College mergers have been on a significant rise in recent years as colleges are increasingly struggling to stay open. One of the causes is attributed to financial issues caused by the COVID-19 pandemic. It created a short-term crisis that the U.S. government tried to alleviate by providing $76 billion to help keep schools open, but it is still predicted that at least 500 4-year colleges will still close.
Shrinking enrollment is another reason that schools are struggling as undergrad enrollment has fallen by nearly 1.4 million students since the start of the pandemic. In fact, there has been a decline in enrollment in both 2-year and 4-year colleges. Up to 40% of possible students are not entering college immediately due to financial circumstances or a desire for in-person learning.
Fewer U.S. adults are also considering a college degree as crucial for future success. From 2020 to 2022, at least 10% of Americans were able to shift to a higher-wage job from a lower-wage position without the need of a college degree. Universities have also been struggling to keep their staff at optimal levels as many have been laid off during the pandemic shutdowns with many finding a new position or retiring early.
Mergers typically work by getting approval from the participating institutions’ board of trustees and the colleges’ accrediting bodies before getting support from other stakeholders. There are several types of mergers schools can consider, including a local merger with nearby schools or international joint-venture mergers with foreign universities to serve a broader student body. More universities that are smaller in size and are less prestigious as well community and public colleges are more at risk of closing and will probably consider college mergers the most.
Although mergers can be beneficial to small colleges that are heading towards permanent closure, there are still long-term effects that might cause concern. For example, mergers can cause these small schools to lose their individual identity while also taking away the voices of the school faculty and students. Minority students might also struggle more to find a sense of belonging in a larger university, and college mergers could increase tuition fees by almost 7%.
Colleges are continuing to struggle to stay open, but considering a merger can be a helpful solution during these hard times.