In 2024, an average of one college or university has closed every week, according to the State Higher Education Executive Officers Association, double the extinction rate of 2023. Though not a surprise – the American Association of Collegiate Registrars and Admissions Officers published a report in October 2020 predicting a rise in college closures because of shrinking budgets and reduced enrollment – the worsening situation is leaving increasing numbers of students with unfinished degrees and difficult-to-discharge debt.

Although the closure rate of one post-secondary institution per week seems high, the campus closure rate from 2014 through 2018 averaged 20 per month, according to an analysis performed by the Chronicle of Higher Education. Chronicle reporters Michael Vasquez and Dan Bauman noted that close to 90 percent of the closures during that period were for-profit institutions – some of which had dozens of campuses nationwide – and mainly affected working adults, including thousands of GI Bill participants.

However, the private college viability problem extends beyond the “for-profit implosion” covered by the Chronicle. U.S. college attendance figures have been declining since 2010–2011, when 29.5 million students were enrolled at postsecondary institutions, according to the National Center for Education Statistics. Enrollment during 2021–2022, the most recent year for which federal data is available, was 24.9 million, higher than 2001–2002 through 2006–2007. Rising expenses, due in part to inflation, are harder to meet in an environment of fewer college attendees, and private colleges around the country are cutting extracurricular and degree programs to make ends meet.

How are schools in the Lehigh Valley faring in the current environment? We took a look at enrollment and financial data for five local private colleges, two local community colleges, and the Lehigh Valley campus of Penn State University.

Mixed enrollment changes

Both Lehigh Carbon Community College and Northampton County Area Community College have fewer students than they did a decade ago, with 2022–2023 figures at 6,242 and 8,484 respectively. In 2013–2014, LCCC had more than 7,000 students enrolled, and NCC had over 10,000.

Some private colleges in the Lehigh Valley are faring well, with 2022–2023 undergraduate enrollment at Lafayette College, Lehigh University and Moravian University higher than it was in 2013–2014. DeSales University undergraduate enrollment is 10 percent lower (down from 2,486 to 2,225) over the same time span, and Muhlenberg College saw an 18 percent decline (from 2,397 to 1,959). Penn State’s Lehigh Valley campus had nearly identical enrollment figures in 2013–2014 and 2022–2023.

Near-universal increasing expenses

Inflation has hit postsecondary educational institutions as well as working families. Two of the schools covered here saw sizable increases in scholarship and aid expenditures over the most recent five-year period tracked by the Department of Education. LCCC spent more than $18 million on student aid in 2022–2023, up from just under $6.6 million in 2017–2018. Lehigh University increased its scholarship expenditure from $38.7 million to nearly $48.7 million over the same period.

Even for schools not dramatically increasing student aid, costs grew. Muhlenberg College is the only one of the eight schools we examined not to report an overall expense increase from 2017–2018 to 2022–2023. Although some budget line items grew, the institution reduced overall expenditures by cutting instructional, research and scholarship outlays.

Federal watchlist

Fewer students mean less money coming in the door for colleges, many of which have taken on large amounts of debt to finance building projects, provide financial aid to attract students, and in some cases, fund continuing operations. Federally collected debt data was only available for LCCC and NCC. NCC decreased its physical plant-related debt from $78.7 million in 2019–2020 to just under $64 million in 2021–2022. LCCC had no plant-related debt over the same period.

Uncovered in 2015 by the investigative team at Inside Higher Ed, the federal Department of Education maintains an internal list of postsecondary institutions subject to “heightened cash monitoring” (HCM). These schools do not meet the Department of Education’s standards in one or more areas, and are subject to a stricter process to access federal aid.

An official explanation of the two levels of HCM, as well as quarterly releases of institutions on the lists, is now available online from the federal government (studentaid.gov/data-center/school/hcm).

More than 400 schools are on the most recently released (December 2023) HCM list, 16 are based in Pa. Of these, nine are proprietary institutions, like the CDE Career Institute in Tannersville and the Fortis Institute in Scranton. Both of these schools are on the HCM1 list because of “financial responsibility” problems, defined as “School has a failing or a zone composite score or other concerns such as unreconciled accounts.”

Only one public institution is on the list: Cheyney University of Pennsylvania, which was placed on the more serious HCM2 list due to “administrative capability” issues. The Department of Education defines administrative capability problems as “Concerns about the institution’s ability to manage the Title IV programs including student file maintenance, record retention, and verification.”

No Lehigh Valley institutions are on either the HCM1 or HCM2 list.