Will 80 colleges of America be closed in 5 years? Threat looms on US education sector

American universities closed: A large number of students are taking admission to study in institutions like the top universities included in the Ivy League of America. On the other hand, small colleges and universities of the country seem to be standing on the verge of closure. The Federal Reserve Bank of Philadelphia has released a report. It warns that 80 colleges in America may close in the next five years. It tells about the changing demography, economic pressure and value of education in the country.
‘Demographic cliff’ has been mentioned in the Reserve Bank report. This means a sharp decline in the number of college-age students. This decline is going to increase further in the coming years. If this happens, a large number of colleges will be closed. The report states that in the worst case scenario, 80 colleges are likely to be closed every year. Even if the situation improves a little and there is a slight decline in admissions, still 8.1% of colleges may close every year.

Declining admissions

Admissions to American colleges have already been declining for several years. Tuition fees are rising and questions are being raised about the value of a degree. The report states that there may be a 15% decline in admissions between 2025 and 2029. The main reasons for this are demographic changes and economic pressure. On one hand, big universities are flourishing, while on the other hand, small colleges with less resources are facing these challenges.

Financial crisis is the main reason for college closure

It has been said in the report that the main reason for the closure of colleges is their financial crisis. Many colleges are running in losses. They do not have enough money to cover rising expenses. The report analyzed data from 2002 to 2023, which showed that 84 of the 100 most at-risk colleges closed within three years. The main reasons for their closure were low salary, less money received and excessive dependence on fees. The small number of students added to the problem.

Which colleges are most at risk of closure?

There are certain types of colleges in America which are at the highest risk of closure. Historically Black Colleges and Universities (HBCUs) and women’s colleges are most at risk of closing. There are less number of endowments here and the number of students applying to study here is also less. On the contrary, the colleges located in the city get more advantage due to their location, because a large number of students apply to study in them.