Financial Stress Hits Over Half of U.S. Colleges, Data Shows

More than half of U.S. Colleges and universities are showing signs of serious financial stress, according to a new analysis. The Hechinger Report's College Financial Health Tracker reveals hundreds of institutions are cutting programs and faculty, with students facing longer paths to graduation as a direct consequence.

Higher education faces fiscal headwinds from declining enrollment, public skepticism about degree value, and federal policy shifts. Small, private nonprofit institutions that rely heavily on tuition are likely to be hit hardest. While few colleges will close entirely, surviving institutions are balancing budgets through cuts that leave students adrift.

Tracking the Financial Warning Signs

The Hechinger Report analyzed a decade of federal data for colleges primarily granting bachelor's degrees. Its interactive tracker flags institutions with dropping enrollment, declining revenue, growing deficits, and shrinking endowments.

Justin Ortagus, a professor of higher education at the University of Texas at Austin, said the academic literature draws a straight line from student-faculty ratios and advising supports to students' likelihood to complete their degree. "It has a real impact on their ability to graduate," Ortagus stated.

How Cuts Directly Impact Students

Financial strain leads to tough choices that directly affect campus life. Meal plan costs can rise, library hours may decrease, and staff might not have time to handle dorm complaints. Cuts to academic advising increase caseloads, which research links to worse graduation rates.

Faculty make up the largest portion of college job cuts. The analysis found private nonprofits that cut instructional staff often did so faster than enrollments fell, worsening faculty-to-student ratios. Layoffs mean fewer professors to teach required classes, complicating on-time graduation. Buyouts can mean fewer classes taught by the most experienced faculty.

Tim Gibson, president of the Virginia conference of the American Association of University Professors, said replacing tenured professors with instructors who have fewer job protections could limit academic freedom. "Faculty in those positions tend to be very afraid of speaking out on matters of curriculum or governance issues, or pushing back," said Gibson, an associate professor at George Mason University.

Case Studies of Institutional Strain

Scores of schools flagged with warning signs have cut staff and amenities. The University of New Hampshire closed weekend dining halls, shut campus pharmacies, raised tuition, and laid off dozens. Students have protested state legislature votes to further cut higher education funding.

At Meredith College in North Carolina, students protest layoffs they say led to fewer courses and the elimination of four dean positions. Rhode Island's Johnson & Wales University cut 91 faculty and staff positions last year, with students raising concerns about worsening dorm conditions and rising costs.

The University of Lynchburg cut 12 undergraduate majors, 25 minors, five graduate programs, and announced 40 staff and 40 faculty reductions. Student Nalia Mutz, 21, began her freshman year in 2022 planning to become a doctor. After cuts left fewer professors to teach required science courses, she fears earning her biomedicine degree could take two extra years. "It was just a lot of cuts all around, and then they just didn't have enough staff," Mutz said.

The Enrollment Crisis Deepens

For most universities, financial troubles start with student enrollment. Declines have accelerated. In 2019, about 1,050 colleges (53 percent) had experienced enrollment drops in three of the previous five years. By 2024, that figure rose to about 1,090 institutions (58 percent).

Public universities are seeing steeper declines. One in three public universities saw enrollment decline at least 10 percent from 2019 to 2024, up nearly 50 percent from one in four in 2019.

Robert K. Toutkoushian, a University of Georgia professor specializing in higher education economics, said the problem will likely worsen. "Looking at demographic projections, with smaller high school graduating classes coming, it's going to be harder for them to compete for students and get enough bodies in the door," he said.

At Lynchburg, enrollment rose to nearly 3,600 in 2020 before dropping to roughly 3,200 in 2024. President Alison Morrison-Shetlar declined to provide the latest figures. The university ended four of the last five fiscal years at a deficit, reporting a $2.1 million loss as of mid-2025.

An accreditation body placed the university on warning in 2024 and 2025 for failing to meet standards for financial responsibility and student outcomes. Morrison-Shetlar told accreditors she's confident the university will reach full compliance by December 2026. The university's board of trustees shrank from 36 members in 2020 to 22. Former trustee Michael Gillette said he resigned in 2023 because administrators made key financial decisions without providing board members with budget documents. The university said it follows established governance procedures.

The institution spent at least $1.7 million to change its name from Lynchburg College in 2018 to raise its stature and attract more foreign students, who typically pay full price. Federal data shows the university had 249 international students (about 8 percent of the student body) in 2024, nearly quadruple the number in 2014. Appealing to foreign students is a popular strategy, with about 750 colleges boosting international enrollment by at least 10 percent in the past decade, but those efforts face jeopardy from Trump administration visa policies.