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Grappling with mounting financial pressures and declining enrollments, an increasing number of institutions across the country are facing difficult decisions about their future, with some deciding that merging with another institution or shutting down completely is the only solution.
This news can come as a surprise, even to those at work or study at that institution, who often aren’t notified before it’s too late that their jobs or enrollments are in jeopardy.
“Many administrators wait too long to consider, much less actively plan to consider, a college or university merger, and that leads to closure,” said Jim Martin, senior consultant at The Registry, a ZRG Company, the nation’s largest provider of interim leaders in higher education. He has also co-authored books on institutional closures and mergers.
With at least 64 public or nonprofit colleges closing, merging, or announcing plans to do so since March 2020, the business of merging and closing has become a hot topic, as well as a complicated one, with no easy answer as to when it’s time to close doors for good or combine forces with another institution.
Martin, who also serves as a senior contributor to HigherEdJobs, said institutions considering merging or closing typically do so for a variety of reasons. Sometimes a school may not have adapted its programs for the present day, offering degrees that are no longer relevant in today’s world. And with enrollments, a main revenue source, lagging, a college sometimes has no other option than to take drastic measures like closing or merging with another institution.
“What I have seen…is that people wait until the college or university passes a critical point that may not be apparent to the leaders working there,” he said. “But in retrospect, they passed the point of no return” and are forced to close.
The implications for college closures are wide ranging for students, staff, and faculty. Students often do not transfer to another institution. One study by the State Higher Education Executive Officers Association estimated that less than half do so.
Faculty and staff are also affected, often left without jobs with little to no notice. (For instance, when the 150-year-old University of the Arts in Philadelphia closed its doors in June after losing accreditation, it gave the campus community a week’s notice. It now faces a spate of lawsuits, including from faculty who allege greater notice was required.)
“It’s more expensive to close a college than people realize,” Martin said. Among the costs are residence halls closing down, the loss of revenue from student enrollments, and extensive legal fees.
Given the large-scale implications and costs associated with closures, merging with another fiscally solvent institution may seem like an intriguing option. But it’s an opportunity that also requires lots of advance planning, Martin said.
“There is a proactive approach to mergers, certainly stronger than in decades before, in my experience,” Martin said.
There are several best practices institutions may want to consider when grappling with these decisions:
1. Merging Institutions Should Complement Each Other, Not Be Alike
“What you want in a merger is complementarity,” Martin said. “Sometimes a school is seeking a partner, and they naturally gravitate to another school that is like them…But don’t seek out a partner institution that is like you, that doesn’t work.”
For instance, while it might be appealing for two liberal arts colleges to merge because they have similar programs, that could be a problem if they also share the same weaknesses.
“There is a perception in our society that a merger forms two weak links in a chain,” he said, although that is misguided. A better example of a potential merger would be between one school that is strong in liberal arts or business, and another whose specialization is technical programs.
“Both schools are strong in their own ways but struggling to remain free-standing,” Martin said.
2. Think Critically About Geographic Limitations
Not surprisingly, a main consideration when merging institutions is geography. If campuses are too far apart, considerations will have to be made for how students will travel between the two, and how both will be served administratively.
Unless most of the courses are online, geographic proximity is a factor that cannot be ignored.
However, in recent years, some schools have pursued mergers with schools in other parts of the country. In May, Northeastern University in Boston agreed to merge with Manhattan Marymount College. In 2022, Mills College and Northeastern University merged, creating a new college in Oakland, Calif., on the opposite side of the country from Northeastern’s flagship campus in Boston.
“I’m noticing an increase in mergers with schools that are not geographically proximate,” Martin said.
3. Consider the Impact on Students and Different Administrative Areas
One of the most complicated issues to navigate when merging institutions can be considering the impact on students, faculty, staff, and institutional leadership.
“A merger can be a very smart plan to grow your enrollment, grow the talent in your administration, and build a stronger faculty base,” Martin said.
But institutions also need to be mindful if one institution is unionized and the other is not because the process can be more complicated from the start. In addition, considerations need to be made for what the executive leadership of the new institution will look like, as only one president is typically needed, Martin said.
“Presidents have to be savvy,” Martin said. “If they are going to merge, they need to consider what is going to happen to the executive leadership of both institutions.”
In an era of shifting demographics and increasing financial woes, the decision to merge or close a college is one of the most consequential choices institutional leaders can face. While considerations will vary depending on the institution, careful planning and strategic foresight are essential to navigating these complex transitions and ensuring the best possible outcomes for the campus community and institutions’ long-term legacies.
