One school closes, another lays off staff amidst recruitment crunch

'There just aren't enough students in their market,' says one expert

Small liberal arts institutions continue to feel the enrollment squeeze—and not all are able to avoid closure as Sweet Briar College was.

In the past four years, five colleges have closed annually, according to the National Center for Education Statistics. This year, four have said they will close and another has suspended operations. For example, Marian Court College announced last week it will close because of financial challenges.

Even colleges that are staying open are still experiencing major challenges. In Massachusetts, Gordon College is facing a $4 million budget shortfall over the next two years.

Could there be a "next Sweet Briar"? Read EAB's David Attis on the implications for other schools

The common theme is a struggle to meet enrollment goals. From fall 2010 to fall 2012, Gordon reported student body growth but failed to meet its freshmen targets by fall 2013. Meanwhile, Marian Court officials say their FTE enrollment dropped by about a third in 10 years.

New England has seen a long-term drop in high school graduates: from 2000 to 2010, the number of children in the region fell 6%.

"In the past schools have closed for reasons of the market. ... Now you're seeing schools close for reasons of finance," says Ken Redd, director of research and policy analysis for the National Association of College and University Business Officers. "Tuition revenue is declining, enrollment is declining...They could have the perfect model, they could be meeting the needs of students, but there just aren't enough students in their market," he says.

Chart: Enrollment growth slows down

Marian Court relied heavily on tuition—in fact, 87% of the school's revenue came from it. President Denise Hammon said she believed the school would remain open as recently as a month ago—but the combination of missed fall enrollment targets and a denied credit extension forced the closure.

"Our donor support has never been large... We've never had an endowment, we've had no rainy day fund. It all points back to low enrollment," Hammon says (Moore, Boston Business Journal, 6/19; Woodhouse, Inside Higher Ed, 6/18).

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