Dear Commons Community,
The Chronicle of Higher Education has an article this morning with the provocative title, Why Haven’t More Colleges Closed? Without a doubt the pandemic has pulled the rug out from many colleges that already were struggling financially and pushed them to the brink. Prognosticators have been predicting doom, gloom and mass shutterings. That hasn’t happened, but other enormous changes are underway. As a side note, 86 colleges have closed or merged since 2016. The article comments that higher education is proving to be durable and the vast majority of colleges will survive the current crisis. However, it is still early and we are already seeing dramatic reductions in personnel, proposed consolidations, and significant increases in online instruction.
The author of the article takes an optimistic view. Let’s hope she is right!
The entire article is below!
The Chronicle of Higher Education
Why Haven’t More Colleges Closed?
By Rebecca S. Natow
March 1, 2021
Last spring’s abrupt, pandemic-induced pivot to virtual learning led to tremendous financial disruption for colleges. The educational technology came with a lofty price tag. So did retrofitting campuses to comply with public-health guidance, with needs for plexiglass dividers, extra campus cleanings, and personal protective equipment — to say nothing of smartphone screening apps and the cost of Covid testing itself.
There were housing refunds to process, reduced revenues from flat or even decreased tuition pricing, and widespread enrollment declines. State governments threatened enormous funding cuts, and sometimes followed through, exacerbating a troubling pre-pandemic trend. The economic losses have been steep — one estimate comes in at $183 billion — and although the federal government has provided stimulus funding with more likely on the way, the amount seems certain to fall far short of the $120 billion advocates sought.
Observers were quick to grasp the enormousness of Covid’s effects on our sector. Last March, Moody’s Investors Service downgraded its financial outlook for higher ed, citing the pandemic as a cause for the change. In the pages of The Chronicle and elsewhere, experts like Robert Kelchen, Robert Zemsky, and William R. Doyle sounded dire notes. Existential perils loomed, it seemed; mass college closures appeared imminent. Zemsky told The Wall Street Journal in April that the toll could be as high as 200 closures in a year. In Forbes, Richard Vedder wrote that more colleges were vulnerable to closure now “than at any other time in American history” in an article headlined “Why The Coronavirus Will Kill 500-1,000 Colleges.” Last January, John Kroger, a former president of Reed College, predicted 100 small-college closures over the course of a decade. By May, he had revised that estimate upward: “More than 750 to 1,000” such schools would now “go under.”
Two hundred closures, 500, 1,000 — these predictions steeled us for the worst. So what has the cost been so far? How many colleges have shuttered?
Ten — at least that’s the number of permanent closures or consolidations between the beginning of March 2020 and the end of January 2021 according to Higher Ed Dive, which has been tracking college closure announcements. The prognosticators have been wrong, so far — off by factors of 10 or 20 or nearly 100, though in fairness, some predictions were for longer time periods.
These 10 have been small, private institutions, and were often in deep financial trouble before the pandemic. MacMurray College, in Illinois, said the coronavirus’s disruptions were “not the principal reasons” for closure. Pine Manor College, in Massachusetts, began a phased two-year handoff to Boston College to let current and incoming students avoid disruption. The Pacific Northwest College of Art is on track to become part of nearby Willamette University, in Oregon.
These changes are lamentable for the faculty, staff, students, and administrators directly affected, but collectively they represent more of a glancing blow than the direct asteroid hit many pundits predicted. Why?
First, a few caveats. For one thing, it’s still early. A year is a short amount of time in the lifespan of colleges that have existed, in some cases, for centuries. Closures and consolidations take often years of planning to bring about. Also, the significant federal stimulus to colleges may be propping some up just for now, and a wave of closures is possible if such funding disappears. Still, the fact remains that the pandemic has not driven a large number of colleges past their breaking points, at least not yet.
Some of what’s happening fits a longstanding pattern. Should the past year’s predictions of doom remain off target, they will be in good company. Prognosticators like the late Clayton Christensen and Earl Cheit predicted the demise of large segments of higher ed years ago, to no avail. As it turns out, colleges are remarkably durable.
Before our very eyes we’re witnessing an enormous, slow-motion change.
In a 2017 article in the American Educational History Journal, the University of Memphis associate professor R. Eric Platt and colleagues observed that during the Great Depression, only about 2 percent of U.S. colleges closed, and an even smaller number merged with other institutions. As the American Council on Education’s Phil Muehlenbeck and Karina Pineda wrote in 2019, some of the institutions that struggled in the 1970s, including Boston College and New York University, are now among the nation’s most well-regarded. In a November 2020 study, Robert Kelchen found that among private colleges with risk factors for failure, a wide majority were still operating four years later. The story here is that American colleges are strikingly resilient: Even in extremely grim economic contexts they rarely close — and even when they have the sorts of risk factors associated with closure.
It is true that a large number of for-profit colleges (more than 1,000 according to a 2019 article) have permanently closed in recent years. As relative newcomers to the higher-education sector, for-profit institutions tend not to have the deep roots or many of the institutional trappings possessed by a lot of their nonprofit counterparts, which are factors in institutional longevity. Moreover, for-profit institutions have seen their enrollments rise substantially in recent months, indicating a possible turnaround for the sector that may prevent further closures.
While institutions may survive, not everything about them will. Institutional evolution is an important part of institutional survival. That is, although many more institutions than expected are likely to survive the current crisis, they are also likely to adopt fundamental changes to adapt to resource scarcity, changing markets, and the new competitive environment. As Platt and colleagues have noted, colleges throughout history have survived economic and other crises by rebranding themselves, not infrequently following a merger of two or more institutions into one. For instance, two New Orleans institutions in 1930 merged to rebrand as Dillard University. More recently, Southern New Hampshire University successfully rebranded itself from a small, private, regional college to a global distance-learning provider, enrolling over 130,000 students.
Back in 1990, the economist David W. Breneman observed that liberal-arts colleges had expanded their curricular offerings in response to market pressure to adopt more “professional” degree programs, such as business, education, engineering, and health professions.
In recent decades, increasing numbers of colleges have developed fully online course offerings in response to changing market demands. Some colleges have entered into partnerships with business and industry to help increase enrollments, for example, by providing skills training for employees of corporate partners or by working with external firms that specialize in recruiting and serving international students.
Colleges have also reduced or transformed certain programs and practices in response to evolving environments — as well as to reduce their costs. For example, over the years, the proportion of tenure-line faculty has declined while the proportion of lower-cost contingent faculty has increased. Colleges have also eliminated or restructured departments and degree programs to make their offerings more marketable to prospective students. In short, institutions have proved they are willing to make adjustments, reorganizations, and even substantial cuts to lower expenses and keep up with market demand. This willingness to adapt has no doubt been a factor in keeping many colleges financially afloat.
If history is a guide, the vast majority of colleges will survive the current crisis.
Colleges have generally been reluctant to drift too far from institutionalized practices that have been embraced by the sector for ages, such as tenure. And with good reason: Organizational scholars argue that holding onto such practices provides institutional legitimacy, which can in turn bring more resources to an organization. However, as the examples described above demonstrate, colleges have shown a greater willingness to adapt to new circumstances than stereotypes about the sector’s rigidity and reluctance to change would suggest.
Although most traditional institutions will survive the pandemic largely unscathed, many will adapt to the post-Covid “new normal” by instituting new policies or programs and by eliminating others. For example, Stanford University recently eliminated 11 varsity sports programs; the University of Vermont terminated its entire departments of classics, geology, and religion; and the University of Nevada at Las Vegas recently announced the addition of a new graduate program in cybersecurity, to address a growing demand for technologists. While being among the first to make such changes may invite shock and even resistance, the changes will most likely become more accepted over time — part of the new normal.
Such changes are plenty painful. Sadly, higher education has already experienced a large number of cuts in faculty and staff employment in response to pandemic-related financial losses, both current and projected. Some institutions have cut back on employee retirement benefits. And as noted above, consolidations of two or more colleges have also been announced or are being considered. More cost-saving measures are likely to come, at least until college leaders have more clarity about the market demand for higher education in the months and years ahead.
Institutions are also likely to expand curricular offerings in post-pandemic high-demand fields, such as health professions and technology. Also, because colleges have invested so heavily in distance learning during the pandemic, expect institutions to continue to expand their online course and degree offerings even after the need for socially distant teaching subsides. Before our very eyes, we’re witnessing an enormous, slow-motion change: The academy is becoming a more frugal employer, a more virtual entity, and less of a home to the traditional liberal arts — again, extending trends that were already present before the arrival of Covid.
This, it seems, is change enough for now. If history is a guide, the vast majority of colleges will survive the current crisis, as they have survived many other difficult periods in the past. It will be up to us to ensure that higher-education institutions — in their post-pandemic, altered forms — remain true to the important missions of centering student learning, producing valuable research, and adeptly serving their communities.