Small private colleges face a looming enrollment cliff

Even schools on solid ground have had to offer more scholarships to attract students, including those from middle-class or affluent families. Nationally, the tuition discount rate for full-time freshmen for the 2021-2022 school year was nearly 55%, according to the National Association of College & University Business Officers.

“That’s no way to run a business,” says Georgia Nugent, president of Illinois Wesleyan University in Bloomington. Families negotiate with schools to get the best deal. “It’s like used car sales,” she says.

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With these pressures, colleges are looking for the creative solutions they need to survive and thrive. Some seek to merge back-office operations, saving money without sacrificing school identity and traditions. Many are adding to or expanding adult degree and certificate programs, especially in disciplines where they can differentiate offerings.

Wheaton College, a Christian liberal arts school, added a certificate program that trains for leadership in humanitarian disasters. Other schools share teachers, especially in foreign languages, and join consortia to offer students access to a wider range of courses. And partnerships with companies, especially resource-rich technology companies, are expected.

Mergers and closures have been slower to develop than some people predicted, says Wheaton College President Philip Ryken. But there is more talk of mergers at national gatherings of college presidents. “Seven years ago there were maybe a handful of people interested in the subject of mergers,” he says. “Now it’s a room full of people who are more actively thinking about it.”

Changing demographics

A 2020 study by the Hechinger Report, a nonprofit that covers issues of inequality and innovation in education, found that more than 500 colleges and universities are showing financial warning signs, and 10% of them are in Illinois and Ohio. Illinois had 26 schools with two or more warning signs, and Ohio had 36.

Schools in Illinois and Ohio are stressed because there are so many, says Rebecca Sherrick, president of Aurora University. Many were founded during the western migration of the 19th century. “A lot of religious denominations competed to establish schools,” she says. “If there was a Methodist college, you can be sure there was a Presbyterian college and a Congregational college.”

In recent years, the demographics have shifted, with the shrinking of the predominantly white 18- to 22-year-old student that colleges have targeted for so long, Applegate says. Families from the Midwest and Northeast, where there are the most colleges, migrate to the South and West, where there are far fewer universities.

Whether it’s because of the pandemic, high prices, or the ease of landing a full-time job, the number of students entering college directly from high school has dropped nearly 22% in 2020 compared to the previous year, according to the National Student Clearinghouse.

Meanwhile, employers have reassessed their hiring criteria for the first time.

Beginning in 2015, Aon, Accenture, and Zurich American Insurance established an apprenticeship program that provides jobs and benefits to community college students with a pathway to permanent full-time positions. The Chicago network has grown to more than 75 area employers.

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