I quote inflationary pressures and sinking entrymore universities are to be closed in 2023.
Already, Presentation College in Aberdeen, South Dakota; Cazenovia College in Cazenovia, New York; Holy Names University in Oakland, California; and Living Arts College in Raleigh, North Carolina, have announced that they will be closing after the current academic year.
The consequences of fewer students and lower tuition revenue since the start of the pandemic have been severe, according to Kristin Reynolds, partner and head of NEPC’s Endowments and Foundations practice.
“Larger institutions can weather the storm,” she said.
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The number of universities that have closed in the last 10 years has quadrupled compared to the previous decade. report in The Wall Street Journal.
Not only have many smaller institutions struggled with students choosing cheaper public schools or alternatives to a four-year study togetherbut economic uncertainty and inflation it also continues to weigh on markets, taking a significant toll on endowments and leaving more colleges and universities in financial jeopardy.
Meanwhile, the country’s most elite institutions are thriving.
College applications up 20%
Harvard University campus in Cambridge, Massachusetts.
Michael Fein | Bloomberg | Getty Images
This year, a small group of universities, including many in the Ivy League, experienced a record increase in applications.
A Common Application report found that the number of college applicants jumped 20% from the previous year, even though enrollment has stagnated nationwide, suggesting more students are applying to the same schools.
“The demand for brand name colleges is off the charts,” said Hafeez Lakhani, founder and president of Lakhani Coaching in New York. “It’s never been harder to get in.”
Most people will say, ‘is it worth it?’
founder and president of Lakhani Coaching
On the other hand, private colleges, which are less prestigious but just as expensive, have trouble attracting applicants, he added. “Most people will say, is it worth it to me?”
College is becoming a path only for the haves means pay for itother messages also show.
AND costs keep rising. Tuition and fees plus room and board for a four-year private college averaged $53,430 in the 2022-2023 school year; at four-year state public colleges, it was $23,250, according to the advice of the college.
Now, most applicants come from the wealthiest zip codes, the Common Application found.
Higher education subsidies are taking a hit
Although investment performance for college and university endowments fell overall in 2022, the losses were not spread evenly across the board, according to a separate report National Association of College and University Business Officers.
Colleges and universities with the largest endowments or assets of more than $1 billion outperformed smaller schools with less than $25 million, which were the weakest performers, with average revenues falling 11.5% compared to an average loss of 4.5 %. message found.
As a result, universities like Harvard, Yale, Stanford and Princeton are able to maintain or even expand their financial aid offerings, reducing costs and increasing appeal to more students across the country.
“The biggest foundations are able to support their schools a little bit more,” Reynolds said. “These colleges continue to attract students through scholarships, which makes them more competitive.”
That means other schools will continue to struggle, Lakhani predicted. In the future, “more universities will either close departments or close.”