Struggling Colleges’ Predicted Dilemma: Merge or Close Up Shop
Over the next few years, more small, private colleges may be faced with the decision to either merge with another school or close their doors as rising energy costs, increased competition for students, and the lingering credit crisis eat away at these private colleges’ profit margins, according to an article in Inside Higher Ed (“Will More Colleges Merge?,” Aug. 25, 2008).
The economic downturn that is threatening both families’ ability to pay for college and donors’ ability to continue financially supporting schools to the same extent they have in the past, may mean that “colleges in difficulty are going to be willing to try more ambitious solutions such as mergers,” says Richard Ekman, president of the Council of Independent Colleges.
This month, Woodbury College in Vermont announced it would merge with fellow state school Champlain College. In July, California schools John F. Kennedy University and National University joined together.
Ekman wonders if other small colleges, which have typically “found amazingly imaginative ways to thrive” under financial hardship, may also be on the verge of merging or closing. Other industry experts contend that the private sector of higher education has always been in some degree of flux with colleges constantly having to adapt to demographic changes and students’ shifting interests.
“There will be a handful of colleges opening, closing or merging [every year],” says David Warren, president of the National Association of Independent Colleges and Universities. But Warren sees “no compelling evidence that we are entering a new era of consolidation in private higher education.”
Private Colleges Experiment With New Ways to Stay Afloat
Still others argue that the number of colleges officially merging may understate the extent to which small colleges are considering radical changes in order to survive, writes Inside Higher Ed reporter Scott Jaschik. More colleges are turning to collaborative partnerships with other universities to keep their doors open.
Last year, Shimer College, a small independent liberal arts school that bases its education model on small class seminars and emphasizes the study of classical literature, relocated 40 miles away to the Chicago campus of the Illinois Institute of Technology. This year, Shimer also started a joint B.A./J.D. program with the Chicago-Kent College of Law.
The moves were needed, Shimer officials say, to help the “great books” college, which was struggling to keep enrollment at 100, attract new students. This year, enrollment at Shimer is up by 25 students.
Robert Zemsky, CEO of the Learning Alliance for Higher Education, an organization that advises colleges and universities on market strategies, predicts that mergers may grow in their appeal among both small, cash-strapped colleges and financially secure schools that see merging as a better way to grow enrollment and diversify their offerings.
This merger trend could be a blow to the U.S. system of higher education, Ekman says. “The diversity of the types of American colleges and universities has always been the wonderful strength of the American system,” he says. “To me, it’s a shame when any college goes out of business or needs to sacrifice its distinct identity.”