Colleges Are Closing. The Enrollment Crisis Is Just Beginning

The college closure crisis is getting harder to explain away as a series of isolated institutional failures. Higher education institutions are facing a difficult mix of declining enrollment, rising operating costs, mounting debt, financial deficits and accreditation pressures across the country.

The challenge is that these pressures rarely show up one at a time. A college may start by losing students, but fewer students quickly means less tuition revenue. Add rising operating costs, debt, limited financial reserves, changes in government funding and growing competition from online and alternative education, and the pressure starts to compound. 

For smaller, tuition-dependent institutions, there may be very little room to absorb years of enrollment decline. In many cases, a closure isn’t the result of one bad year. It is the end point of financial and enrollment pressures that have been building for years. 

The college closure crisis is bigger than it looks

According to an Inside Higher Ed report, at least 16 nonprofit institutions announced closures in 2025 because of enrollment and financial challenges.

The pattern suggests that 2025 was not an anomaly. It was another year in which institutions found that their existing financial models could no longer absorb sustained pressure.

The historical data make it harder to dismiss this as a recent problem. An analysis of federal data by The Hechinger Report found that 28 degree-granting institutions closed in just the first nine months of 2024, compared with 15 during all of 2023. 

The current wave of closures didn’t come out of nowhere. Nearly 300 colleges and universities offering associate degrees or higher closed their doors between 2008 and 2023. And this trend goes back much further: 861 colleges and 9,499 campuses closed between 2004 and 2022. 

So, perhaps the more important question is not whether the enrollment crisis is coming, but how long it has already been here. The demographic cliff may be making the problem more visible, but the underlying pressures have been building for years. For colleges with little financial cushion, fewer students aren’t simply a demographic challenge. Instead, they can quickly become an existential one. 

And 2026 isn’t looking much different. University Business reported previously this year that another group of institutions is heading toward closure, including University of Valley Forge, Anna Maria College, Hampshire College, Lourdes University and California College of the Arts. 

The numbers behind some of these closure announcements are even more telling. University of Valley Forge has lost half its enrollment since 2007. Limestone University fell from 3,214 students in 2014 to roughly 1,600 in 2025 and was facing a $20 million deficit. Hampshire College brought in just 168 new students against a target of 300, while carrying $21 million in bond debt.

At what point does declining enrollment stop being an admissions problem and become an existential business problem? For an increasing number of colleges, that line appears to be getting closer. 

Delineating the reasons behind college closures 

It is tempting to look at a college closure and say the problem was simply a lack of students. But the more you look at what is happening across higher education, the more complicated the picture becomes. Declining enrollment sits at the center of the problem, but it rarely works alone.

When an institution depends heavily on tuition, has rising operating costs, limited financial reserves or significant debt, losing students can quickly become a much bigger financial problem. 

In the CNBC discussion, Robert Franek of The Princeton Review points to the coming “enrollment cliff” and notes that roughly 95% of U.S. colleges rely on tuition revenue. Fewer students, then, don’t just mean fewer people in classrooms; they mean less revenue to support the institution. But demographics are only part of the story.

Emily Wadhwani, a senior director at Fitch Ratings, describes the challenge as an “unsustainable operating platform”, one where costs continue to rise while enrollment and tuition revenue become harder to sustain. Colleges can’t keep raising tuition indefinitely, particularly as students and families scrutinize the value of a four-year degree more closely.

What makes the situation more difficult is the cycle that follows. Colleges facing enrollment pressure may offer more financial aid, increase marketing, add new programs or invest in the student experience to remain competitive- all of which cost money. 

If those investments don’t generate enough additional enrollment, the financial gap widens further. That is why I don’t see the closure crisis as simply a demographic story. It is also a test of how resilient an institution’s operating model is when growth can no longer be taken for granted. 

A college may have enough students to remain open today and still be heading toward trouble if its costs, debt and revenue model aren’t aligned with the size and needs of its future student population. By the time a closure makes the news, the underlying problem may have been building for years.

The enrollment problem is also becoming a financial planning problem. A 2025 Inside Higher ed survey of 169 college chief business officers found that enrollment declines ranked among the top financial risks facing institutions, alongside rising personnel costs and infrastructure and deferred-maintenance expenses. 

More than half of respondents were also concerned about the sustainability of their tuition discount rates. The question, then, isn’t simply whether colleges can attract students. It is whether they can attract enough students at a price that makes the institution financially sustainable.

Then there is the cost side of the equation. A college can lose enrollment without being able to proportionally reduce its expenses. In fact, Inside Higher Ed’s 2026 survey found that seven in 10 chief business officers believe their institutions have too many academic programs for their current enrollment, up from 59% the previous year. 

Academic offerings were also the most commonly cited source of cost-revenue misalignment. That raises a difficult question for higher education: how long can an institution continue maintaining programs, facilities and infrastructure designed for a larger student population?

And then there are pressures colleges have less control over: changes in federal funding, international enrollment, student financial aid, state support and changing perceptions of the value of a degree. In 2025, 42% of chief business officers said they were concerned about structural cost imbalances, while 46% identified enrollment declines as a top financial risk. At the same time, students have more alternatives than they once did, from online degrees and short-term credentials to workforce pathways that don’t require a traditional four-year experience.

A deeper enrollment crisis is awaiting

What if the next enrollment crisis isn’t just about fewer students entering the market, but colleges failing to connect with the students who are already interested? As the pool of prospective students gets smaller, every inquiry becomes more valuable. Yet the basics are still getting missed. UPCEA’s 2025 Enrollment Process Review, based on 1,000 inquiries to higher education institutions, found that 44% of prospective-student inquiries received no response at all. For those that did, the average wait was 14 hours and 23 minutes.

And speed isn’t the only issue. Students want relevance, too. A 2024 Niche survey found that just 15% of students said colleges were sending information that was very relevant to them. That should give enrollment leaders pause. If students have more choices and are comparing institutions based on the experience they receive, how much patience do colleges really have for generic emails, delayed answers and disconnected interactions?

Think about what an inquiry actually represents. A prospective student has taken the time to raise their hand and say, I’m interested. Tell me more. What happens next matters. If the response arrives too late or doesn’t address what the student actually needs, that initial interest can quickly disappear.

This is why personalization and responsiveness are becoming enrollment issues, not just marketing issues. Colleges can’t control the size of the future student population. But they can control how they respond to it. They can make it easier for students to get answers, understand their options and know what to do next. When every student matters more, perhaps the biggest missed opportunity isn’t failing to find another student, it’s failing to recognize the one who already found you.

The college closure crisis is getting harder to explain away as a series of isolated institutional failures. Higher education institutions are facing a difficult mix of declining enrollment, rising operating costs, mounting debt, financial deficits and accreditation pressures across the country.

The challenge is that these pressures rarely show up one at a time. A college may start by losing students, but fewer students quickly means less tuition revenue. Add rising operating costs, debt, limited financial reserves, changes in government funding and growing competition from online and alternative education, and the pressure starts to compound. 

For smaller, tuition-dependent institutions, there may be very little room to absorb years of enrollment decline. In many cases, a closure isn’t the result of one bad year. It is the end point of financial and enrollment pressures that have been building for years.