Pickup trucks with trailers and cars with open trunks arrived at unkempt lawns in front of buildings where people retrieved books, furniture, mattresses, trophy cases, and artwork.
Most valuable items had been sold off by a firm specializing in auctioning leftover assets from defunct businesses. At least one building faced demolition, its red-brick walls destined for its 1921 foundation. This marked the unceremonious end of Iowa Wesleyan University, a 181-year-old institution that shut down in 2023 due to financial losses and student recruitment challenges.
“All the things that are mementos of the best four years of a lot of people’s lives are sold to the highest bidders” when a college closes, said Doug Moore, founding partner of a firm that has shut down four of them in the last few years, including Iowa Wesleyan.
More closures are anticipated as the number of 18-year-olds decreases, a trend that began with fewer births during the Great Recession. This demographic cliff, predicted for years, is expected to impact college enrollment as high school seniors numbers dwindle starting this year. It poses a significant threat not only to universities but also to the economy, as fewer graduates will be available for degree-required jobs. The problem exacerbates as international competitors grow their educated workforce.
Jeff Strohl from the Georgetown University Center on Education and the Workforce stated, “The impact of this is economic decline.” A new analysis by Ruffalo Noel Levitz projects another decline in 18-year-olds by 2033, falling 15% by 2039. The Western Interstate Commission for Higher Education reports the number of high school graduates will decrease by 13%, or nearly half a million, by 2041.
A college enrollment decline of 15% was already recorded between 2010 and 2021, according to the National Center for Education Statistics. The rate of college closures could increase, with 21 institutions defaulting on municipal bonds last year. Fitch categorized the higher education sector’s outlook as “deteriorating.”
For students, this means a buyer’s market, as colleges admit more applicants, and tuition declines. Yet, the potential closure of more colleges threatens the economy, risking job losses and economic impact. Nearly 4 million people work in higher education, and closures could mean significant economic consequences.
While colleges face an existential crisis, the implications extend beyond education. The U.S. ranks ninth among developed nations in post-secondary education attainment. Labor shortages loom, with an estimated six million fewer workers by 2032. Many jobs will require bachelor’s degrees by 2031, but the supply of qualified workers may not meet demand.
The semiconductor industry, for instance, struggles with labor shortages, affecting production timelines. The current situation mirrors post-World War II labor shortages, coinciding with retiring baby boomers.
Enrollment declines are worsened by decreasing perceptions of degree value. The proportion of high school graduates going straight to college fell from 70% in 2016 to 62% in 2022. The Hechinger Report provides in-depth educational reporting on these critical issues.
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