The last few years have been tumultuous ones for the U.S. higher education industry.

Increased regulation and falling enrollment were among several factors contributing to the closure or consolidation of hundreds of colleges and campuses around the country.

That consolidation also had an impact on the priorities of ones that remained open. Institutions are adding degree programs in emerging tech fields such as artificial intelligence, dropping low-enrollment programs including some in the liberal arts, and looking online where they can reach a bigger audience with niche subject matter.

That activity is ongoing and analysts forecast more ahead for 2019, which is why we've started publishing a list of closures and M&A activity from 2016 to the present. We're pairing it with analysis of the major trends the data reveal. We'll update the list and our analysis as we hear about closures, M&A and other consolidation. We're also keeping track of major news around departments and programs added, dropped or otherwise changed each quarter.

If you see something we missed, let us know by using this form. You can see the full list here.

Below, we explore some of the biggest trends in higher ed consolidation.

The future of for-profits

Education Dive's list includes more than 50 for-profit colleges that closed, were acquired or consolidated since 2016. Among them are chains such as Brown Mackie College and ITT Technical Institute, which together operated more than 100 campuses across the country, meaning the count of affected locations is much higher.

The for-profit sector has been in a downward spiral since 2016, when the Obama administration increased its oversight and stripped federal recognition of the accreditor responsible for two large chains — ITT and Corinthian Colleges — whose high-profile collapses drew attention to issues of misrepresentation and poor student outcomes within the sector. That accreditor, ACICS, oversaw about 250 colleges in 2016, a figure that has since shrunk by roughly two-thirds with 61 closing and more than 100 finding new accreditors, according to a July 2018 report by the Center for American Progress.

More than 100 for-profit and career colleges closed between the 2016-17 and 2017-18 academic years alone, while 20 nonprofit colleges shuttered during that period, according to data from the National Center for Education Statistics. And although the number of credentials issued increased 1.2% from 2012-13 to 2016-17, for-profits offered nearly 30% fewer than nonprofits.

 ITT closed more than 100 campuses in September 2016. 

Credit: Dwight Burdette via Creative Commons

 

Efforts by the U.S. Department of Education under Betsy DeVos to remove some of that oversight are underway, most recently with its move to permanently reinstate federal recognition of ACICS after DeVos temporarily restored it earlier this year. That could breathe new life into several ACICS institutions that were unable to find new accreditors. However, shortly after it regained recognition, one of the biggest remaining for-profit college operators, Education Corporation of America, shut its doors abruptly when ACICS suspended accreditation for some of its locations. DeVos's Ed Department has also pledged to overhaul two key Obama-era regulations concerning for-profit colleges — borrower defense to repayment and gainful employment — though it missed a key deadline for doing so.

For-profit colleges have been taking advantage of lax oversight from the Ed Department to shed the sector's tainted reputation and targeted regulation.

The biggest move yet involved the for-profit Kaplan University, whose acquisition by Purdue University was finalized in 2018 to form the framework of the nonprofit's online education platform. And Grand Canyon University recently won approval to change status from a for-profit to a nonprofit institution, though it will operate under a for-profit parent that handles support services such as technology, marketing and financial aid. Critics say such moves allow for-profits to operate as nonprofits.

Several House Democrats, who won a majority in the 2018 midterm elections, have pledged to step up oversight of the Ed Department's de-regulatory efforts. Industry observers expect more movement among for-profits through 2020, including nonprofit conversions and acquisitions.

Small liberal arts colleges fight to stay open

A different set of headwinds is contributing to a spate of closures among small liberal arts colleges, many of which have a religious affiliation. 

Most significantly, undergraduate enrollment is on the decline, reducing the tuition revenue that many small colleges rely on for lack of a sizable endowment. Experts say the drop off is due in part to a strong economy and low unemployment rate, and to projections of a cyclical decline among the college-age demographic. To help attract more students, the rate of tuition discounts is going up.

A 2016 report from Ernst & Young affiliate the Parthenon Group found 800 colleges vulnerable to "critical strategic challenges" due to their small size, compared to a much smaller share of colleges with enrollments over 1,000. The report lists several risk-factors for small colleges amid the current environment of consolidation in higher education. Those include: enrolling fewer than 1,000 students; the absence of online education programs; tuition increases greater than 8% and discounts higher than 35%; and depending on tuition for more than 85% of revenue.

In a review of more than 75 New England colleges enrolling more than 100 students and that had annual expenses of less than $100 million in 2012 and 2016, the Boston Globe found tuition accounted for 70% or more of revenue at 63 institutions. Harvard University, by comparison, got 21% of its revenue from tuition in 2017. Small liberal arts colleges have played an important role in the region's economy and history, the Globe notes, which is partly why their closures tend to make headlines.

The closure earlier this year of Mount Ida College, which is located near Boston, made headlines again in November after former students sued the school, alleging officials knew the college was facing financial trouble and didn't inform students of the situation until it abruptly shuttered in May following a failed merger attempt. The suit also claims the college gave sensitive student information to the University of Massachusetts System as part of the sale of its campus.

As the Mount Ida deal indicates, what happens to a campus after a college closes is also becoming a bigger question. Hobby Lobby, for example, in October agreed to pay $8 million in a bankruptcy sale for the 73-acre campus of Saint Gregory's University, a Catholic college in Shawnee, Oklahoma, that closed in late 2017. Court documents state Hobby Lobby will keep the campus a college.

Not all colleges faced with the likelihood of closing end up doing so, however. Similar to the alumni-led fundraising campaign that saved Sweet Briar College after it announced in 2015 plans to close, Iowa Wesleyan University raised enough money from alumni and the community to keep it open for the spring 2019 semester just a few weeks after officials announced the college might close due to financial difficulties amid longer-term enrollment declines.

Big systems consolidate, too

Just as small colleges are undergoing major consolidation, so too are some larger university systems. Among the most high profile is the set of mergers underway within the University of Wisconsin System, which will consolidate 13 two-year colleges into seven four-year colleges. It's the system's biggest change since it formed in 1971, according to the Wisconsin State-Journal.

The University of Georgia System has been consolidating campuses for several years in a move to reduce operating costs and improve student outcomes. A trio of community colleges in Alabama, too, is consolidating into a single institution with a new name: Coastal Alabama Community College.

 The four-year University of Wisconsin-Green Bay will absorb a trio of two-year colleges: UW-Manitowoc, UW-Marinette and UW-Sheboygan.

Credit: UWGB Cofrin Library

 

Slightly less than half of college mergers between 2010 and 2017 — roughly 40 across nine or more states — involved at least one public college, according to The Pew Charitable Trusts' Stateline publication. Colleges face several challenges to successful mergers, however, including the potential for cultural mismatches, higher tuition from reduced local competition and challenges reconciling salaries of two-year college employees with the often-higher rates commanded by those at four-year institutions, Stateline reported.

Consolidation between individual colleges or entire systems is most successful when it's part of a strategic plan and not a last-ditch effort to save an institution, according to a 2017 report from the research arm of the Teachers Insurance and Annuity Association of America. The report notes potential short-term costs include updating campus buildings, marketing the change and lost efficiencies despite the move to scale, and that gains pay out over the long term.

You can see the full list of consolidation here. Did we miss something? Let us know.