Preventing College and University Closures:

How mergers, alliances, and acquisitions can solve higher ed sustainability issues

Table of Contents

Preventing College and University Closures

As the COVID pandemic swept the globe, colleges and universities have been in a rush to transform to stay financially stable. This was written before the COVID crisis but the information is now even more critical for preventing college and university closures.

Another is on the verge of biting the dust. Hampshire College, an interesting experiment in liberal arts education, has stated that it needs to raise up to $20 million in the next year and about $100 million in the next 5-6 years to stay afloat and independent. This situation, brought on in part by a vote by its board to remain independent instead of pursuing a merger with the UMass system, led to the resignation of its board chair and president.

And just to be “piling on,” the New England Commission of Higher Education is now questioning if Hampshire College should retain its accreditation in light of its finances and leadership turnover. The commission is requesting the college to appear at a hearing this month.

Hampshire College’s woes are just the latest among colleges and universities forced to close or merge. All total, there have been over 180 closures and/or mergers – including Green Mountain College, the College of St. Joseph, Hiwassee College, Southern Vermont College, and Newbury College — in the last three years.

Furthermore, the pace of these closures and mergers seems to be accelerating. According to the Chronicle of Higher Education, over 1,230 campuses have closed in the past five years, impacting about half a million students. Of these, 88% were operated by for-profit colleges, displacing roughly 450,000 students. These closures disproportionately affect older and minority students.

Whether you attribute these to for-profit or nonprofits, the basic question remains: Why are we seeing so many closures and mergers? How can we start preventing university closures? Is it poor management and/or governance, market saturation, something else, or a combination? Are the demands of running an “education business” too demanding? Are leaders not up to the task? I submit it’s all the above, but more importantly, at the core is the fact that the higher ed business model has changed and continues to evolve. Meanwhile, most institutions have not kept up and some are just now realizing that these changes are taking place.

What’s Changed in Higher Education?

In the past, counselors and parents pushed high school students to go to college.  The belief was that if you went to college, you would get ahead (or at least do better than your parents did). Now, when you take a look at the various demographic groups that are out there, you see there are three demographic groups attending college, each with its own purpose.

First, the “traditional” student. S/he is 18-24 years old, recently graduated from high school, and preparing for their career in the “traditional” way.

Second, the “post-traditional” student.  This student is 24-70 years old and is going back to school for one of three reasons: (1) they need a job;  (2) they want a promotion; or (3) they want more money. These students have different needs than traditionals – they frequently are working, have families, and need flexibility in pursuing their education.

And, this demographic now makes up 74 percent of current students.

Lastly, the business community.  Corporate education – training-specific skills needed by businesses – is providing another opportunity for higher ed.  Corporations and other employers need training programs for their employees and are sending them back to school for specific skills and education in the form of stackable certificates and badges that can lead to a degree.

Let’s take a look at these three demographics/purposes, and what it means for higher ed going forward.

Educating Undergraduates for Work and Life

One of higher education’s primary jobs is educating students for the workforce as well as for life. Unfortunately, many are not doing a good job of either. Higher education leaders and faculty who remain in higher education’s Ivy Tower often find it difficult to see what is happening in today’s rapidly changing economy, leading to outdated programs and students who are unable to succeed in the workplace.

However, the safety of the ivory towers is only an illusion since higher education is under attack from policymakers, the media, and the general public. This leads to lower confidence, which leads to drops in funding, enrollment, and support. As we noted earlier, that attack is causing many institutions to crumble. Therefore, it’s up to higher education leaders to find a resilient way to help their institutions navigate this minefield of change.

The key to this navigation is ensuring that the institution’s curriculum is in sync with what employers need AND prepares students for life. That sounds like a no-brainer, but it’s surprising how many graduates find they are under-prepared for entering the workforce. And businesses that are hiring your graduates are noticing.

To change this, higher education leaders need to give voice to regional businesses and corporations when planning curriculum. Faculty often have an insular vision of what should be taught in the classroom, a view which is based on their research interests and limited exposure to potential employers. Therefore, it’s important to involve employers in advisory groups as well as in classrooms as speakers and mentors. This interaction will provide college leaders and faculty with different opinions and valuable insights about what students need to learn.

For instance, these external stakeholders may suggest really important curriculum changes, such as the addition of a statistics class to help students understand how to interpret data or using a different technology that is emerging in the marketplace.

One school that is an excellent example of this is the International Technological University. Located in San Jose, CA, in the heart of Silicon Valley, ITU provides some of the most up-to-date technology education available because the institution’s faculty are working on the development of some of the top projects in the Valley. This is a great example of how a university can stay up to date with what is going on in their field and ensure their programs are cutting edge.

Community colleges and regional universities have a place in this mix. These institutions can work with K-12 schools by creating early college programs. Cal State San Marcos is an excellent example of how they use articulation agreements with high schools to drive enrollment, especially in the first-generation college student demographic.

Community colleges also can serve an important role in backfilling knowledge and skills gaps from K-12 education. Community college programs can be offered at low costs, enabling students to avoid taking on student loan debt before heading to a college or university. Finally, these institutions can offer apprentice programs that provide students who are not college-bound with another avenue to prepare for a well-paying job.

Universities should also be preparing students for life by teaching soft skills. This point was well-articulated in a 2019 Harvard Business Review article by Thomas Chamorro-Premuzic and Becky Frankiewicz: “….universities could substantially increase the value of the college degree if they spent more time teaching their students’ critical soft skills.

Recruiters and employers are unlikely to be impressed by candidates unless they can demonstrate a certain degree of people skills. This is perhaps one of the biggest differences between what universities and employers look for in applicants. While employers want candidates with higher levels of EQ, resilience, empathy, and integrity, those rarely attribute that universities nurture or select for in admissions.

As the impact of AI and disruptive technology grows, candidates who can perform tasks that machines cannot are becoming more valuable — and that underscores the growing importance of soft skills, which are hard for machines to emulate.”

Finally, leadership skills also should be an integral part of students’ experiences. Perhaps one of the best examples in the nation is happening at Texas A&M, which flips the model and puts students into leadership positions for student activities. Texas A&M’s former students are known for moving into leadership roles exceptionally quickly in their careers.

By honing their focus on the knowledge and skills that students will need in the workplace, higher education leaders can build their market share. Employers will serve as ambassadors for the institution, telling others about the quality of your programs. That will create a group of stakeholders who feel that they want the institution to continue to succeed – and will provide feedback (and possibly funding) to help make that happen.

Educating Nontraditional Students

Many higher education institutions are used to focusing their offerings on 18-year-olds who are fresh out of college. However, increasingly enrolling students are older individuals who are returning to school to increase their job prospects, either by making more money, getting a promotion, or changing careers.

According to the College Board, 74 percent of all undergraduate students are made up of what now is called post-traditional students – students who do not study full-time during the day and are not in residence. The remaining 26 percent are traditional students, those who study full-time and are in residence. Of this 74 percent, 19-20 percent of students study full-time online, while the other 50+ percent are individuals who do blended programs, i.e., some classes on campus.

These students see higher education differently from the traditional 18-to-24-year-old student. They want convenience and compressed timelines for course completion. In addition, they will be vocal critics if forced to take “fluff” courses or if they have unresponsive faculty members. They also will look for online coursework that allows them to fit school into their life, which also includes career and family considerations.

Corporate Education

Another emerging role that higher education institutions can increasingly play is working with corporations to create training programs that award certificates and badges.

Arizona State University is one of the leaders in this area. ASU has just announced a for-profit venture designed to increase corporate partnerships. The institution already works with Starbucks and Uber to develop online courses for these companies’ workers.

These types of partnerships offer a growing avenue for higher education to increase their programmatic offerings as well as coffers.
Many universities have done this in the past through their “extended education” or “adult education” programs, but this is a HUGE source of revenue if higher ed institutions can embrace this type of program and create partnerships with businesses that provide what they need.

Wrapping Up

So, is the massive closing of universities and campuses inevitable? Can we begin preventing college and university closures? The short answer is no, it is not, but it is going to require a significant rethinking of what you are doing at your institution to make it something that is more viable in today’s rapidly changing marketplace.

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