Annual college closures may increase as enrollment at higher education institutions continues to decline, according to a Federal Reserve Bank of Philadelphia report.
If enrollment at universities continues its downward trend, as many as 80 additional colleges may be forced to shut down, according to a December report published by the Federal Reserve Bank of Philadelphia. Recent data shows freshman college enrollment has reached its lowest point since the pandemic, declining by over 5%.
Even if enrollment declines at a steady, slow pace, nearly five more colleges may close every year as a result, the report says. Total enrollment at colleges and universities has already fallen by 15% from 2010 to 2021.
Students walk near Hamilton Hall inside Columbia University in New York City on May 6, 2024. (Photo by CHARLY TRIBALLEAU/AFP via Getty Images)
“These simulations point to the precarious potential situation facing postsecondary education in the coming years, especially if the demographic cliff materializes in a moderate to severe fashion,” the report states. “While some of these estimated increases might seem small at the national level, they would be significant for the handful of localities predicted to experience college closures in a given year.”
The total number of higher education institutions has already declined by 2% from the previous academic year as of August, according to the National Center for Education Statistics.
Several factors are impacting students’ decision to opt out of higher education, though tensions on college campuses arising from continuous protests since the beginning of the Israel-Hamas War may have made universities less desirable. Many high school graduates are instead choosing short-term certificate training programs over traditional degrees. (RELATED: Americans Are Turning Away From Higher Education)
Universities have also been facing backlash for their apparent lack of response to, and sometimes blatant encouragement of, campus protests, leading to financial difficulties after several major donors ended their support of the institutions.
Meanwhile, the number of students enrolled at vocational schools rose 16% in 2023, and those training to become construction workers increased by 23%, according to The Wall Street Journal.
The report also points to a declining number of high school graduates as a possible reason for low college enrollment.
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