Photo (cc) by Boston Public Library
Virginia’s Sweet Briar College has been making headlines for its announcement that the private women’s school will shut down at the end of the year. But it’s not the first and probably won’t be the last.
A study by researchers from Vanderbilt University, a private nonprofit school in Tennessee, states that an average of five private nonprofit colleges and universities closed every year between 2003 and 2013.
Now MarketWatch reports that more closures might be on the way:
The trend is likely to accelerate in the coming years, as colleges cope with lower tuition revenue due in part to lackluster enrollment, student worries about employment prospects and being saddled with debt after graduation.
“We expect that there will be more college closures over the next three to four years,” Susan Fitzgerald, a senior vice president at Moody’s. “I don’t think it’s going to be a landslide of college closures, but we are coming through a very tough period of time.”
Moody’s expects both public and private universities to experience the slowest net tuition revenue growth in more than a decade this fiscal year, MarketWatch states. Part of the problem is that they have had to expand tuition discounts to attract more students, which is hard to sustain over time. As MarketWatch reports:
Sweet Briar’s interim president, James F. Jones Jr., called an uptick in the school’s aid dollars as a share of tuition and fees — known as the tuition discount rate — “financially unsustainable” in a statement announcing the school’s closing.
Nonprofit colleges are not the only ones struggling to attract or retain students, though.
CNN Money reports that enrollment at Phoenix University, the country’s largest for-profit university, has dropped from around 460,000 students to 213,000 students over the past five years. That’s a loss of more than 50 percent.
In 2012, the university closed 115 campuses. In recent years, one of the University of Phoenix’s major competitors, Corinthian Colleges, closed down entirely.
CNN summarized the problem for such schools:
Once a cash cow industry, for-profit education companies have struggled to overcome criticism of the quality of its education and the costs. They’re the sore spot in the national debate about value of higher education.
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