At least 16 colleges closed in 2025 and more could be coming this year. Higher education economists provided comments to The College Fix on what is driving these closures and what the future could look like.

The shutdowns followed 14 other closures in 2023 and 28 in 2024, according to data from Inside Higher Ed and the State Higher Education Executive Officers Association. 

Over the past eight years, more than 100 colleges have closed or merged, The Fix previously reported. A Federal Reserve study published in 2024 predicted 80 colleges would close in the next five years – meaning an average of 16 per year.

The closures are likely a long-term trend, according to Richard Vedder, an emeritus economics professor at Ohio University. He also is a senior fellow at the Independent Institute and has spent years studying higher education economics.

The number of colleges failing has not risen to “pandemic levels,” he said during a phone interview with The College Fix. However, the financial problems have grown significantly in the last five to ten years and “total college enrollment” has reached a “stagnation, even a decline.”

According to Vedder, declines are hitting states in the Northeast where there is overall population stagnation or decline. He cited Vermont, home to fewer than a million people, which has “had at least five college failures in the last two or three years.” 

Vedder noted that prestigious schools such as Harvard University are not suffering from closures because of a “flight to quality.” In other words, “colleges with good reputations are receiving applications like they always have; they are okay despite modest decline because they have five applicants for every admission.”

However, even elite universities face pressures of their own. Vedder said that these schools have been suffering from “cutbacks on federal grant monies” under the Trump administration, having historically “gotten a generous amount of money on top of whatever their research is as well as extra money called overhead expenses.”

By contrast, enrollment at southern schools such as the University of Alabama, the University of Mississippi, and the University of Florida is “booming,” Vedder said. 

“They’re turning down more students than ever. And because they’re usually a little bit cheaper.”  Vedder said strong Greek life and consistently warm weather also contribute to their appeal. This phenomenon has been reported elsewhere.

Vedder listed several reasons for the enrollment dip, including the view that high-paying jobs do not require a college education.

“From the first college in 1636 up to about 2010 there was almost a continuous increase in the desire of younger Americans to go to college,” he said. “Since then that belief has been diluted somewhat [because] we may have overproduced people in certain majors and underproduced other kind of skills that we need as a nation, [such as] plumbing and welding.”

This creates a financial ripple effect across colleges.

“As demand for colleges has fallen, tuition money has actually started to decline,” Vedder said. Therefore, “the stated sticker price of colleges has continued to go up a little bit.” This leads colleges to give bigger scholarships so that students will not go to rival schools. 

Ultimately, the increase in discounts leads to a revenue problem.

Declining population, heightened awareness about debt plays a role, economist says

Preston Cooper, senior fellow at the American Enterprise Institute, said it is certainly likely more colleges would close, based on current trends.

“It’s difficult to make predictions too far in the future, but there are several forces pointing towards more college closures,” Cooper said via email. He cited “a declining high-school-age population, greater student aversion to taking on debt, and more skepticism of higher education’s value proposition.”

“Financial strain due to enrollment losses seems like the most critical factor,” he said, agreeing with a statement by Vedder.

Small colleges might be hardest hit at first.

Cooper predicted that we are “likely to see a steady drip of closures, especially small private colleges where tuition may just be too expensive relative to the value that students perceive these institutions offer.” 

Vedder, the Ohio University economist, said some colleges will opt for mergers instead of complete closures to save face.

Vedder said that mergers are more likely, since it is “embarrassing” for colleges to announce closures. He added that one challenge is that colleges that merge are often far apart, such as Mills College in Oakland, California which merged with Northeastern University in Boston. 

“We might also see more mergers, though there could come a point at which mergers slow down because all of the ‘low hanging fruit’ mergers have already happened,” he said.

In order to avoid closures, Vedder suggested that colleges make bachelors degrees three years instead of the traditional four.

“Why does it take three years to get a bachelor’s degree at Oxford University and four years to get a degree at Oxford, Mississippi?” he said. “Why does it take a year more in the U.S? So maybe we ought to do a three-year degree.”

Vedder also argued that colleges should continue to eliminate DEI programs because they are “expensive” and “anti-meritorious.” 

He suggested that professors should spend more time teaching than doing research. 

“We’ve gone a little too far in pushing research,” he said. “And maybe teachers ought to teach more and have fewer professors teaching the same number of classes. You don’t need quite as many faculty.” 

“Colleges need to revamp and reshape themselves,” Vedder said. “The private business sector is doing it all the time.”

Cooper’s solution to future college closures was slightly different. “Students’ enrollment decisions are economic: they don’t want to pay excessive tuition and they want to get an education that will set them up well for life,” he said.

“Colleges should remember that demand curves slope downwards,” he said. “If they cut tuition, that will attract more students, and could lead to more tuition revenue in aggregate.”

The Fix reached out to the Council for Christian Colleges and Universities as well as the New America Foundation about the leading factor for college closures. Neither group responded to emails and a phone call in the past three weeks.