Colleges at risk as enrollment falls and financial pressures mount

As college and university leaders returned to campus this fall, there have been new indicators {that a} long-building financial disaster could lastly be reaching a breaking level.

Closures and mergers are looming “at a pace we haven’t seen since the Great Recession,” stated Ted Mitchell, president of the American Council on Education.

The warning lights have been flashing for years. Fewer highschool graduates are enrolling in school and the general inhabitants of college-age college students is shrinking, a development specialists consult with as the “demographic cliff.”

Higher working prices and limitations on tuition will increase have restricted establishments’ means to raise revenue, in keeping with 2024 analysis by the Federal Reserve Bank of Philadelphia. Higher schooling as an entire is “facing serious financial headwinds,” the report stated.

And now, worldwide pupil enrollment is poised to drop off because of the Trump administration’s more durable visa guidelines and anti-immigrant insurance policies, representing billions of {dollars} in misplaced tuition and stripping away one among larger ed’s most dependable financial lifelines.

Add deep federal funding cuts, and the sector faces what Todd Wolfson, president of the American Association of University Professors, calls “a perfect storm.”

Collectively, with fewer college students and much less cash coming in, there are fewer sources for lecturers, applications, and most significantly, financial support. For many faculties, there could not even be sufficient funds to remain open.

Last September, the U.S. hosted greater than 1.2 million students from overseas, an all-time excessive, in keeping with the newest information by the U.S. Department of Homeland Security.

But in 2025, the variety of worldwide college students on many U.S. school campuses is instantly decreasing.

Largely because of the Trump administration‘s current adjustments to the scholar visa coverage — which deactivated and then reactivated the immigration standing of hundreds of scholars and put a short lived pause on new visa candidates — there could also be as many as 150,000 fewer international students enrolled for the 2025-26 educational yr, in keeping with preliminary projections by NAFSA: Association of International Educators.

That represents a 30%-40% drop in new college students from overseas and a 15% decline in complete worldwide pupil enrollment, amounting to a lack of practically $7 billion in financial affect, in keeping with the findings, that are primarily based partially on State Department information. 

“International student enrollments are down massively,” stated Wolfson.

Chris Glass, a professor and larger schooling specialist at Boston College, stated the NAFSA evaluation was according to his personal projection primarily based on purposes for F-1 student visas within the spring, which had been trending decrease even earlier than the pause on new candidates.

However, new government data means that the full variety of worldwide college students could not have declined to the extent NAFSA projected. “We just don’t know yet,” Glass stated.

At Drew University in Madison, N.J., about one-third of recent college students from overseas both withdrew or deferred this semester on account of visa denials or lack of appointments, in keeping with Hilary Link, Drew’s president. 

“For a small institution like Drew, we did see an impact,” Link stated. International college students — coming from 58 nations world wide — account for 14% of Drew’s complete enrollment of roughly 2,200 college students, in keeping with the varsity. 

Although worldwide undergraduate and graduate college students within the U.S. make up barely lower than 6% of the full U.S. larger schooling inhabitants, in keeping with the Institute of International Education, they’re an essential income for colleges. 

U.S. schools and universities want a contingent of international college students, who usually pay full tuition, along with enhancing the variety of views in lecture rooms and on campuses, Mitchell stated.

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Altogether, worldwide college students who studied within the U.S. contributed $46.1 billion to the U.S. financial system within the 2024-25 educational yr, in keeping with the latest information by NAFSA, together with tuition income as nicely as pupil spending, which extends nicely past larger schooling.

Those funds help schools’ means to supply financial support, Mitchell stated. “Full-paying international students pay scholarships for domestic students — it’s a 1-to-1 relationship.”

In truth, Harvard University, which has been at the forefront of the escalating battle over international student visas, banked a recent win over the White House, releasing up $2.2 billion in grant funds.

The nation’s most elite schools, together with the Ivy League, have massive endowments, a various pupil physique and a sophisticated pipeline of candidates that largely protect them from sudden shocks. “They can fill their entire class over and over and over again,” Beaton stated.

“These upper-tier schools are not without risk, but they have so many hedges against that risk they are more insulated from disruptions,” stated Boston College’s Glass. “They are going to be the most resilient.”

Alternatively, “there is a fair percentage of institutions essentially living month to month, or paycheck to paycheck,” Glass stated. Those much less aggressive and tuition-driven establishments are “extremely vulnerable,” he stated. “International students have been integrated into their enrollment strategy and their viability.”

Mid-tier colleges might also not be within the place to simply recruit different college students, he added. “The pipeline is constricted, exposing them to risk.”

Some “will feel the immediate pain,” he stated. Others “are going to bleed money, reallocate funds and see if they can survive.”

“It’s going to mean a lot of challenges for smaller, less wealthy institutions if the international student population declines and the domestic student population declines,” stated Drew’s Link.

“We all need to work harder and more creatively to think about the value of a degree from a U.S. institution in this moment and how we make higher education more accessible and desirable,” Link stated.

For many years, analysis has proven that getting a school diploma pays: College graduates earn considerably greater than these with only a highschool diploma. But along with larger earnings and higher employment prospects, getting a level is the ticket to social mobility, permitting graduates from various backgrounds to climb the financial ladder — a possibility that’s unmatched elsewhere.

Yet, at the moment’s pressures level to an period when fewer Americans go to varsity at all, and fewer schools are in enterprise.

“Declining international student enrollment is a piece of the larger puzzle undermining the financial health of higher education,” stated AAUP’s Wolfson. “What we are going to see is programs shut down, campuses shut down, smaller public or private institutions closing or merging and a curtailment of opportunities for our students.”

For now, Mitchell stated, “colleges and universities are not holding their breath” for a rebound in income. “They need to hit the cost side hard.”

“We are carefully monitoring all of our expenses, but we also know the next few years are going to be tough,” stated Laura Trombley, president of Southwestern University in Georgetown, Texas. Only about 7% of the varsity’s 1,434 college students come from abroad, she stated, so the affect has been minimal, up to now.

In occasions of financial stress, the primary cuts could be to the amenities finances, Trombley stated, adopted by under-enrolled educational applications — typically within the humanities — and then decreasing the variety of school and workers.

“You have levers to pull, but you don’t have that many levers,” Trombley stated.

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