Many colleges are in financial trouble. During the “fat years” of higher education (roughly 1970 through 2010), enrollments surged and money poured in. College officials added lots of new expenditures, but now that the tide is going out, they need to do something that’s hard: cutting costs.

In today’s Martin Center article, Chris Corrigan examines this problem.

He writes:

Based on their public pronouncements, many institutions are whistling past the graveyard on this issue, but the crisis is real. In 2020, the Hechinger Report conducted a ‘financial stress test’ on more than 2,600 institutions and reported that 500 of them exhibited financial warning signs. The Covid pandemic only made that stress worse. Mergers and failures are up significantly in the past few years. Between the 2017-18 and 2020-21 academic years, 579 institutions closed or merged, representing 8.7 percent of the total. These trends and warning signs might quickly turn into a crisis throughout higher education.

Since much of a college’s costs are fixed, it’s difficult to pare back in the face of declining revenue.

What can be done? Read the whole thing to see Corrigan’s ideas.