Small private institutions are slashing programs and laying off faculty, leaving students scrambling to finish degrees on time.
When Nalia Mutz began her studies at the University of Lynchburg in 2022, she envisioned herself earning a biomedicine degree and heading to medical school. Two years later, university-wide cuts eliminated twelve majors, triggering faculty layoffs that left her worried about accessing the science courses needed to graduate. “It was just a lot of cuts all around, and then they just didn’t have enough staff,” Mutz, now 21, said.
Financial Strain Across Higher Education
Mutz’s experience reflects a broader crisis gripping American higher education. Hundreds of four-year colleges are grappling with declining enrollment, driven by shifting demographics and growing public skepticism about the value of a college degree. Federal data analysed by the Hechinger Report reveals that roughly 1,100 of 1,900 bachelor’s-granting institutions in their dataset saw enrollment drops in three of the past five years, affecting about 6.4 million students.
Compounding these challenges, Trump administration policies targeting international students and reducing federal research funding have worsened the financial outlook. New restrictions on graduate student loan borrowing, coupled with threats to withdraw federal aid from undergraduate programmes whose alumni don’t outearn high school graduates, add further pressure.
“The academic literature draws a straight line from student-faculty ratios and advising support to what that means for students’ likelihood to persist and complete their college degree,” said Justin Ortagus, professor of higher education and public policy at the University of Texas at Austin. “It has a real impact on their ability to graduate.”
Cost-Cutting Measures Hit Students Hard
As institutions tighten budgets, students bear the brunt. Universities are raising tuition, reducing library hours, increasing meal plan costs, and cutting academic advising staff—measures that research links to lower graduation rates.
At the University of New Hampshire, weekend dining halls closed, campus pharmacies shut down, and dozens of professors were laid off. Students have taken to protesting state legislature votes that further reduce higher education funding. Similarly, Meredith College in North Carolina saw students protest layoffs they say have led to fewer course offerings and the elimination of four dean positions.
Rhode Island’s Johnson & Wales University cut 91 faculty and staff roles last year, prompting student concerns over deteriorating dorm conditions, rising laundry and meal plan costs, and a new policy mandating three-year on-campus residency. Meanwhile, the University of Lynchburg eliminated twelve majors, twenty-five minors, and five graduate programmes, alongside forty staff and forty faculty reductions.
Enrollment Decline and Accreditation Warnings
Most college financial troubles stem from falling enrollment. In 2019, 53% of surveyed institutions had experienced enrollment drops in three of the previous five years. By 2024, that figure rose to 58%, with public universities facing steeper declines—one in three reported at least a 10% drop from 2019 to 2024, up from one in four in 2019.
The University of Lynchburg’s struggles mirror this trend. Enrollment peaked at nearly 3,600 in 2020 before falling to roughly 3,200 in 2024. The institution ended four of the last five fiscal years in the red, reporting a $2.1 million loss as of mid-2025. Graduation rates have slipped: 57% of bachelor’s-seeking students graduated within six years in 2024, down from 66% in 2021.
An accreditation body placed the university on warning in both 2024 and 2025 for failing to meet financial responsibility and student outcome standards. President Alison Morrison-Shetlar expressed confidence in achieving full compliance by December 2026, though the accreditor did not respond to requests for comment.
Student Experience Deteriorates Amid Restructuring
Beyond programme cuts, students report reduced access to support services. At Lynchburg, student journalists revealed that the university had accepted unpublicised faculty buyouts and reduced academic advisers from seven to three.
“I’m not really sure who’s going to teach my upper-level psychology classes,” said Willow Martin, a psychology major who was informed she wouldn’t graduate on time due to missing credits. “I’m not really sure what’s going to happen.”
Morrison-Shetlar, set to retire at the end of June, maintains that students can still complete their degrees through a regional consortium and online coursework. However, many students disagree. Thirty percent of Lynchburg students transferred out in 2024, up from 18% a decade ago.
“All my friends that I know that went there transferred,” Mutz said. “I don’t know anyone that graduated from there.” She ultimately transferred to Radford University, despite some courses not meeting transfer credit requirements.
Broader Implications for US Higher Education
While only a small fraction of colleges will close outright, those that survive are likely to continue cutting programmes and staff. These moves may balance budgets but risk undermining educational quality and student success.
Experts warn that the combination of demographic shifts, policy changes, and institutional instability threatens to reshape the landscape of American higher education. As small, tuition-dependent colleges face mounting pressure, students and families are increasingly questioning whether the traditional four-year degree model remains viable.
Why it Matters
The financial instability of US colleges represents more than budgetary concern—it signals a systemic threat to educational equity and workforce development. When institutions cut programmes, reduce faculty, and raise costs, they disproportionately affect low-income students who rely heavily on financial aid and structured support systems. The ripple effects extend into healthcare, engineering, and other critical sectors that depend on a steady pipeline of graduates. With policy decisions accelerating these trends, the time has come for policymakers, educators, and communities to address the root causes of college affordability and sustainability before the crisis deepens.
