Ciara Duggan, a recent graduate, was shocked to learn that the Philadelphia school had been having trouble when the University of the Arts shut down in early June.
The man said, “Everything looked really good.” She also said that students didn’t see many signs of money problems besides the sale of a dorm building in December 2022.
Then the Philadelphia Inquirer reported that UArts would be closing in just one week.
Higher Ed Dive says that 15 nonprofit colleges have already said they are closing, merging, or buying other schools this year. UArts is one of them. As many as 20 of these were made in 2023.
There may be more to come. As other colleges try to stay financially stable, they have cut back on staff and programs. There was a time this year when schools were closing about once a week on average.
Since the pandemic, fewer students have been enrolling, and there has been a sharp drop in the number of students of traditional college age. These announcements come at a time when schools are having trouble because of these problems.
“Like any other product, it’s a matter of supply and demand,” said Gary Stocker, founder of College Viability, a company that looks at college data to give administrators, faculty, staff, and students information about how financially stable a school is.
Stocker says that the market will become more concentrated, and some colleges may have to close because they aren’t properly equipped to help their students.
The situation is hard for students, teachers, and staff.
Students are upset.
Students’ lives were turned upside down when UArts abruptly closed without much notice or signed teach-out agreements that would have made it easy for them to finish their degrees at other schools, said Duggan, who had graduated two weeks before. Some students slept on the steps of a UArts building during protests that they organized.
Duggan said that one of the biggest worries of the protesters is that they don’t know why the school was suddenly closed.
She said, “We’re not necessarily trying to bring UArts back to life; we just want the answers.” “All we want is an open and honest conversation.” “What happened? How did this happen?” A town hall meeting where the school was supposed to answer questions from the public was called off at the last minute, she said.
UArts closed because, according to the school, it was having a hard time with falling enrollment, falling income, and rising costs. The body that oversees the university also took away UArts’ accreditation, which is needed for a college to get federal aid.
Multiple people with ties to UArts were asked for comments, but none of them responded.
A report from 2022 by the State Higher Education Executive Officers Association and the National Student Clearinghouse Research Center says that unstable finances are the main reason why colleges close.
Most of the time, small, private schools that close are ones that make money. But some colleges that aren’t for profit are also having money problems. A new study from the National Association of College and University Business Officers says that nonprofit colleges lose more than half of the money they would make if they charged full price to students. This strategy of high tuition and high aid can be hard for some schools to keep up.
In addition, Stocker said that this year’s FAFSA mess—in which major delays in the release of the updated form made it impossible for students to send in their financial aid applications to schools on time—could also hurt enrollment, putting even more schools’ finances at risk.
The change can be easier with help from schools.
There are times when a school has to close. How the administrators handle the closing affects the students, staff, and faculty. Presentation College in South Dakota told students that it would be closing in January 2023. The college led students through a smooth process.
It was announced that Presentation would be closing a whole semester before the school actually shut down. Catherine Marciano, vice president for partnerships at College Possible, a nonprofit that helps underrepresented students get college degrees, says that the admissions staff turned into a “transition team” and that the administration signed 36 “teach-out” agreements. Students can study at a partner school through a teach-out agreement if that school agrees to accept all of their credits, pay for their tuition, and let them finish their degrees on time.
Presentation also worked with the group to offer direct coaching to all 400 or so students at the school via the partnership.
According to Marciano, 88% of students had graduated or started at another school in the fall of 2023, which was the semester after Presentation closed. In the spring of 2024, 83% of students were still enrolled at a school.
SHEEO and NSCRC found that less than half of students usually re-enroll when their colleges close. Less than half of the students who do re-enroll stay long enough to finish a credential.
These students, whose status is called “some college no credential,” don’t make much more than people who have never been to college, and Terah Crews, CEO of ReUp Education, an organization that helps people with this status return to college, says that they often have student debt.
SHEEO and NSCRC say that students are more likely to re-enroll and finish a credential if the school closing is not sudden. This is mostly because teach-out agreements keep students from having to deal with the process of transferring credits. Charles Ansell, vice president for research, policy, and advocacy at the nonprofit Complete College America, says that process often makes people not want to re-enroll.
Paula Langteau, who used to be president of Presentation College, now works as a consultant helping other schools that are about to close. She stressed how important it was to give the college community enough notice—six to twelve months, according to her—and not wait until all the money was gone before starting the process of closing. Langteau said that some administrations still have hopes that the institution can be fixed in the future, but they need to be ready for it to close.
The kids need to make a plan.
Students at colleges that are closing down need to do something, even if the school helps them. They need to choose which school they want to go to if they decide to go to another one. They will also need to make a plan for how they will finish the degree they want, get official copies of their transcripts, and look into ways to get rid of their student loans.
A professor at the University of Tennessee, Knoxville, and an expert in higher education finance named Robert Kelchen said that when colleges close, faculty and staff lose their jobs and sometimes don’t even get severance packages.
Langteau from Presentation College said that the timing of an announcement of closure is important for faculty. If the announcement is made in or before January, when academic hiring starts for the fall, faculty will have a better chance of finding a new job. In a blog post, she said that the college should help staff members find new jobs and prepare for the possibility that they will quit before the school shuts down.
Kelchen said that closings can also hurt the economy of the area. He also said that economic effects are a big problem in rural areas where people may depend on the institution’s presence.
Kelchen said that colleges that are having trouble may be bought out by or merged with bigger schools.
Kelchen said that for students, an acquisition or merger is better than a closure because they can usually finish their degree without any problems. He also said that jobs for faculty and staff are still in danger.
Experts say that in the future, more campus communities may have to deal with their school’s financial problems or closure.
Stocker thinks that “the die is already cast” for many schools.
But some experts say that schools can deal with problems caused by different racial and cultural groups. Crews from ReUp Education says that schools that are having trouble getting students should look to adults instead of just 18-year-olds.
When asked if the average college student should worry about closure, Kelchen says that they shouldn’t worry too much. He said that it is rare for nonprofit colleges to close like UArts did. And when you look at the big picture, the number of colleges closing is still pretty small.
“It’s more than a few years ago,” Kelchen said. “But it’s still not a mass extinction event.”
