Consolidations and closures counter educational attainment and equity

For those who know and love Cazenovia College, Finlandia University or Holy Names University, it was an especially bittersweet end to the academic year, as each institution had announced plans to close. Yet college and university closures and consolidations are moving us in the wrong direction as a nation. If we focus too narrowly on financial issues facing higher education institutions and the shrinking population of 18- to 24-year-olds, we miss the fact that these closures will also have a significant impact on educational attainment and equity. 

At a time when the United States is lagging other nations in increasing its share of 25-34 year-olds with a postsecondary education — sinking from just behind Canada in 1995 to 12th in 2021 — we should be increasing demand, not shrinking supply. Given the global returns to skilled labor, this has important implications for our economic growth, which in turn has national security implications.  

To increase educational attainment at the postsecondary level, we need to increase rates for those populations for whom it is currently low, including under-represented and lower-income students. In 2021, 41.9 percent of the non-Hispanic white population ages 25 and older had a bachelor’s degree or higher, compared to 28.1 percent for the Black population and 20.6 percent for the Hispanic population.  

Closures and consolidations will have a negative impact on these students, yet too often their needs are left out of the conversation. For example, Cardinal Stritch University recently announced that it was closing. Forty-six percent of its students receive Pell grants and 40 percent of its students are Black, Hispanic, or two or more races. For the closures tracked since 2016, data from IPEDs (Integrated Postsecondary Education Data System, NCES) confirm this concern. Of the 92 institutions tracked, IPEDs reports data for 87 of them, all but one of which is a private, non-for-profit. Excluding the one public institution, 30 percent of students at these institutions were underrepresented minority students, 44 percent were Pell recipients and 54 percent of first-time, full-time students received Pell grants. This contrasts with 25 percent, 31 percent and 32 percent for the entire universe of private, non-for-profit institutions reported in IPEDS for 2020-21. Low-income and underrepresented minority students are being disproportionately affected by college closures, and how they fare post-closure is important to our nation’s educational attainment goals. Similarly, consolidations need more attention. If designed to address financial concerns, they are likely to have a disproportionate impact on lower income students and underrepresented populations. 

Minimizing the impact on attainment goals of lower income and underrepresented students while addressing financial concerns therefore needs more attention. Our earlier research found that institutions were in fact not even collecting the type of data needed to evaluate equity impacts post-consolidation.  

Given attainment goals across many states, a better alternative to closures or consolidations would be to fill any available seats. Doing so is complicated, because increasing attainment involves increasing participation on the part of those least able to pay on their own. This is in fact what has put many institutions in financial difficulty. Reducing costs (both what it costs to educate a student and how much of that cost families are asked to pay) needs to be part of the solution — not just reducing capacity.

The institutions most at risk of closure are small, private non-profits that cannot take advantage of economies of scale and that don’t have large endowments, as well as rural public institutions where enrollments have declined as a result of declining populations. These institutions have suffered in part because the family incomes of the students they have traditionally served have not kept up with the costs of higher education (in part driven by the increases in the costs of skilled labor). Many of these families still want their children to go to college, understanding that despite the rhetoric, the returns to higher education remain significant. 

Small, private institutions could benefit from collaborating, even merging, to take advantage of economies of scale and reduce costs. This sector, although small, has a long and distinguished history of successfully educating students from their communities. Sustaining their capacity can contribute to both attainment and equity goals. These colleges are often a major employer in their community, so there are additional benefits of finding solutions to their financial challenges, beyond closure.

As public higher ed systems consolidate, focusing on rural students will be important. With the increase in technology options, it is no longer the case that rural institutions should be the ones to close or merge. Rural institutions may play a more important role in the economic health of their communities than the more suburban or urban institutions, which warrants finding solutions that don’t involve closure or reduced capacity.  

Some closures or emergency mergers are going to happen. When they do, a focus on equity issues can improve the outcomes for the students. Those institutions that close in a more controlled fashion — planning well in advance — can more effectively take these concerns into account, ensuring that remaining net assets are used to help those students who have not completed their degrees.  

When institutions wait too long to address their financial challenges and then have to close under duress, they make matters even worse. Lower-income and underrepresented students are given little time to plan and can lose credits as they transfer to new institutions, or they may stop out altogether. Higher-income students who can pay full tuition, on the other hand, will have more options.  

Exploring strategies for reducing costs and sustaining capacity would contribute to state and federal attainment goals. Focusing on collaborations to reduce costs and increase demand would be a better outcome from a public policy perspective, and states considering consolidations should carefully consider the impacts on state attainment and equity goals. As a nation, we put our economic and political power at risk if we tolerate decreasing educational attainment in a world that rewards talent. We put our commitment to democracy at risk if we do not ensure the rewards in our economy are more equally available, regardless of race or family income.

Catharine B. Hill is managing director of Ithaka S+R and president emerita of Vassar College.