The number of American high school graduates has peaked, signaling the start of a long-term decline in the student pipeline that could force hundreds of colleges to close by 2041.
According to a study from the Federal Reserve Bank of Philadelphia, approximately 60 colleges are closing each year. This number could double if enrollment numbers continue to plummet.
The crisis is driven by a 'demographic cliff,' a period of declining birth rates that will reduce the number of available students through the next two decades.
While elite national universities remain insulated by high demand, regional and local institutions face a shrinking customer base. This shift threatens to eliminate campus-based options for middle- and lower-income students who cannot afford to move.
The Rise of the 'Zombie Mall' Campus
Nicholas Hillman, a professor at the University of Wisconsin at Madison, says colleges facing dwindling local populations risk entering a 'doom loop.'
'When local options start to disappear, it can start a downward spiral,' Hillman said, noting that campuses can eventually resemble 'zombie malls' with fewer majors and students.
This trend is already reshaping institutional structures. In 2022, the Pennsylvania State System of Higher Education merged six campuses into two new institutions to manage declining enrollment.
Former chancellor Daniel Greenstein noted the system was operating as if it had 120,000 students when it actually only had 85,000. The merger preserved physical campuses but shifted many specialized courses to online-only formats.
However, digital alternatives may not prevent further enrollment drops. Michael Koppenheffer, a vice president at enrollment consulting firm EAB, said that 18-year-olds often forgo degrees entirely if they cannot access a traditional campus experience.
Data from the Department of Education shows that only 16 percent of undergraduates aged 15 to 23 took their entire degree program fully online during the 2019–20 academic year.
Geographic disparities are widening. While 38 states are projected to see a drop in high school graduates, only 10 states—mostly in the South—are expected to see growth. The Northeast and Midwest, which hold the highest density of colleges, face the steepest declines.
