More Than a Quarter of Private Colleges Face Potential Closure Amid Enrollment Crisis and Financial Strain

In the remote village of Craftsbury Common, Vermont, a dozen newborn lambs recently cavorted in a fenced yard under the watchful eyes of their mothers and a rotation of students. For decades, this 130-acre farm has served as the living laboratory for Sterling College, a tiny institution dedicated to environmental stewardship and rural arts. However, the successful birthing season, usually a symbol of renewal, now serves as a poignant backdrop to an institutional tragedy. Sterling College, an anchor of this isolated community where cell service is non-existent and passing cars are a rarity, has announced it will shutter its doors forever at the end of the current semester.

The closure of Sterling is not an isolated event but a harbinger of a massive tectonic shift in the American educational landscape. A new, sobering analysis by the Huron Consulting Group projects that 442 of the nation’s 1,700 private, nonprofit four-year colleges and universities are currently at risk of closing or being forced into mergers within the next decade. These institutions collectively serve approximately 670,000 students. According to the forecast, more than 120 of these schools occupy the "highest risk" category, characterized by dwindling enrollment, stagnant tuition revenue, mounting debt, and dangerously low cash reserves. Many, like Sterling, are small, rural, and lack the massive endowments necessary to weather a prolonged period of demographic and economic volatility.

The Human Cost of Institutional Instability

For students like LillyAnne Keeley, a senior at Sterling, the remoteness of the campus was its primary draw. Standing in the barn where she performs her chores, Keeley noted the beauty of the Vermont sunsets she once took for granted. Now, that beauty is tinged with the anxiety of a disappearing future. Keeley expressed deep concern for future students who, like her, may thrive in alternative, small-scale environments but will find their choices increasingly limited as the "monotonous type of education" offered by large universities becomes the only viable option.

The disruption for students is often profound. Data from the State Higher Education Executive Officers Association (SHEEO) indicates that fewer than half of the students displaced by a college closure actually continue their education elsewhere. Those who do attempt to transfer often find themselves in a bureaucratic nightmare, losing credits they have already paid for and earned. Ultimately, fewer than 50 percent of students from closed institutions ever complete their degrees.

The story of 20-year-old Izzy Johnson illustrates the compounded trauma of this trend. Johnson originally intended to attend a different college that closed just one month before his high school graduation. He subsequently enrolled at Sterling, only to be told within his first year that this institution, too, would cease operations. "Having to pick up everything and find a new place to settle down is really miserable," Johnson said, highlighting a cycle of instability that is becoming increasingly common for the modern American student.

A Chronology of Decline in the Green Mountain State

Sterling College marks the seventh private college in Vermont to close since 2016, following a path blazed by institutions such as Burlington College, the College of St. Joseph, Green Mountain College, Southern Vermont College, Marlboro College, and Goddard College. This regional trend provides a localized view of a national crisis.

Sterling’s specific decline was driven by numbers that simply failed to add up. Founded in 1958 as a boys’ preparatory school, the college transitioned into a specialized institution for environmental studies. While its enrollment peaked at a modest 120 students, that number plummeted to just 40 this year. President Scott Thomas noted that while the college had technically been breaking even according to recent financial filings, the margins were too thin to sustain operations in an era of rising costs.

Unlike many colleges that have shuttered abruptly—leaving students locked out of dorms with no notice—Sterling’s leadership opted for a planned "sunset" semester. This allowed students a final window to complete degrees or arrange transfers. Despite the looming closure, the campus atmosphere remained resilient. At a recent community meeting, students and staff in farm boots discussed mundane business, such as bear sightings and contact-sharing for post-graduation networking, maintaining a sense of normalcy until the final commencement in May.

Supporting Data: The Convergence of Economic and Demographic Pressures

The existential strain on higher education is the result of several converging factors that experts describe as a "perfect storm."

1. The Demographic Cliff: The United States is facing a sharp decline in the number of 18-year-olds, a result of the drop in birth rates that began during the Great Recession of 2008. This "demographic cliff" is expected to result in a continued downward slide in the college-age population through at least 2041.
2. Declining Participation Rates: The proportion of high school graduates choosing to enroll in college has dropped significantly, falling from 70 percent in 2016 to 61 percent in 2023.
3. Enrollment Totals: Nationally, there are 2.3 million fewer students enrolled in higher education today than there were in 2010.
4. International Student Decline: The number of visas issued for new, full-tuition-paying international students plummeted by 36 percent this year—a loss of nearly 100,000 students.
5. Regulatory Pressures: Upcoming federal caps on loans for graduate study, scheduled to take effect in July, threaten to choke off another vital revenue stream for universities that rely on graduate programs to subsidize undergraduate education.

Higher education consulting firm EAB warns that while institutions have survived short-term dips in the past, the current crisis is unique because every major revenue stream and expense category is under pressure simultaneously. A survey by the American Council on Education found that 86 percent of college leaders are worried about their schools’ long-term financial viability, and one-fifth of presidents have had serious discussions about merging with other institutions.

Broader Impact: From Prestige Universities to Rural Main Streets

The crisis is not confined to small, specialized schools. Prestigious, large-scale universities are also feeling the brunt of the financial squeeze. The University of Southern California (USC) recently issued layoff notices to more than 900 employees, while Stanford University cut at least 363 positions following significant budget deficits. Northwestern University eliminated 425 positions, and DePaul University laid off 114 staff members and closed its art museum, citing a sharp drop in international graduate enrollment and rising financial aid demands.

Institutional survival strategies have become increasingly drastic. George Washington University recently sold a satellite science and technology campus in Virginia to Amazon for $427 million to shore up its long-term financial health. In New Jersey, Rider University reached an agreement to sell one-fifth of its campus and lease back facilities to raise the $10 million needed to avert an immediate crisis.

For rural communities, the loss of a college is an economic and social catastrophe. In Craftsbury Common, Sterling College was more than an employer; it was a pipeline of young talent for a state with the third-oldest population in the nation. Graduates often stayed in the area to start businesses, such as Paul Lisai, who founded Sweet Rowen Farmstead, a creamery that employs local residents and supplies dairy products throughout New England.

"The impact is far beyond the local economic impact," Lisai said, noting that the college provided a community of like-minded individuals essential for a business’s success in a state with a 2.6 percent unemployment rate. "Losing colleges like Sterling leaves craters in the small rural communities that they have been a part of for decades."

Public and Community Colleges Under Threat

The financial contagion is also spreading to the public sector. The Fitch bond-rating agency reports that state funding for public universities is coming under unprecedented pressure as states grapple with rising costs for Medicaid and social services. Community colleges, which serve 5.6 million students, are also facing a "slow erosion of capacity," according to Daniel Greenstein, former chancellor of the Pennsylvania State System of Higher Education. While these schools may not collapse as suddenly as private colleges, their ability to respond to community needs is being systematically degraded.

Despite the dire statistics, the higher education sector faces a public that is increasingly skeptical of its value. After decades of tuition hikes that outpaced inflation by 40 percent, many consumers no longer believe the "payoff" of a degree justifies the debt. This skepticism has been exacerbated by political and cultural attacks on the ideological leanings of faculty and administrators. On social media, announcements of college closures are frequently met with comments cheering the "free market" or blaming "woke" policies for institutional failure.

However, for the students remaining at Sterling, the sentiment is one of profound gratitude rather than political grievance. Jack Beatson, a first-year student transferring to a school in upstate New York, emphasized the importance of feeling like part of a community where people depend on one another. As the lambs grow and the semester draws to a close, the students prepare to carry the lessons of Sterling with them, even as the physical institution vanishes from the Vermont landscape. The closure of Sterling College is a quiet end to a storied institution, but its resonance will be felt across the American educational system for years to come.