Big Take
Private Equity, But for Dying Universities
Sep 25, 2024
In this insightful discussion, Bloomberg reporter Francesca Maglione sheds light on the challenges facing American colleges, driven by rising tuition and declining high school graduates. She explores the surprising trend of mergers and acquisitions as a strategy for survival in higher education. Francesca reveals how institutions like Northeastern University are navigating these complexities, addressing both the potential and pitfalls of merging struggling schools. The conversation also dives into the cultural shifts and future implications of these partnerships in reshaping academia.
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Quick takeaways
- Skyrocketing tuition costs and a decline in high school graduates are pressuring smaller colleges to merge for survival amid an economic crisis.
- Northeastern University's aggressive strategy of acquiring struggling colleges aims to enhance enrollment and expand its presence despite challenges of cultural integration.
Deep dives
The Economic Crisis in Higher Education
American higher education is facing a significant economic crisis, exacerbated by a declining number of high school graduates. With predictions of a 10% decrease in graduates by 2037, colleges and universities are struggling to attract students, especially smaller institutions that lack the financial cushions of elite schools. As costs continue to rise, prospective students question the value of expensive degrees, prompting institutions to enhance offerings with more perks and amenities. This challenging landscape compels institutions to rethink their strategies to survive amidst a climate of declining enrollment.
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