Many colleges and universities face financial problems

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For public universities, the big challenge is that states are withdrawing from higher education. In 1987, states paid about three-quarters of what public colleges spent on education; now they contribute about half. The rest must come from tuition fees.

By some measures, state taxpayer support for higher education hasn’t been this low since 1965, when there were 16 million fewer students in the system. As a result, public colleges joined cash-strapped private colleges in search of more students who could afford full freight. This has led many schools to recruit foreign students and caused public colleges to seek students from across state lines, who pay about twice as much as their in-state counterparts.

But the pool of students able to pay higher prices is showing signs of depletion. The economic crisis has left the median American family with no more wealth than it had in the early 1990s. Experts predict a decline in the number of well-off, well-prepared high school graduates — the type all colleges are looking for. An analysis by a small private college in the Northeast found that of the 4.3 million 18-year-olds in 2009, only 996 had above-average SAT scores, household incomes over $200,000 a year and had indicated that they wanted to attend a small private college in the Mid-Atlantic or Northeast regions. Of course, hundreds of colleges prey on these same students.

Despite evidence to the contrary, some colleges still believe that tough times are a temporary inconvenience — that eventually they will again be able to pass on their extra costs to students or get more money from state and federal governments. But the most informed and realistic higher education leaders realize that they are now living in a new normal.

The collapse of the economic model of higher education has been predicted many times before. Yet more colleges have opened than closed in the past 50 years. Perhaps the continued financial difficulties indicate that there are simply too many colleges for the market – or at least too many that, with their rock-climbing walls, lazy rivers and five-star dorms, are too similar in size. battle for prestige, and have lost sense of their mission. A thinning of the ranks could be long overdue.

Just because we believe colleges are a public trust and shouldn’t fail doesn’t mean they won’t.

Jeffrey J. Selingo is editor of The Chronicle of Higher Education. This essay is adapted from “College (Un)Bound: The Future of Higher Education and What It Means for Students,” which will be published May 7 by New Harvest.

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