The Economics of Small US Colleges Are Faltering

Bloomberg

By Nic Querolo, Danielle Moran and Marie Patino

December 13, 2023

There are a handful of tell-tale signs a school is facing stress. Rider University, a landmark in central New Jersey for the past 158 years, has been grappling with most of them.

The school is losing money. Over the past decade, it has lost about a fifth of its student body. And this month, the outlook for its credit rating, already below investment grade, was cut to negative.

Gregory Dell’Omo, Rider’s president, has been working hard to stabilize the university’s finances. He’s laid off staff, cut programs, even put a crown jewel, the school’s Princeton campus, on the auction block. He’s optimistic as this year’s enrollment figures have shown early signs of growth. But he’s under no illusions. The economic and demographic forces stacked against small colleges — soaring costs and a dwindling pool of applicants — are altering the American higher-education landscape before his eyes.

“We’re all vying for a shrinking pool,” Dell’Omo said in an interview on Rider’s main campus, just outside of Trenton. “We live and die by demographics.’’

The school is one of about 170 small, nonprofit colleges and universities that met three or more of the five metrics Bloomberg News used to identify increasing pressures on higher-ed institutions through 2021. That number marked the highest point in at least 15 years and was more than five times the amount a decade earlier, according to Bloomberg’s review of over 100,000 data points from about 1,000 US schools with fewer than 5,000 students.

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