The Number of Colleges Continues to Shrink

More public and private two-year and four-year colleges closed or merged between 2019-20 and 2020-21 than was true for for-profit institutions, a change from recent trends.

August 2, 2021

The days when releases of federal data on college enrollments were newsworthy have largely passed, ever since the National Student Clearinghouse began reporting much more up-to-date information and doing so on a quarterly basis.

But the U.S. Education Department’s Integrated Postsecondary Education Data System remains the best source of data on many other aspects of American higher education. And its most recent release of data shows that the higher education industry is continuing to shrink -- and that the for-profit sector is no longer the only one constricting.

The number of colleges and universities eligible to award federal financial aid fell to 6,063 in the just completed 2020-21 academic year, down from 6,145 in 2019-20 and 6,642 in 2017-18. Closures of for-profit colleges and universities (across the board, from those certificate-granting institutions to those that award bachelor's degrees) accounted for about three-quarters of the 579 institutions that disappeared over that three-year period.

But public and private nonprofit colleges and universities are not immune from seeing their numbers shrink, especially more recently.

Over all, the number of public four-year institutions has risen since 2017-18, to 773 from 760, but quite of the few of the additional institutions (the number peaked at 791 in 2019-20) are community colleges that began offering enough bachelor's degrees to qualify as four-year institutions.

The number of public four-year universities declined by 2.3 percent from 2019-20 to 2020-21, and the number of community colleges dropped by 2.7 percent in that year.

The declines in the number of public two- and four-year colleges, as well as a smaller proportional dip in the number of private nonprofit four-year colleges (0.8 percent, a decline of 13 colleges), probably reflects the slight but notable uptick in the number of closures or mergers of institutions or consolidations of multiple public institutions into a single institution, as has happened in Maine and Connecticut in recent years. Similar consolidations are under way, or under discussion, in New Hampshire, Pennsylvania and Vermont.

Mergers between two private nonprofit institutions occur more frequently but are still uncommon, given that most such combinations result in one of the colleges largely disappearing from public view. Mergers in higher education tend to look more like takeovers than anything resembling a merger of equals, and more struggling independent colleges are likely to close than to merge.

In the last few months, Northeastern University has announced plans to absorb Mills College, and Judson College, Becker College and Concordia College New York have closed.

Major ratings agencies began predicting in the middle of the last decade that the number of colleges closing would likely triple from about five or six a year (as had been the average throughout most of the 1990s and 2000s) to about 15 or 20.

The huge influx of federal recovery funds in the last 12 months, most notably the American Rescue Plan, has thrown a lifeline to the scores if not hundreds of colleges that were under financial strain before the global pandemic, which walloped many of them.

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Some experts on higher education finance expect the pace of closing or merging colleges to accelerate again as the impact of the federal stimulus funds fades.

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Doug Lederman

Doug Lederman is editor and co-founder of Inside Higher Ed. He helps lead the news organization's editorial operations, overseeing news content, opinion pieces, career advice, blogs and other features. Doug speaks widely about higher education, including on C-Span and National Public Radio and at meetings and on campuses around the country, and his work has appeared in The New York Times and USA Today, among other publications. Doug was managing editor of The Chronicle of Higher Education from 1999 to 2003. Before that, Doug had worked at The Chronicle since 1986 in a variety of roles, first as an athletics reporter and editor. He has won three National Awards for Education Reporting from the Education Writers Association, including one in 2009 for a series of Inside Higher Ed articles he co-wrote on college rankings. He began his career as a news clerk at The New York Times. He grew up in Shaker Heights, Ohio, and graduated in 1984 from Princeton University. Doug lives with his wife, Kate Scharff, in Bethesda, Md.

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