School closures: The end of students’ educational dreams

Fewer than half of the 143,215 college and university students in the United States whose schools closed between 2004 and 2020 enrolled in another higher education institution, says the first study to examine the education path of these students.

Conducted jointly by the National Student Clearinghouse Research Center (NSCRC) and the State Higher Education Executive Officers Association (SHEEO), the study, A Dream Derailed? Investigating the Impacts of College Closures on Student Outcomes, showed that half of the colleges that closed were private for-profit two-year (junior) colleges while almost a third (28.1%) were private for-profit four-year colleges and universities.

Since these institutions enrol a disproportionate share of poor black and Latinx students relative to their proportion in the general population, a greater percentage of these underprivileged minority students (29.5%) experienced school closures than did white students who made up 25% of the students in the 467 schools that closed.

Only 47% of students whose schools closed continued their education by enrolling in another college or university and, of these students, only 37% continued on to graduation. Referring to these figures, Doug Shapiro, NSCRC’s vice-president of research, told a webinar in which he briefed the press on the study: “So their school’s closing effectively closed the doors on a student’s educational dreams.”

Type of closure

The type of closure, abrupt or orderly, varied greatly across the five sectors studied, and each type of closure affected the chances of whether students continued with their education.

Six-and-a-third percent of the private non-profit two-year colleges and 44.6% of the private for-profit two-year colleges closed without warning. Almost 10% of the private non-profit four-year colleges and universities in this study closed abruptly while 26% of the private for-profit four-year colleges and universities closed abruptly.

Students whose school closed in an orderly manner – ie, those that informed their students of the coming closure and included teach-out agreements allowing students to transfer to other schools – fared better than those students whose schools closed abruptly.

Irrespective of whether they were enrolled in for-profit four-year or private four-year colleges and universities, some 70% of students who experienced orderly school closure re-enrolled in another institution.

By contrast, those students whose schools closed abruptly – often so quickly that students could not access their transcripts – fared significantly worse. Of the students who had studied at colleges and universities in the private for-profit sector, only 42.4% re-enrolled.

A Dream Derailed found that the proportion of schools closing mirrored the distribution of private for-profit institutions across the country. The Rocky Mountain states, New England and the Southwest had the fewest college and university closures: 3.6%, 8.8% and 5.6%, respectively.

The rate of closures in the mid-Atlantic states, which include New York and Pennsylvania, was 10.5%, while in the Plains it was 12.6%. The percentages were similar for the Great Lakes states and the far west: 18% and just over 16%. The highest rate, almost 25%, was in the Southeast, one of the areas of the country with the largest number of private for-profit institutions.

While the study did not have the data to explain why primarily online institutions are more likely to have closed, it notes that many of the colleges and universities that closed provided primarily online instruction.

Gender breakdown

Of the more than 140,000 students captured in the study, women experienced school closure at a rate 11 percentage points higher than did men: 54.6% to 44.3%.

This is largely due to the fact that more women enrol in higher education than do men (60% to 40%) and to the fact that private for-profit colleges and universities often offer more flexible schedules that are attractive to women who have to juggle their education with childcare and other family responsibilities.

At 49%, the rate of women who re-enrol in a college or university is almost four percentage points higher than it is for men.

Of the 24,824 students who re-enrolled, just over a third graduated with a degree. Accordingly, there is an almost 20 percentage point difference in graduation rates for students who did not experience school closures and those who did. Some 65% of female students whose colleges and universities did not close earned their diploma while only 38% of those whose schools closed did. For male students, the figures are 59.9% and 39.3%.

Student profiles

Economically underprivileged students make up a disproportionate share of those who experienced school closures. More than half, 54.7%, of the student body of the colleges and universities that closed received Pell Grants, the federal grant made to the nation’s poorest students.

Older students experienced school closure more frequently than did younger students. Just over 17.5% of 18- to 20-year-olds and 22.3% of 21- to 24-year-olds saw their schools closed. By contrast, almost 40% of students who were 30 years old or more experienced school closure.

Re-enrolment declined with age, with the figure for the oldest group of students being 44%. By comparison, 54% of the 18- to 20-year-olds re-enrolled.

Since this study – the first of three planned studies – uses only institutional data provided by the Integrated Postsecondary Education Data System, the College Scorecard, the Postsecondary Education Participants System and the Federal Student Aid Data Center, it does not indicate any reasons why students chose to re-enrol or chose not to.

The second report will “quantify the causal effect of school closures using a control group of students who did not experience closures”, states the report.

Policy recommendations

Rachel Burns, a senior policy analyst at SHEEO, told the webinar the report’s findings have led NSCRC and SHEEO to make two policy recommendations to state higher education agencies, creditors and the federal Department of Education (the “regulatory triad”).

The first recommendation is that education authorities conduct financial trend analyses of for-profit higher education institutions and that these tests use multiple measures to assess the financial viability of these schools.

The second recommendation is that states ensure that teach-out agreements are in place to provide all students with a pathway for completing their credentials. These plans need to ensure the college or university that will absorb the students from a school that has closed is capable of completing the terms of the teach-out agreement and is financially viable.

Referring to the triad, Burns said: “They have both the authority and the responsibility to take actions to prevent closures, and ensure that state consumer protection laws are being enforced.”

Unfortunately, she added, “not all states are enforcing these regulations [designed to keep ‘bad actors’ from entering the post-secondary education market]. The findings in this report really provide evidence of the negative impacts of closure and strengthen the calls for improving enforcement.”