The announced closure of Lincoln College is an example of a challenging time in higher education, says the president of Illinois Wesleyan University in Bloomington.
Georgia Nugent used to work at the Council of Independent Colleges, a group of about 700 mostly smaller and liberal arts institutions that has tracked a half century of issues facing largely private liberal arts colleges.
The Illinois Board of Higher Education (IBHE) has worked on the closure or consolidation of 60 colleges since 2016. Nugent said that number is significant, but perhaps misleading.
“Actually, it's not that shocking. This has been a pattern for a long time. And colleges open every year, as well,” Nugent said on WGLT's Sound Ideas.
That data does not include some of the pandemic period and Nugent acknowledged that may have weakened some institutions that already were at risk, such as Lincoln College that is scheduled to close on May 13.
Financial reserves are one key measure of college stress.
"A school with a relatively healthy or large endowment can draw on that to perhaps find ways they can ultimately become more profitable or sustainable. Certainly, if you are under about $100 million, you haven't got much runway there," said Nugent.
She also noted some areas of the country have had more college closures than others, and those correlate to broader population trends, based on data from the national clearinghouse.
“The most in any state was about nine. Illinois, interestingly, is right up there with about six closures in recent years. But if we look across the whole country, there are 17 states that have had no closures whatsoever,” said Nugent.
The Midwest and northeast in general have had more college closures than other parts of the country, particularly the south and southwest where the population is growing more rapidly, she said.
And enrollment is a big part of a college's destiny.
"There was a study that showed if a college fell below about 1,600, they were in greater danger of closing. You have economies of scale," said Nugent.
Particularly at risk may be so-called micro-colleges that have specialty enrollments, she said. Some of those are very small indeed, some even fewer than 500 students.
“Some of them had niches that kept them afloat for a while. For example, there was a college devoted entirely to environmental studies in Vermont. That was doing well for a while because there was a great deal of interest among young people. In Illinois, we saw the same thing with Shimer, the great books college that was absorbed by North Central,” said Nugent.
And the so-called enrollment cliff, expected to continue until at least 2029, indicates a lower number of high school graduates that began in 2007 will continue, putting more pressure on small institutions. Many of those schools are in smaller communities without a huge population base. And since a majority of high school graduates go to college within an hour’s drive of their family home, this could increase pressure on those smaller institutions.
The impact of a subsidiary trend on the viability of colleges is more ambiguous, said Nugent. The population of high school graduates is becoming less white. This is the first year a majority of high school grads will be non-white. Various experts suggest the share of white high school graduates will fall to 42% by the year 2036.
Traditionally, smaller portions of Black and Hispanic students go to college than do whites. If that continues, it will make the enrollment cliff steeper for colleges. Nugent said that is unclear. There is a race-based disparity in the perception of higher education found in a study by the Pew Research center.
"The white respondents to that survey were kind of lukewarm about the value of a college education. The Black and Hispanic parents rated much higher the value of that education," said Nugent. "I think what we are seeing is perhaps a kind of complacency in the population that has always had access and a real understanding by the population that has had less access, that it's valuable to go to college," said Nugent.
There is a potential in the data to cushion the demographic enrollment hit if the sentiment about value causes the share of under-represented groups going to college to grow.
Access remains uneven, though. Nugent said there have been increases in the number of Black women going to college, but decreases in the number of Black men entering higher education.
“I would guess that we are going to see some more closures. One thing that has certainly increased in recent years is mergers where one college is taken over by another, some of them quite surprising,” said Nugent. “For example, there is a small California college, Mills, which is merging with Northeastern in Boston.
More often, a larger college in a region absorbs a smaller one in the same region. That helps save on administrative costs, but if the bigger institution maintains the geographic footprint of the smaller partner in the merger, infrastructure costs might not decline that much. She said some of those mergers have been around for about five years and that’s not enough time to establish a track record on the issue of campus footprint costs.
“I think we are in a very fluid moment in higher education. And I think what none of us can predict with clarity yet is how the pivoting to online education that virtually everyone did. How that's going to affect the long term,” said Nugent.
She said online learning may mean the landscape ends up being more of a transformation than a consolidation.
“We're seeing in our student population that many of them want to be on campus in a residential institution, but at the same time, they love the flexibility that came with online learning. So, I think what we're going to see is just a change in the delivery of education, in colleges that remain open and remain residential."
Nugent also expects more just-in-time education and more adult education offered as corporations like Starbucks, Walmart, etc. want to send employees back to school.
“More and more of them are doing it. The incredible example there is Southern New Hampshire University, which was a small regional university. It developed a separate arm, which offers online education, and it now enrolls hundreds of thousands of students around the world. Arizona State does the same thing. I think many more players are going to get into that space,” said Nugent.
She said that is effectively a new line of business for some institutions, and if they can balance the new and the traditional in an appropriate way, it can be a "very strong path toward the future."
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