Recently, Concordia College in Portland, Oregon announced it was closing its doors at the end of this academic year. This was shocking to many in the Portland community and beyond, and has led to probable class action litigation from students arguing they were deceived by the school that failed to warn them of the impending death of the institution.
Concordia seemingly had done all the right things. It was a small school that over the last decade introduced several popular new programs, including a law school in Boise, Idaho and a program in homeland security, leading enrollments to expand to about 7,000 students by 2014. It promoted online offerings for an adult audience. Yet it had mounting expenses, partly related to companies helping it market and promote its online programs. An Inside Higher Ed article by Rick Seltzer shows it lost an extraordinary $11 million in 2017. From 2015 to 2019, revenues fell nearly 40% as the school started facing steep enrollment declines. The Lutheran Church bailed out Concordia for several years, but finally said, in effect, enough is enough.
Concordia in Portland (as distinct from the Minnesota-based Concordia) is, of course, far from unique. Many other private colleges such as Green Mountain (Vermont), Sweet Briar (Virginia) and Hampshire (Massachusetts) have either closed or barely stayed open after announcing plans to close. Most (Sweet Briar is a partial exception) lacked a significant endowment cushion to help cushion the school from unanticipated enrollment losses.
Even more precipitous declines have occurred in the for-profit sector, where schools like the University of Phoenix used to have hundreds of thousands of enrollees, and many have gone out of business or have been drastically changed (Kaplan, for example, is now owned by public Purdue University and run as Purdue Global).
But the private schools are far from the only endangered species in higher education. Small public universities living in the shadows of more prominent (and often wealthier) state universities have been particularly vulnerable. Take the 14 schools comprising the Pennsylvania State System of Higher Education. Total enrollment in these schools dropped more than 20% from 2010 to 2019. Moreover, the drop has been highly uneven. West Chester Universitys enrollment is up, but six of the schools have had enrollment declines of 32% or more: Cheyney (the oldest historically black American college or university), Mansfield, Lock Haven, Edinboro, Clarion, and the large Indiana University of Pennsylvania, which lost nearly 4,800 students. Several of these schools are on life support or approaching intensive care. Cheyney was on probation until recently from its regional accrediting agency.
The problem is equally acute in the industrial Midwest. Southern Illinois University at Carbondale had more than 24,000 students in 1990. Now it is a shadow of its former self, with fewer than half that number of students.
As I have said before: there is a massive flight to quality in higher education. As students realize that a college degree is not a guaranteed path to vocational success, schools where students often drop out or end up getting desultory low-paying jobs are being avoided, while the selective admission schools are flourishing. Harvard, Northwestern and Stanford are not facing enrollment problems.
What is the solution? We are probably over-invested in higher education, and Schumpeterian creative destruction of schools will continue until we have fewer viable institutions and students, especially fewer ones majoring in topics that are politically correct but vocationally highly questionable: who wants to hire majors in gender studies?
Schools in serious decline face a moral dilemma. If they do not make their financial and enrollment situation transparent and clear to all applying, they could be considered guilty of deception or fraud. Yet advertising their weaknesses reduces applications even furtherhastening their demise. Thus schools in distress hype their few strengths, hide weaknesses, and perhaps desperately try new programs or features for students (Esport centers, for example).
It is no wonder that the average tenure of college presidents has fallen sharply in recent times, to under five years. Running a university in this environment of falling enrollment is tough, perhaps legitimatizing the rapid increase in salaries of top university executives observed in modern times.