Colleges and universities across the country, both public and private, are facing financial challenges ahead of the upcoming academic year, regardless of their size, wealth, and prestige.
Layoffs or hiring and wage freezes were recently announced at Cornell, Temple, Northwestern, Duke, Notre Dame, and Emory; the university systems in California, Maryland, and Nebraska; and the University of Kansas, according to their respective websites.
Tuition hikes, meanwhile, are planned for this fall at public universities in Alabama, Illinois, Minnesota, Montana, Oklahoma, and Oregon, in addition to several private schools, including Brigham Young, Stanford, Marquette, Georgetown, and most of the Ivy League institutions, their leaders announced in recent weeks.
Pennsylvania university system trustees announced on May 22 that seven campuses will close within two years, and five more are on track to eventually shut down if enrollment does not increase. Ten of the campuses reviewed had maintained courses with fewer than seven students, and nine campuses had fewer than 660 students. Collectively, the dozen campuses tallied a $29 million operating deficit in 2024.
With fewer prospective students because of the post-Great Recession birth dearth, fading public confidence in higher education, and federal funding cuts to colleges and universities, more schools in the years ahead will be forced to eliminate programs, raise prices, merge with other institutions, or close entirely unless they drastically change the way they do business, according to policy experts.
“They’ll need to make these hard decisions,” Peter Wood, president of the National Association of Scholars and a former tenured university professor and college provost, told The Epoch Times. “The real story is these institutions die hard. They don’t believe they are going to be subject to the laws of nature.”
Not Enough Students to Go Around
U.S. higher education enrollment, which previously sat at about 20 million students, decreased by more than 1 million students between 2012 and 2022, according to the National Student Clearinghouse Research Center. A surprise spike in enrollments was reported for the 2022–2023 school year, but that was mainly because of an increase in online enrollment and college-level course offerings at high schools.
The “enrollment cliff” has become a common phrase in higher education. The U.S. birth rate had already been declining steadily since 1990, and the Great Recession, which spanned from late 2007 to mid-2009, further exacerbated that trend. The number of babies born annually in the United States decreased to 3.6 million in 2020 from 4.2 million in 2008, according to data from the Centers for Disease Control and Prevention and a 2023 research report from the Trellis Company, a nonprofit research firm.
Moreover, according to the Trellis report, the college-going population is expected to decrease by 15 percent between 2025 and 2029.
Even though listed tuition prices at most schools have only increased at or below the rate of inflation since 2018, operating expenses and employee health insurance costs have skyrocketed. The average private college or university cuts its sticker price in half to maintain enrollment numbers even if it is running in the red, according to a December 2024 report from the Federal Reserve Bank of Philadelphia. The report summarizes data from the National Association of College and University Business Officers.
The report also stated that 62 percent of students are enrolling in college the semester after their high school graduation—an 8 percent drop over the past decade and an indication of “growing skepticism among the public about the value of higher education.”
There are already too many schools competing for a shrinking number of students. Between the 2022–2023 and 2023–2024 school years, 99 higher education institutions closed, according to the National Center for Education Statistics.
The list of 2025 closures includes St. Andrews University in North Carolina, Limestone University in South Carolina, Eastern Nazarene College in Massachusetts, Fontbonne University in Missouri, Northland College in Wisconsin, and Paier College in Connecticut.
There are still about 2 million unfilled slots across more than 5,000 U.S. colleges and universities, which is “not even close to equilibrium,” Gary Stocker, principal at data analytics company College Viability, previously told The Epoch Times.
Career, Cultural, and Technological Changes
The revived national interest in career and technical education also detracts from four-year college programs. A glance at community colleges and vocational training institutes across the nation indicates abundant certificate programs and “stackable credentials” toward college degrees through which students can obtain workforce credentials in the health care, manufacturing, technology, agriculture, and hospitality industries in 15 weeks or less.
Wood said despite shrinking enrollment and low career prospects, too many institutions refuse to cut majors that have no return on investment.
Many programs, he noted, originated as classical humanities such as English literature or history but evolved into ideological training sessions for subjects including “queer and transgender studies” or “colonialism.” Administrative staffing to push and police those cultural shifts has ballooned in recent years, often with federal funding.
Under President Donald Trump’s executive orders prohibiting anti-Semitism; diversity, equity, and inclusion; and transgender ideology on federally funded campuses, federal grants to several elite universities have been cut or frozen, and the 15 percent cap on indirect costs—such as administrative support, laboratory maintenance, and utilities—for research projects funded by the National Institutes of Health is intended to eliminate administrative bloat, Wood said.
Universities that the federal government deems to have misused grants now face tuition hikes and/or cuts to maintain programs if a share of federal funding is cut, Wood said. Several of them have billions of dollars in their endowments, but those funds are often earmarked for specific scholarships, faculty chairs, or facility improvements and cannot be used to maintain administrator positions or discount tuition at the wholesale level.
Less prestigious schools that have small endowments are more likely to save money by putting off facility maintenance, even though they would be better off in the long term if they cut some academic programs and staff, Wood said.
The cost of student services at most residential schools is also rapidly increasing as schools emphasize the need for more counseling services and expensive interventions, according to Wood.
“It’s the rise of the therapeutic university,” he said. “Every human frailty turns into an expensive need.”
Data from research organization Healthy Minds Network indicate that the percentage of college students reporting depression rose by 23 percentage points between 2014 and 2022, while the percentage of students reporting anxiety rose by 15 percentage points.
The rise of artificial intelligence (AI) creates another burden for admissions offices as the job market for under-skilled college graduates is expected to shrink for those with degrees in the humanities and STEM (science, technology, engineering, and math) fields.
Young people might be more apt to complete short-term vocational certificates in “AI-proof” careers such as plumbing or welding without going into long-term debt, Wood said.
‘Mission Creep’
The higher education industry was aware of demographic changes, but instead of scaling back, some schools tried to outcompete their peer institutions by adding facilities, sports teams, trendy majors such as video game design or cannabis studies, and taking on more than they could afford, according to Jenna Robinson, president of the James G. Martin Center for Academic Renewal.
In doing so, a number of schools abandoned whatever niche they had and lost sight of their identity, she said. Robinson calls this “mission creep,” and provided Johnson and Wales University as an example.
The university, known for its culinary school, expanded over time, with campuses in six states and an ever-expanding list of majors. Its Florida and Colorado campuses closed in 2021. In spring 2025, Johnson and Wales administrators announced that 91 faculty and staff members will be laid off because of a $34 million deficit and continuing enrollment decline.
“They lose focus on what they are best at,” Robinson said, noting that several of the small liberal arts colleges in the Northeast and Midwest that closed in recent years had continued to grow campus services and maintain niche programs with few students, even as they ran deeper in the red.
“They try to be everything to everyone and end up diluting their brand,” she said.
What Schools Can Do
The James G. Martin Center published a guide in 2024 for surviving the demographic cliff.
Georgia’s public university system is recognized as an example to follow. It saw the looming concern in 2011 and closed nine campuses over seven years.
West Virginia University got ahead of its debt by cutting 32 academic programs and 169 faculty members, according to the guide. Likewise, three struggling schools in Vermont merged with Vermont State University in 2022, and Belmont Abbey College in North Carolina cut tuition by 33 percent in 2013, maintaining its operating budget and targeted enrollment rates for nine years before implementing a $1,000 tuition increase in 2023.
Cutting athletic expenses and programs at colleges is very unpopular in the United States, Robinson said, but for many schools it can be a lifeline.
A small percentage of highly successful Division I football and basketball programs make millions of dollars through television revenues and cover all the costs for their school’s other teams, but the vast majority of NCAA athletic programs are running in the red.
Cutting professor pay is probably not an option, but schools have room to trim their administrative staff, Robinson said.
According to a June report from the American Association of University Professors, the median low pay for professors is $62,023 and the median high is $181,273. That range is $142,000 to $512,000 for chief financial officers, $187,000 to $477,000 for chief academic officers, and $268,000 to $900,000 for college presidents, although leaders at top U.S. schools are paid millions of dollars.
Robinson applauded proposed federal legislation to limit student loan amounts based on an earnings test that gauges the marketability of degree programs. Universities should have “skin in the game,” she said. For degree programs without promising career prospects, schools would need to put together financial aid packages to enable students to enroll even if federal loans are limited.
Colleges and universities, she said, need to become sensitive to how they spend money and operate more efficiently before increasing debt and declining enrollment reach a point of no return.
“The future of higher education will be different, but it doesn’t have to be bleak,” she said.
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