Financial Challenges Propel Closure of Major Colleges in Pennsylvania

A view of several Pennsylvania college campuses, illustrating the current financial challenges facing higher education institutions.

News Summary

Pennsylvania’s higher education landscape faces upheaval as several institutions, including Cabrini College and Clarks Summit University, announce closures due to financial struggles. Albright College reports a $20 million deficit, while Moravian University shows promising enrollment growth, showcasing the disparity within the state. These closures reflect broader trends of declining enrollments and the financial viability of private colleges, raising concerns about the future of higher education in Pennsylvania.

Allentown, Pennsylvania – The landscape of higher education in Pennsylvania has faced significant turmoil in 2024, as financial challenges have forced several institutions to close their doors. Notable among these closures are Cabrini College, Clarks Summit University, and the University of the Arts in Philadelphia. In a move expected to reshape the educational map, Penn State has also announced plans to close seven of its branch campuses, leaving Penn State-Lehigh Valley untouched.

Financial woes are not confined to closures. Albright College in Reading reported a staggering $20 million deficit, which has led to layoffs and drastic cuts in expenses. Rosemont College has reacted to its financial difficulties by utilizing a portion of its endowment, with current enrollment slightly above 750 students. This highlights the broader issues of dwindling student numbers in the wake of declining high school graduation rates and the ever-present effects of the COVID-19 pandemic on college enrollment.

The challenges faced by these institutions resonate throughout Pennsylvania’s private college sector. A review by local media revealed that four of the six private colleges and universities in the Lehigh Valley region — Cedar Crest College, DeSales University, Lafayette College, Lehigh University, Moravian University, and Muhlenberg College — reported deficits in their most recent tax filings from 2023 or 2024. Moravian University, however, presents a contrasting narrative, reporting a rebound in enrollment numbers since 2023, illustrating that some institutions are managing to rise above the adversity experienced by their peers.

Despite the struggles, private colleges in Pennsylvania have a profound impact on the local economy. According to the Association of Independent Colleges and Universities of Pennsylvania, the state’s 85 independent nonprofit colleges generate a remarkable $24 billion for the economy, which includes $1.1 billion in state and local taxes and supports nearly 200,000 jobs. In the Lehigh Valley alone, private colleges contribute $2.1 billion annually, translating to an additional $95 million in state and local tax revenue.

Moravian University’s enrollment has shown promising growth, increasing from 423 students in fall 2023 to an anticipated 527 in fall 2025, which stands in stark contrast to the overall statewide trend of declining enrollment figures. Similarly, DeSales University has managed to maintain stable finances during the pandemic, crediting its success to effective management and federal relief funds. Muhlenberg College has galvanized financial support, successfully raising over $125 million in its current campaign, while concentrating on budget restructuring and strategic planning to ensure future financial stability.

However, concerns loom over potential legislative changes regarding federal taxes on college endowments, which could severely impact smaller institutions reliant on these funds. The American Association of University Professors (AAUP) has raised alarms about the long-term viability of higher education in Pennsylvania, emphasizing that funding cuts and affordability issues are jeopardizing not only research but also workforce training.

Institutions such as Muhlenberg and DeSales are proactively addressing these challenges by enhancing student support services and expanding their program offerings. These strategies aim to attract more students and improve financial health amidst ongoing discussions about federal financial aid, which have created uncertainty surrounding college affordability and access for families.

As Pennsylvania’s higher education landscape continues to evolve, the combination of institutional diligence, community support, and strategic adaptations will be crucial for maintaining the vitality of private colleges in the state, ensuring they can provide quality education and vital contributions to the economy.