Universities and colleges across the country have been dealing with a ticking time bomb since the Great Recession, and a growing number of them are saying that it’s about to go off, next semester.
A series of announcements over the past month by the highest offices of U.S. universities read like an obituary to a higher learning model that no longer works for either students or the institutions tasked with teaching. And that obituary has been authored in slow motion by the declining birth rate of the last two decades.
“The fall 2026 enrollment shortfall carries real financial consequences—including a budget deficit, something the University has not experienced in quite some time,” he continued.
Aggregate enrollment data for next year won’t be available for months, but several schools have already missed their enrollment targets for next fall. A demographic clock determining college-aged student supply started ticking 18 years ago in the wake of the Great Recession, when insecure American households decided to put off having children. With the eldest of that cohort now of college age, schools are having to pay for those decisions taken almost two decades ago. As one university president put it recently, it has left higher education at a “crossroads.”
“Forget the elite institutions. That’s not part of it,” Baum told Fortune. “If you’re enrolling 300 students, it’s going to be really tough to make it work, and so some of them will have to go out of business.”
“I believe we are now at a crossroads,” Scholz wrote. “These dynamics are not affecting just the University of Oregon: they represent a changing reality across higher education.”
But though many university provosts and presidents have pointed to geopolitical and policy factors Baum cautioned against interpreting the enrollment cliff as a cyclical struggle, particularly for smaller schools who are struggling to keep domestic enrollment numbers up anyway.
“There’s a decline in the number of high school graduates in this country,” she said. “This is not a surprise. We’ve seen this coming for a long time, but we’re now sort of getting to the point where it’s actually happening.”
Highly prestigious schools, including the Ivies or public systems with large endowments like the University of California, might be insulated from the demographic crisis, Baum said. Demand for spots in these institutions is likely to stay high, and schools will keep having their picks of students.
But while larger institutions or even smaller, specialized ones might creatively patch over their financial woes, a greater reckoning is likely coming for small private schools peppered across the country. Dealing with high competition for enrollment and unable to amass the same financial resources as larger universities to pivot towards different audiences, many of these schools will have no option but to shut down.
“Most institutions don’t have significant endowments, but there are thousands of institutions—most of them you may never have heard of—that are tuition-dependent,” Baum said. “When they don’t have enough students, they’re in financial trouble.”
