U.S colleges and universities have recently faced challenges due to increased regulation and reduced enrollment, among several other factors. Many schools have faced closure or consolidation around the country, and the trend is expected to continue. Consolidation may contribute to saving the future of higher education.
What is consolidation?
Many schools with a low-enrollment rate and decreased funding must merge with other colleges to remain open. With school merges increasing in recent years, some institutions are implementing more degrees and certificates in the tech field such as artificial intelligence and cybersecurity. This helps create more job opportunities for students in today’s tech-centered economy. Meanwhile, online schools are targeting students who seek specialized degrees and certificates that directly relate to their careers. Online schools target adult learners who want to gain more knowledge and learn high-demand skills that will boost their career.
This leaves liberal art schools struggling to gain more students and keep their doors open, due to the focus on STEAM subjects and less cultural value being placed on the liberal arts.
Small liberal arts colleges fight to stay open
Small colleges are competing against bigger well-known schools with more funds.
Small colleges rely on tuition revenue and enrollment of each student in order to thrive. The decline is due to several factors, including the strong economy and the college-age demographic opting-out of going to school overall. As a result, smaller colleges are starting to offer a bigger break on tuition to attract and retain more students.
A 2016 report from Ernst & Young found 800 colleges are vulnerable to “critical strategic challenges” due to their small sizes and enrollments at an average of just 1000 students. This causes liberal arts colleges to face more risks, especially in our current economy.
In addition, many of these smaller schools close because they are older and have a hard time operating on a lower budget. It is difficult to fund small schools when enrollment rates are low, where every penny counts.
Although a lot of colleges face the risk of closures, if they focus on reducing tuition and managing profits efficiently, it can decrease the danger of closing.
While smaller schools are being hit the hardest, there are many non-profit colleges and universities facing fiscal challenges and consolidations as well.
Public systems consolidate
One example of public-school consolidation is the University of Wisconsin. They will be consolidating 13 two-year colleges into four-year colleges, according to the Wisconsin State-Journal. This marks the system’s biggest change since 1971.
A public university merging with two-year colleges creates easier student transitions for students. This helps decrease costs and increase transfer rates. Ultimately, this boosts enrollment in public universities.
School mergers have also increased because of the decline of high school graduates wanting to attend college. This is partially due to the 2008 economic recession: people are having fewer children to avoid being in debt and for many, school tuition is too big a burden. Others take a different route, by going to vocational school and earning certificates for a specific job.
Additionally, enrollment rates at Ivy league schools have decreased due to the overly competitive application process. Although private and Ivy league schools provide more scholarships, families look toward public schools because public in-state tuition is more affordable.
When larger institutions acquire smaller colleges, this adds more resources to operations and schools can gain steady enrollments. Although merging two schools can be difficult, it can help students stay in college and graduate.
Higher graduation rates
School mergers can be challenging to complete smoothly; however, most states take this into consideration and want to lead students on the right path.
Community colleges and four-year universities focus on different goals. Four-year colleges tend to focus on the academics, funding, and sports. Two-year colleges help steer students of all demographics towards their chosen career path with a more cost-effective approach.
When a two-year college merges with a four-year university, this can help employ more counseling staff and build stronger student support systems. Creating college programs where students can transition to a university and credits can be easily transferred will help students succeed. This type of program can also help colleges maintain a steady enrollment rate and lead to higher graduation rates.
An example of this was the merge of Georgia State University and Georgia Perimeter College. They saw more part-time students turn into full-time students and their graduation rate increased from 32 to 54 percent (2017).
School mergers can cause significant uncertainty in higher education; however, it comes with both high risk and high potential for reward.
Mergers good for the future
School mergers are not dissolving but enhancing higher education institutions.
Although schools that merge may feel ashamed the education system is going in a different direction, taking on a new approach is not necessarily bad. Consolidations will continue in higher education with many pros and cons, with cost as one of the main factors. Merging schools can be costly; however, if done effectively it can financially save the school and students (both current and future).
State schools may feel they are losing a sense of identity when merging with another college. But consolidating two schools together can create a sense of community and greatly enhance the morale and reputation of both schools. Mergers can bring more diversity, programs, and experiences to students.
Small colleges remain very dedicated to the students, community, and faculty. However, for smaller colleges that hold a lot of history of loyalty, the risk of closing is low because people are willing to put in the funds to keep the doors open.
Despite many challenges within college mergers, overall higher education will continue to evolve, and the best outcome is to implement the best tools (time, money, staff, resources, etc.) for students and the institutions to thrive.
What to look for: institutions committing to the student experience and maintaining a growth mindset.
About Dr. Donald “Doc” Hecht — Doc is an Educator, University Founder, and President Emeritus writing and discussing the trends and challenges facing higher, online, and distance education, among other topics. Please feel free to comment, make suggestions, or ask any questions! You can follow him on Facebook, Twitter, and LinkedIn.