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MORE THAN HALF OF COLLEGES SHOW SIGNS OF MONEY PROBLEMS. STUDENTS
WILL SUFFER THE CONSEQUENCES  
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Marina Villeneuve
September 8, 2026
The Hechinger Report
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_ Many schools will resort to laying off faculty, cutting services
and increasing prices _

The University of New Hampshire is one of many schools across the
country that has cut back on services and laid off faculty due to
financial challenges., Credit: (AcrosstheAtlantic/Wikicommons)

 

LYNCHBURG, Va. — Nalia Mutz started her freshman year at the
University of Lynchburg in 2022 knowing exactly where she wanted to be
four years later: right on track toward her dream of becoming a
doctor.

When the university eliminated a dozen majors in 2024, the resulting
layoffs left fewer professors to teach the science courses she needed
to graduate. She began to fear earning her biomedicine degree the way
she’d planned could take two extra years. 

“It was just a lot of cuts all around, and then they just didn’t
have enough staff,” Mutz, 21, said.

Higher education has faced fiscal headwinds in recent years as
hundreds of institutions grapple with declining enrollment
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because of demographic trends and growing public
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skepticism about the value of a college degree. Trump policies
targeting international students
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and cutting federal research funding
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made the financial situation more dire, as have new caps to graduate
student loan borrowing and threats to block undergraduate programs
from accepting federal financial aid unless alumni earn more than a
typical high school graduate. 

As colleges tighten their belts, millions of students like Mutz feel
the consequences. Small, private nonprofit institutions that rely
heavily on tuition — like the University of Lynchburg — are likely
to be hit hardest.

While just a small fraction of colleges will end up closing, those
that survive may resort to cutting programs and staff, a move that
could balance the books but leave students adrift. Experts and
students themselves say it’s time to pay more attention to the
impact of college downsizing.

“The academic literature draws a straight line from student-faculty
ratios and advising supports 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.”

                                            The
University of Lynchburg spent at least $1.7 million to change its name
from Lynchburg College in 2018 to raise the institution’s stature
and attract more international students. Credit: (Marina
Villeneuve/The Hechinger Report)

A new interactive tool from The Hechinger Report, the College
Financial Health Tracker
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research whether a particular college is showing financial warning
signs: dropping enrollment, declining revenue, growing deficits and
shrinking endowments. The tracker also includes data on faculty
layoffs and cuts to academic programs, as well as accreditation
decisions. 

Hundreds of four-year colleges and universities show clear signs of
financial stress, according to Hechinger’s analysis of a decade of
federal higher education data for colleges primarily granting
bachelor’s degrees.

* Roughly 1,100 out of the 1,900 colleges in our dataset experienced
enrollment drops in three of the five years from 2019 to 2024, the
most recent year for which data is available. About 6.4 million
students attended these schools. 
* About 1,500 colleges saw net revenue from tuition drop from 2019
to 2024. 
* Roughly 960 institutions, enrolling 5.2 million students, had
75,600 fewer instructional staff in that period. 
* Nearly 440 colleges and universities reported ending the financial
year in the red in three of those five years. 

It can be hard for students and families to figure out how a college
is doing financially. Small colleges tend to provide limited
information
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about their finances in annual public reports. And unlike public
institutions, private nonprofits are exempt from public records laws
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Yet the tough choices colleges make to stay afloat directly affect
students. Meal plan costs can go up. Library hours may decrease. Staff
might not have the time to handle complaints about dorm conditions.
Cuts to academic advising staff can increase caseloads, which research
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worse graduation rates. 

Faculty make up the largest — and an increasing — portion of
college job cuts, federal data shows. Hechinger’s analysis found
private nonprofit institutions that cut instructional staff tended to
do so at a faster rate than their enrollments fell, leading to worse
faculty-to-student ratios. Layoffs can mean fewer professors to teach
classes, making it harder to graduate on time or in a chosen major.
Buyouts can mean fewer classes taught by the most experienced
faculty. 

And replacing tenured professors with instructors who have fewer job
protections could limit academic freedom and hurt the student learning
experience, said Tim Gibson, president of the Virginia conference of
the American Association of University Professors, which filed a
complaint
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in February 2025 protesting cuts at the University of Lynchburg.  

“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 of communication at George Mason
University.

Scores of schools that Hechinger’s analysis flagged with warning
signs have cut staff and campus amenities to balance their budgets. 

At the University of New Hampshire, officials closed
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the dining hall on weekends, shut campus pharmacies, raised tuition
and laid off dozens of professors and staff members. Students have
protested the state legislature’s votes to further cut funding for
higher education.

Students at Meredith College
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in North Carolina are protesting layoffs they say have led to fewer
courses offered and the elimination of four dean positions.

Rhode Island’s Johnson & Wales University cut 91 faculty and staff
positions last year. Students have raised concerns about worsening
dorm conditions, the rising cost of laundry and meal plans, and a new
policy requiring students to live on campus for three years. 

RELATED: MORE THAN A QUARTER OF PRIVATE COLLEGES ARE AT RISK OF
CLOSING, NEW PROJECTION SHOWS
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And the University of Lynchburg cut, in all, 12 undergraduate majors,
25 minors and five graduate programs, as well as announced 40 staff
and 40 faculty reductions.

For most universities, financial troubles start with student
enrollment. Declines have been accelerating; in 2019, for instance,
about 1,050 colleges and universities — or 53 percent — had
experienced enrollment drops in three of the previous five years. By
2024, that figure rose to about 1,090 institutions — or 58 percent.
And public universities in particular are seeing steeper enrollment
declines: One in 3 public universities saw enrollment decline at least
10 percent from 2019 to 2024. That’s up nearly 50 percent from 1 in
4 in 2019. 

The problem is likely going to get worse. 

“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,” said Robert
K. Toutkoushian, a University of Georgia professor who specializes in
economic analysis of higher education issues.

At Lynchburg, enrollment rose to nearly 3,600 in 2020, before dropping
to roughly 3,200 in 2024. University President Alison Morrison-Shetlar
declined to provide the latest enrollment figures.

The institution’s struggles offer a glimpse of what students at more
colleges may soon encounter. 

It ended four of the last five fiscal years at a deficit, reporting a
$2.1 million loss as of mid-2025, according to a financial audit.
Graduation rates have slipped: Fifty-seven percent of students seeking
bachelor’s degrees graduated within six years as of 2024. That’s
down from 66 percent in 2021, though similar to the 2014 rate, 56
percent. 

An accreditation body placed the university on warning in 2024 and
again in 2025 for its failure to meet standards for financial
responsibility and student outcomes. Morrison-Shetlar told
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accreditors she’s confident the university will reach full
compliance by December 2026. The accreditor did not respond to emails
or phone calls seeking comment.

The university’s board of trustees has shrunk 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 University of Lynchburg spent at least $1.7 million to change its
name from Lynchburg College in 2018 to raise the institution’s
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 to subsidize domestic ones is a popular
strategy; about 750 public and private not-for-profit colleges have
boosted enrollment of international students by at least 10 percent in
the past decade. But those efforts are in jeopardy as the Trump
administration pushes to make it harder for international students to
get visas.

Recently, the university launched certificate programs like one for
cannabis careers
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its first Ph.D. program
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and several three-year bachelor’s degree programs
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Morrison-Shetlar is focused on stabilizing the budget, launching a
fundraising
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campaign and “adding programs that are attracting more students
towards high-paying jobs, something that families are very, very aware
of these days,” she said. “They want to make sure that their kids
have a good job to go to and are well prepared for that job. And we do
that very, very well at the University of Lynchburg.”

Mutz enrolled there because it was near her hometown and offered a
better financial aid package than another local university. Her family
still took out about $10,000 a year in federal loans, but she hoped
that investment would be worth it as she pursued a biomedicine
major.  

Mutz said officials announced the 2024 cuts in a mass email to
students. “They did tell us you can still continue your degree
plan,” Mutz said. But she said university officials didn’t
acknowledge the cuts meant fewer in-person classes at the university
— and she didn’t receive any follow-up after that initial
email.  

Instead, students often learn new information first through the
student newspaper, The Critograph
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This year, student journalists reported about a recent and otherwise
unpublicized round of university-wide faculty
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buyouts. The newspaper also revealed
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that the university is down to just three academic advisers, compared
to seven previously. 

Morrison-Shetlar has said that students will still receive adequate
advising, but some students have already run into problems. Willow
Martin, a psychology major, received a surprising message from the
advising office this year — that she won’t be able to graduate on
time.

Willow Martin, a psychology major, received a surprising message from
the advising office this year — that she won’t be able to graduate
on time. Credit: (Marina Villeneuve/The Hechinger Report)

Martin, who expected to graduate in May, was told she needs 11 more
credits, including courses that she fears the buyouts will affect.

“I’m not really sure who’s going to teach my upper-level
psychology classes,” she said. “I’m not really sure what’s
going to happen.”

Meanwhile, Lynchburg has moved some undergraduate classes
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online. 

Morrison-Shetlar, who will retire at the end of June, said students
can take other classes through a regional consortium
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“All of the students work with their advisers to make sure that they
can graduate on time and that the classes that they need are
appropriately provided,” she said. 

Students said that is not the same as taking all their classes at
Lynchburg. Some have started voting with their feet. Thirty percent of
Lynchburg students transferred out in 2024, according to federal data
— up from 18 percent a decade ago.

Mutz tried to make it work at Lynchburg. She returned to campus in
fall 2024 for junior year, but “I didn’t really like the
environment,” she said. “The financial issues were a huge
contributor. We were paying, but we just weren’t getting enough
resources or benefits.”

She ended up transferring to Radford University, in southwest
Virginia. Even when she learned some of her core courses wouldn’t
transfer because they didn’t meet her new university’s standards,
she said it was the right choice to leave Lynchburg.

“All my friends that I know that went there transferred,” Mutz
said. “I don’t know anyone that graduated from there.”  

_Contact investigative reporter_ _Marina Villeneuve_
[[link removed]] _at
212-678-3430 or [email protected] or on Signal at
mvilleneuve.78_. 

_This story about __college cuts_
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was produced by_ The Hechinger Report [[link removed]]_,
a nonprofit, independent news organization focused on inequality and
innovation in education. Sign up for the_ _Hechinger newsletter_
[[link removed]]_._

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* financial crises
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