Speaker 1: Picture this. You are an 18-year-old college freshman out navigating the world for the first time. Your weeks are filled with classes, studying, dorm food, annoying roommates, and your weekends, well, it's college. Your first steps into adulthood, independence, the whole world is ahead of you. Then it's all over. One day someone walks into class and tells you, we're so sorry, but your school is

Speaker 2: closing. You know, Laker was honestly the perfect fit for me. I wanted to learn more, wanted to be outside more, wanted to do more just for myself, wanted to create more. I'd say college just was kind of a family away from family, but I definitely had to learn things, be knowledgeable, you know, and that was honestly the fun part. If I would have went to a big university, oof, oof, I don't think I would have lasted, I'll be honest. I think the small settings and all that kind of

Speaker 1: was a good fit for me. In 2022, Lincoln College, a predominantly black private college in central Illinois, shut its doors for good, graduating its last class following a post-COVID drop in enrollment and a ransomware attack the small school just couldn't bounce back from. We thought Lincoln had the money. I'm

Speaker 2: gonna be truthful. We thought Lincoln was a well-funded school. I'm very emotional. It was very emotional. I just lost a lot of faith. I was very lost. I was very lost

Speaker 1: after Lincoln closed. This is happening more and more across America. The pace of college closures has picked up since the COVID-19 pandemic and could get even worse. Here's why. Lincoln College is one of 91 U.S. private nonprofit colleges that have shut down or merged with another school since 2016, affecting more than 60,000 students just like D'Sergeon. This is part of a larger trend that's been picking up since the mid-20-teens with private schools leading public schools on annual closures. That's not including private for-profit schools, which made up more than 80 percent of college closures from 2004 to 2020. That's an entirely different issue. For now, let's focus on nonprofit colleges and universities. Of those 91 schools, half of them closed during or after 2020 and a whopping 68 percent of them closed because of financial reasons, with one consistent issue popping up. Enrollment.

Speaker 3: There are two significant issues that are affecting higher education right now, specifically through the admission and enrollment offices. Number one, it is the admission cliff and that is the impending decline. We'll be graduating our lowest high school classes by population in 2025. And most enrollment professionals have been wringing their hands about this date of 2025. But many schools have seen those enrollment declines already with the downturn in the economy that happened in 2007, 2008. There were simply less people born, but they were born and they were less people born specifically in different regions of the country, the Northeast, the Middle Atlantic states and the Midwestern states. Right now, the majority of brick and mortar colleges and universities are in those places, but the population of students are no longer there. So admission teams have to think about enrollment by strategy. Ninety five percent of the majority of four year colleges in the country, particularly private schools, but many public schools as well, are 95 percent tuition driven. So the idea of enrollment. Driving finances and financial health of those schools is it is a given for most colleges and universities. So take one of those away. Then, you know, take away the idea of enrollment being a given. Then finances at that particular school are called into question. And then the end result of that is we see some some schools closing, particularly private schools.

Speaker 1: 2023 added a new layer of financial stress for already struggling schools, the removal of federal stimulus money in the original wave of pandemic stimulus bills. Congress passed 14 billion dollars in relief funds for colleges and universities in what was called the Higher Education Emergency Relief Fund. Those grants must be spent by mid 2023.

Speaker 4: Things are getting more and more challenging as the year progresses in terms of enrollment, in terms of operating performance, including the inflationary environment, labor market, you name it. It's a reflection of, I think, an unsustainable operating platform, meaning a heavy reliance on tuition, which can't always keep up with inflation. It can't always keep up with erosion in enrollment, can't keep hiking tuition sticker price in the hopes that the net residual, once you account for scholarship and discounting and and the like, is going to be enough to sort of offset your your growing expense base. And so I think it's that's the internal piece that in many cases is unsustainable.

Speaker 5: When I initially looked at it, the appeal of a small Christian liberal arts college in New York City was really high for me.

Speaker 6: I got a chance to visit New York City and King's the summer before my junior year of high school, and I fell in love with both the city and the school and had it be my top school of choice.

Speaker 5: Getting the quintessential New York college experience has also been incredibly fulfilling in the past two years as well, whether it's going to Central Park on the weekends or finding that one really good local coffee shop to be my go to study spot.

Speaker 1: Remember those numbers we showed you earlier? More than three dozen schools have shut their doors, merged or announced plans to close since the pandemic. Twenty of those schools were religious institutions. Since 2016, 44 percent of college closures have been religious schools. While many were already struggling before 2020, COVID was the final push for many religious schools in financial trouble.

Speaker 5: I had a little bit of a unconventional way of realizing because I was on the editorial team of our independent student newspaper. A couple of stories started breaking where, for lack of a better idiom, I smelled blood in the water.

Speaker 1: The King's College, a private Christian college in the heart of New York City, is yet another private school plagued with financial issues, enrollment declines and bad business dealings that left it on the brink of closure. Last fall, the school started what it called right-sizing, laying off staff, closing down the student union and selling off office spaces.

Speaker 5: And it was stories like our singular on-campus property being put up for sale. It was a on-campus housing location in the financial district that I was slated to live in that next school year.

Speaker 1: Then in the spring of 2023, the school announced it would need $2.6 million to make it to the end of the semester. And then it gave a solemn warning to students, start looking for somewhere

Speaker 5: else to go to school. It was approaching spring break by that point. And we already knew that the school was in trouble. So the next question was, what do we do in case it closes? And those program meetings, which were for the individual majors, was when faculty members and our academic advisors came in and gave the list of possible transfer schools. My response was definitely disappointment in how the leadership and administration of the school failed us. As students, as staff, as faculty, we as students all know our staff and faculty on a very personal level. So conversations in the classroom were fraught with emotion on all sides, especially as the semester continued on. And it definitely marked that experience of that semester in a pretty significant way.

Speaker 7: Across the board, students who are experiencing a closure tend to have poorer outcomes in re-enrolling and also completing their credential.

Speaker 1: Studies on the impact of college closures on students found that only 47 percent of students re-enroll in another post-secondary program after experiencing a college closure. Of those who are re-enrolled, they were more likely to be white women between the ages of 18 and 24. And only about one third of re-enrolled students actually end up finishing their degree. The students who re-enrolled one to four months after closure were the most likely to get a degree, with 47 percent of that group finishing their new program. Students who waited longer than a year to re-enroll only had an 18 percent chance of completing their degrees. On average, for-profit students who experienced a closure had significantly worse outcomes than nonprofit closures. But again, that's an entirely different issue. And it's worth mentioning that this isn't an issue that is impacting all

Speaker 8: private schools equally. A number of record applications applied for spots this year. Yale and Brown also got record numbers of apps and marked record low acceptance rates. And it's not just Ivy League schools. Many colleges and universities across the country inundated with

Speaker 4: applications. We've spoken a lot about this is the bifurcation of the sector, the weak getting weaker, the strong getting stronger.

Speaker 1: To put it plainly, the top schools like the Ivy League and big state schools are bringing in more money, more applicants and larger endowments than ever before, pulling those dwindling student numbers away from smaller schools that struggle to compete.

Speaker 7: There's going to be a real challenge for institutions who are not elite and probably don't have large market share for football or basketball teams that they can rely on to help boost recruiting.

Speaker 4: The question is who will who will survive through the through the bottom? And and as as usual, a smaller enrollment base, a operationally challenged sort of platform, heavy reliance on one revenue, one or two revenue sources, tuition and, you know, maybe room and board and student fees. All of those things make weathering that more challenging. And so the burden has tended and continues to fall more heavily on

Speaker 1: those institutions. There's also something else that's happened in the past few years, something that may explain why top tier private schools are seeing record application numbers, test scores or rather a lack of

Speaker 3: test scores. Three thousand plus four year colleges across the states alone became test optional, simply meaning that that students needed to submit the SAT or the ACT for academic admission. It doesn't prohibit them from submitting them, and many students will still submit the SAT, ACT, AP exams and so on because so many schools are test optional. And some of the most competitive schools in the land are continue to be test optional, at least temporarily. Then we see surges in their application polls over the last three years of time. That has made this phenomenon has made those schools, many of the perceptual best schools in the country, at least by way of reputation and brand, have seen ballooning application numbers.

Speaker 1: The King's College told students they would have an answer for them by May 31st, the week before it had been announced that school's accreditation

Speaker 6: was revoked. My initial reaction was not again, because this is what's been happening the entire semester. We were first told, oh, we'll know by the beginning of March. Then we were told, oh, we'll know by spring break. Then we were told, oh, we'll know by the end of March. Then we were told, oh, we'll know before graduation.

Speaker 4: It's a challenging environment out there for higher ed, and it's not going to get, we think, any easier as the year goes on. Although there have been some near term signs that inflation is easing. The question is, will that be enough to sort of hold universities whole as they progress into a very uncertain fall semester? But what I would look for is philanthropy over time. And that's usually something that is well advertised and a good indication of alumni engagement, alumni success, but also just enrollment. Look at the enrollment trend, particularly if you're waffling between a few schools. That's a good indicator of just what the trajectory is. And as we know now as graduates, the student experience is definitely a key part of, and I think a primary reason why people pick one school over another is how you feel on campus.

Speaker 3: Look at those enrollment trends over time and a significant amount of time over the last 10 plus years of time. Are those students getting jobs of substance upon graduation? If you can't, if a student, prospective student, cannot answer those questions definitively and clearly during the search process undergrad or graduate school, then it would give me pause.

Speaker 7: It's very difficult to predict which institutions are going to close because some institutions may look like they're on the brink, but they survive because they're actually very efficient at what they do and they can survive by cutting costs here, getting some donations from a wealthy donor, and they survive and even thrive in some instances. Others who appear relatively fine at one year might go through a rough patch where they all of a sudden just like decline, have poor leadership, and all of a sudden their decisions that they were making are no longer mission driven and strategic.

Speaker 1: Many of these schools give students enough time to make a plan, offering teach out plans, partnering with neighboring schools to transfer students to similar programs, or in some cases, moving whole departments to other universities. But according to the state Higher Education Executive Officers Association, the best tool a closing college can give a student is

Speaker 7: time. The longer runway institutions can provide, and this kind of comes back to institutions making sure that they're making the best decision for the institution, but also for the students that are enrolling. And the longer they can give notice about a closure, if it does come to that, the better. And the more they can do to help students with the teach out and transfer is going to improve student outcomes as much as possible given the complete disruption that's going to happen during students' educational careers.

Speaker 1: So that begs the question, if you could go back and do it all over again, would you choose differently?

Speaker 6: I wouldn't give up what I received here for the world. The friendships that I've built, the faculty and professors that I've gotten to know, the education that I received here, and the opportunities that have been opened by me coming to New York City. And even with all of the uncertainty of this semester or not knowing if I'll be able to finish next year or not, what I benefited from and what I was blessed by through the two years that I have spent in New York and that I have spent at King's is something that I wouldn't give up or change for anything.

Speaker 2: We have did trips to just go see Lincoln and see what it is now. It's a desert. I'm gonna be honest, there's nothing there except the buildings. I think honestly, like, just the family that I have made there, we will make time for each other. We will make time to see each other. Sixth Flag trip this summer, things of that sort. The family that I have made, I will say that we are sticking together. Yeah, I would never change that. I would never change that.

Speaker 6: It's been really cool to see the community come together in a way that it hadn't previously, specifically praying for the college's future, whether it remains open or not, just that everybody who's in the college and is involved in it, staff, faculty, students, parents, just receive the wisdom and direction needed for whatever comes next. And seeing all of the efforts in coming together as a community is something that's been incredibly heartening and encouraging, even in the midst of all of the uncertainty.