Sterling’s planned wind-down, which allows a measure of orderly transition, highlights a larger crisis. Consulting firm Huron projects that roughly 442 of the nation’s ~1,700 private, nonprofit four-year colleges and universities — about 26% — are at risk of closing or being forced into mergers over the next decade, affecting an estimated 670,000 students. More than 120 institutions are placed in the highest-risk category. Huron based the forecast on enrollment trajectories, tuition revenue, assets, debt, cash reserves and other financial indicators. “We have too many seats. We have too many classrooms,” said Huron managing director Peter Stokes, predicting a wave of consolidation in five to ten years.
The consequences for students are immediate and often painful. Research from the State Higher Education Executive Officers Association finds that fewer than half of students enrolled at closed colleges continue their education; among those who do transfer, many lose credits and under half eventually complete degrees. Twenty-year-old Izzy Johnson — who had enrolled at Sterling after his first-choice school folded months earlier — now faces the prospect of moving again to finish a degree in agricultural and food systems. “Having to pick up everything and find a new place to settle down is really miserable,” he said.
Sterling is one of only nine U.S. “work colleges” that combine campus employment with academic credit. Its enrollment once peaked near 120 but was about 40 this year, a level the institution could not sustain despite previously operating near break-even. Sterling is the seventh private college in Vermont to close since 2016, a pattern that underscores the vulnerability of small, rural institutions.
Experts point to several long-term forces converging on higher education finances. The country has about 2.3 million fewer college students than in 2010, and falling birthrates mean the cohort of 18-year-olds is expected to shrink further through at least 2041. The share of high school graduates enrolling in college slipped from roughly 70% in 2016 to 61% in 2023. International enrollment has also weakened after a steep drop in visa issuance, cutting off a key source of full-tuition revenue. Anticipated limits on federal graduate student loan access threaten demand for graduate programs, another revenue stream.
“Every major revenue stream and expense category is under pressure at the same time,” the higher education consulting firm EAB warned. In a survey by the American Council on Education, nearly 86% of college and university leaders expressed concern about their institutions’ long-term financial health; separate polling found one in five presidents had held serious talks about merging with another school.
Financial stress is no longer limited to tiny private colleges. Research by Robert Kelchen indicates nearly a third of private, nonprofit colleges ran deficits in 2024. Public universities are feeling pressure too as state revenues falter and costs rise, prompting layoffs and asset sales at some large institutions. The University of Southern California cut more than 900 jobs; Stanford, Northwestern and DePaul have also reduced staff. George Washington University sold a satellite campus in Virginia as part of broader efforts to stabilize finances.
Community colleges, which enroll about 5.6 million students and serve as workforce and economic hubs, face strains as well. Analysts warn that even if outright collapses are less common among larger institutions, a gradual erosion of capacity would harm the communities that rely on them most.
Small-town losses can be deep. Alumni, students and faculty often stay and contribute locally by starting businesses, teaching, farming and raising families. Former student and current food-systems instructor Liz Chadwick noted that Sterling’s presence had long been woven into the community. President Scott Thomas said closures leave “craters in the small rural communities” that relied on their colleges for decades.
On Sterling’s campus this spring, students have tried to make the most of their final months. Farm chores, community meetings and an effort to finish well defined the semester, Keeley said. First-year student Jack Beatson, who plans to transfer to another small school, emphasized how much belonging at a small college mattered: “Just feeling like you’re really part of something, and other people depend on you — that’s very important to young people especially,” he said.
Public reaction to the wave of closures has been mixed. Some commentators frame them as inevitable market corrections or politically motivated consequences, while many students, faculty and alumni express gratitude for the close-knit educational experiences these colleges provided.
Industry analysts and leaders say adjustments, consolidations and strategic closures are likely unavoidable given current trends. Huron’s forecast, sector surveys and financial analyses together suggest a substantial portion of private, nonprofit higher education is vulnerable — with ripple effects for students, staff, faculty and the towns that host these schools. For those at Sterling, the end of the college also serves as a reminder of what they valued there. “I’m so glad I got to spend at least a year here,” Beatson said. “We’ll all take this place with us, wherever we end up.””}