The closure rate among American colleges is accelerating, with Huron Consulting Group projecting that more than 440 private nonprofit four-year institutions—roughly a quarter of the total—are now at risk based on enrollment patterns, debt levels and other indicators. Small, rural and religiously affiliated colleges face the greatest danger of shuttering.
Several demographic and policy shifts are driving the decline. The nation is experiencing fewer 18-year-olds due to birthrate declines beginning around the Great Recession, with projections indicating a 15 percent reduction in this age group by 2039. College enrollment has already fallen by approximately 2 million students since 2011, and the proportion of high school graduates attending college directly has declined from 70 percent to just under 63 percent in 2024. Additionally, international student enrollment has contracted due to tightened visa policies and increased costs, forcing institutions to reduce programs and services.
The human toll is substantial. According to research by the State Higher Education Executive Officers Association, fewer than half of students at closing colleges continue their education elsewhere, and of those who do, only half ultimately earn degrees. Approximately 670,000 students are currently enrolled at institutions identified as troubled.
Policymakers are implementing consumer protections in response. Massachusetts, which has experienced 27 college closures or closure announcements since 2014, now requires private institutions to disclose financial reports publicly and identifies schools at imminent risk. Twenty-two states have established tuition recovery funds to compensate students when colleges close, with proposals under consideration to create a federal equivalent. Lawmakers are also working to streamline merger processes for struggling institutions.
One unexpected benefit of the sector’s contraction is improved admissions prospects. Median acceptance rates at bachelor’s degree-granting institutions rose by at least 7.6 percentage points between 2012 and 2022, with some schools waiving application fees and offering financial incentives to prospective students.
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