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Chapter 1: What led to the closure of Hampshire College?
Last week, Hampshire College, a private liberal arts school in Amherst, Massachusetts, that I had never previously heard of, announced it was shutting down. And I thought, bummer for Hampshire College. But then I read, this is much bigger than Hampshire. The United States currently has 4,000 colleges, and more and more of them are closing every year.
In an article at The Atlantic titled The Looming College Enrollment Death Spiral, the writer Jeffrey Selingo says that your Harvard's and Yale's and universities of Michigan and Alabama are going to be just fine, but that smaller regional schools that you maybe haven't heard of won't be.
And that means that students who can afford to go to out-of-state schools for their education will continue to do so. But more importantly, those who can afford it might not go to college at all. We are at risk, Salingo explains, of turning a four-year education back into a luxury good in this country. When your college closes, coming up on Today Explained.
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Chapter 2: How are smaller colleges affected by enrollment trends?
I'm John Marcus, the senior higher education reporter at the Hechinger Report. We're a nonprofit that covers education.
OK, so, John, last week it was announced that the private liberal arts college, Hampshire College, would close after its fall semester. Tell us the story of what happened to Hampshire.
Yeah. So like a lot of small colleges, Hampshire had a lot of problems hidden just below the surface. Well, actually, in Hampshire's case, they weren't that well hidden. It had been having problems for more than six years since before the pandemic, but was kind of being kept afloat by its very loyal alumni, who include some people that have been extremely successful largely in the arts.
Who are we talking about? Should we drop some names?
Chapter 3: What financial challenges do colleges face today?
We're talking about the documentary filmmaker Ken Burns. Predominantly, he's probably the most famous alumnus of Hampshire.
At that moment, I said, I want to be a filmmaker. And then going to college and sort of having my molecules rearranged at Hampshire College with teachers who were social documentary still photographers.
Barry Sonnenfeld, the director, he directed the Men in Black movies. Who are you? Really?
Really? I am just a figment of your imagination.
Lupiti Nyong'o, the actress.
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Chapter 4: Why are many colleges at risk of closure?
Hello, I am Rosam 7134.
Lief Schreiber, the actor.
But the fact remains a Boston priest abused 80 kids. We have a lawyer who says he can prove law knew about it. And we've written all of two stories in the last six months.
John Krakauer, the author. All of them went to Hampshire. And so I think a lot of people were legitimately pulling for Hampshire. It's a school that enrolls people that are very interested in the creative arts. It was started in 1970.
Chapter 5: What is the demographic cliff and how does it impact college enrollment?
So by New England standards, it's in Western Massachusetts. By New England standards, it was reasonably young, but it was never very big. Its endowment was very small. Its enrollment continued to decline. It had fewer than 800 students left at the end. It had $21 million in debt. Debt is a really important and largely misunderstood component of this.
When people think of debt and college, they think of student loan debt. but there's also institutional debt, and it is really piling up. Colleges and universities have borrowed significant amounts of money, and so servicing that debt becomes a big drain on their operating budgets.
Chapter 6: What role do cultural perceptions play in college enrollment?
To attract students, colleges do something else that isn't widely known. They discount the tuition. Almost no one pays the list price you see on the website. At Hampshire specifically or everywhere? At colleges in general. The discount rate at colleges and universities is more than 50%. So if you were a private business and you gave back 50% of your revenue, you'd be out of business.
And that's what's happening to a lot of these small colleges. At Hampshire, I looked up the numbers. They were giving back more than 75% of their revenue in the form of discounts just to continue to get people to come there and fill seats there.
Chapter 7: What innovative solutions are colleges exploring to survive?
So Hampshire gets a lot of attention, but it sounds like from what you're saying, this is happening maybe far more often than we know, that four-year colleges, universities are going out of business.
About 100 colleges are closed since the pandemic. Many of them only made it this far because they got federal aid during the pandemic to keep them open. Had they not, they would have probably closed sooner. And there's a new estimate that shows that 442 private nonprofit colleges and universities, that's one quarter of the total, are at risk. And about 120 of them are at severe risk of closing.
And we can talk about some of the reasons for that if you'd like. Please, go for it. So we are running out of students. The number of 18-year-olds is way down.
Chapter 8: How can prospective students navigate the current college landscape?
People stop having children during financial downturns. And if you do the math, the Great Recession was in 2008. So in 2026 is when that hits us. 18 years later, we're running out of 18-year-olds. And that will begin to have an impact on college enrollment in the fall. The last big class was the one that enrolled in this most recent fall.
The next fall is when what they call the demographic cliff begins to hit.
The country is heading towards a cliff, a demographic cliff. Over the next decade, there will be fewer 18-year-olds available to fill the nation's universities. Those missing babies aren't around to go to college. So that means that there's a possibility for some schools, each incoming class could be smaller than the last.
And it's just math. We have too many colleges and we have too few traditional age college students. Of the ones we still have, a smaller proportion of graduates from high school are choosing to go to college. So we hit a peak in 2016 of 70% of high school graduates going to college. That's now down to just a little bit better than 60%. That is a big, big drop in a very short time.
And that has to do with the cost of higher education and the growing interest skepticism about the return on the investment. So that's really taking a toll.
Okay, so we've got the demographic cliff. We've got the cost. There's also a culture war around our colleges and universities currently being waged by this administration. Does that have something to do with it?
That is not helping. It's clearly, under this current presidential administration, we are seeing a lot of other impacts on higher ed that people have been reading about, in my opinion, kind of
obscuring the reality of what's going on about the sustainability of higher education has been the kind of the focus that we've all understandably had on this firehose of funding cuts and lawsuits and attacks on DEI. You see what we're doing with the colleges and they're all bending and saying, sir, thank you very much. We appreciate it.
In the end, though, the kinds of colleges that we're talking about that are at risk of closing, this doesn't affect them because they don't do federally funded research. The one sort of policy under this administration that is hurting some of these small colleges is the crackdown on international students.
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