Alarm bells are sounding.
As the 2024–2025 academic year kicked off last fall on college campuses across the country, 32 private colleges that existed a year ago were shuttered or operating under a different entity following mergers—nearly triple the number we typically see at that time of year in our roles as higher ed consultants. Another handful of for-profit colleges also have closed, and many public universities are shedding faculty, staff, and academic programs.
If there’s one constant we’ve heard in our discussions with hundreds of higher ed leaders, it’s that change is necessary in some shape or form. This will require action as well as effective, timely communication to all those impacted by these changes.
School closures and cutbacks wreak havoc not only on the colleges, but on the students, their families, and the cities and towns that house them. To address this unsettling trend, college leaders should consider a three-pronged approach to anticipate and manage change, regardless of whether they will be closing.
School leaders need to:
- Embrace change – It’s critical to enter into collaborations with other schools for sharing staff or developing new pedagogical approaches that fit students’ needs. Then, be diligent, transparent, and accountable with new strategies, plans, and timelines to maintain or improve institutional financial health and academic value for students. This is required even if there is no emergency need for drastic change to stay afloat one more year. Demographic and economic shifts are too significant, and may be too long lasting, to rely on the hope of a great fundraising year or the one large recruiting class to stem the tide.
- Look forward – Develop sound strategies and detailed plans, including economic/financial forecasts of five years or more that will promote long-term financial health and academic relevance and value. Identify academic programs that will distinguish your institution from the competition. Find alternative sources of revenue that will buffer the impact of immutable demographic shifts.
- Prioritize groups – It’s important to prioritize the institution’s faculty, students, and local constituencies as they consider future year operations. If a short and insurmountable runway is clearly present, it is best to begin an orderly and well-communicated process to wind down operations. This should begin four to five years from the time the school will be too cash-strapped to operate properly. Waiting until you only have enough cash left for one more payroll is not good stewardship of constituents’ lives.
Once leaders have carefully considered the intermediate-term future (at least five years out) while prioritizing the groups noted earlier, they should consider:
- Student learning and completion alternatives. Has absolutely everything possible been done to enhance learning and promote completion? The National Student Clearinghouse Research Center currently reports 36.8 million people in the U.S. spent some time in college (along with debt that sometimes accompanies the coursework) yet have no degree.1 Most people in this group never go back to complete their studies, leaving them with debt but little else to show for it.
- City/town economic impact from an eventual closure or significant contraction. In many smaller communities where the college is an economic tentpole, a significant contraction can cause serious damage to the local economy, reducing jobs and business generated by the school’s presence. It is responsible citizenship to consider the impact of a sudden closure on these small towns.
- Reputations. Individual reputations of leadership at schools that fail suddenly can be significantly damaged. Sudden failure almost always brings a sense of deep betrayal and distrust.
To address this, starting the closure process early enough to achieve an orderly and well-planned exit for the school’s many constituencies is critically important. Helping those left behind by a closure or deep cut is table stakes for good leadership. Navigating the sometimes major changes this may bring about can be complicated and disorienting to many, so good stewardship of those impacted lives is the responsible action to take.
In our work with schools of various types, we’ve seen that long-range planning and accountability systems—including detailed and candid communication with governing bodies—help ensure goals are met and sudden, major changes are unnecessary.
Simply put, timely and intentional steps are required but should not be rushed. Legendary college basketball coach John Wooden told his players, “be quick, but don’t hurry.”2 That advice applies here. We cheer on those schools that understand the barriers to change on their campus, forecast and plan well, know their academic economic margins, and manage and grow their reserves.
Colleges that address change now stand a better chance of operating into the future. If you have any questions or need assistance, please reach out to a professional at Forvis Mazars.
Rachel Pauletti and Nick Wallace are members of the Higher Ed Consulting group at Forvis Mazars.