, suggests that 80 colleges and universities may shut down in the next five years.
The study, which analyzed data from 2002 to 2023 using machine learning, found that 84 out of 100 colleges studied had closed within three years.
This pattern is linked to a projected 15% decline in enrollment between 2025 and 2029, which is exacerbated by rising tuition costs and increasing doubts about the value of a U.S. degree. For international students, this could mean fewer options for study abroad and potential disruptions in their educational journeys, as smaller or financially unstable institutions close their doors.
Rising tuition fees are already a significant barrier for international students, and closures of institutions may reduce the availability of affordable options for those seeking U.S. education. Additionally, students from overseas often face longer visa processes and other logistical hurdles, which could further complicate their ability to secure spots at remaining institutions.
Financial strain and declining enrollment
According to reports, the financial strain facing many colleges is a result of declining student enrollment, especially in small private institutions.
- The high cost of tuition has caused students to question whether a degree is worth the expense.
- According to CNBC, around two dozen colleges closed this year, and more are expected to close in 2025. Additionally, a report from Best Colleges found that 40 colleges have shut their doors since 2020, the year the pandemic began, with others merging to survive.
According to Fast Company, the COVID-19 pandemic exacerbated these challenges, forcing many colleges to shut temporarily and causing lasting financial issues that they were unable to recover from.
The impact of rising tuition costs
Tuition costs have risen significantly in recent years, with some colleges charging nearly six figures per year.
This steep price is pushing students from lower-income families to seek more affordable options, such as public universities or four-year trade schools.
According to reports, the rising costs have become a barrier for many families, especially as students question whether the return on investment is worth the price of admission.
Elite institutions see growth in applications
While many colleges are facing closures, reports inform that elite universities like the Ivy League schools and Ivy-Plus institutions such as Stanford, MIT, and Duke are experiencing a surge in applications.
These schools are seeing record numbers of applicants, with applications for the 2024-25 academic year up 10% from the previous year, according to the Common Application.
Increasing financial aid at elite schools
To address the financial challenges students face, many Ivy League and elite schools have increased their financial aid offerings.
- These institutions are providing full tuition to many students from lower-income families, making their high tuition fees more accessible.
- For example, schools like New York University, Tufts, and Brown charge over $90,000 for the 2024-25 academic year but are offering more financial support to attract talented students.
- Research from the National Bureau of Economic Research found that children from the top 1% of income earners are more than twice as likely to attend an Ivy-Plus school as those from middle-class families with similar academic qualifications.
- This trend highlights the role that financial aid programs play in helping students access higher education, even at the most expensive institutions.
As college closures continue and the cost of higher education rises, many students are reconsidering their options. While some schools struggle with enrollment and finances, elite institutions are adapting by providing more financial aid to ensure they remain accessible to a diverse group of students.
