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Fewer Applications And Less Money: Why Some Colleges Are Merging

MARY LOUISE KELLY, HOST:

Students across the country are getting their college acceptance letters and deciding where to attend in the fall. Their choices could determine the fate of a number of colleges that are barely surviving. From NPR's daily economics podcast The Indicator from Planet Money, Stacey Vanek Smith and Paddy Hirsch explain.

STACEY VANEK SMITH, BYLINE: On the morning of April 6, 2018, Mackenzie Bumpus was on a mission. Mackenzie was student body president at Mount Ida, a small liberal arts college in Newton, Mass. And she had prepared a presentation for the business faculty about the school's athletes.

PADDY HIRSCH, BYLINE: And it was going really well, right? She was hitting her talking points. And then she felt this telltale buzz on her wrist.

MACKENZIE BUMPUS: I received a notification on my watch that we had gotten an email from the president.

HIRSCH: The president of Mount Ida College. Mackenzie got this weird feeling. She actually just stopped talking mid-presentation and read the email off of her watch.

BUMPUS: And I read that email, saw that school was closing.

VANEK SMITH: Mount Ida was closing. Well, it wasn't closing exactly. It was being acquired by the much larger, much wealthier University of Massachusetts.

JULIE FULTON: Because they're nonprofits, we tend to forget about colleges and universities being businesses.

VANEK SMITH: Julie Fulton is a college consultant and the owner of Mosaic College Prep.

FULTON: They have direct competitors, and they are trying to lure customers, who are the students and parents, with their offerings.

HIRSCH: Right now the college business is in crisis. For one thing, the pool of students is shrinking. Between 2025 and 2029, the number of college applicants is expected to decline by 15%. That means that colleges are scrambling to compete for a dwindling customer base.

VANEK SMITH: The average cost of one year of college in the U.S. is now more than $20,000 a year for public schools and about $50,000 a year for private schools. In spite of that really expensive tuition, a lot of schools across the country are having trouble balancing their books. And the COVID crisis has pushed many over the edge. With so much of college life online, a lot of students have taken a gap year, and many have opted for less expensive options.

HIRSCH: And Julie says something that's becoming more common is schools trying to make themselves attractive for a buyout.

FULTON: They use their best assets, which is their land and sometimes their established programs, to attract colleges to either partner with them or absorb them.

VANEK SMITH: This has been happening all over the place. So New England College bought up the New Hampshire Institute of Art.

HIRSCH: Boston University bought Wheelock, a small liberal arts college in Boston. And of course, in 2018, the University of Massachusetts bought Mount Ida.

VANEK SMITH: And a lot of colleges that are struggling are community colleges and some of the more regional campuses of large colleges. And those often allow students with families or students with full-time jobs or limited finances to get a college degree. And Julie worries a lot of those students could be left behind.

FULTON: Because if your local branch of your state college is shutting down, then you might not really have a four-year option in your neighborhood.

VANEK SMITH: Mackenzie, by the way, did finish her degree. She is in grad school now. But she says it still makes her kind of sad to think about her experience at Mount Ida. I mean, it was this place that meant so much to her, and it was just kind of erased off the map.

BUMPUS: There are just so many artifacts that I had from Mount Ida, like T-shirts and stuff, that they're so sentimental to me. So I made them into a blanket. Now it's one of those things where, like, I look back and I smile, and I think about all the good times that I had.

VANEK SMITH: Stacey Vanek Smith.

HIRSCH: Paddy Hirsch, NPR News. Transcript provided by NPR, Copyright NPR.