Collapsing Universities: How Does the Predicted Breakdown Begin?

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The Structure of Higher Education Collapse through U.S. University Closure Data, and the Danger Signals Already Facing Korean Universities

The closure of a university is always announced suddenly. The board of directors makes an urgent decision, and students and faculty are notified without preparation. However, following the data reveals that a closure is not a one-time event, but rather a structural consequence accumulated over several years. The common denominator among U.S. universities that have closed in recent decades is not a single decisive event, but a layering of declining enrollment, financial pressure, rigidity in cost structures, and changes in regional demographics. Closures only become visible in the final stage; in most cases, the institution has already entered an irreversible path long before then. This analysis of U.S. cases focuses on the structural question of “Under what conditions does a university enter a danger zone?” rather than the post-hoc question of “Why did the university close?” This goes beyond merely introducing overseas trends; it serves as a case study showing how the higher education system as a whole becomes vulnerable. Particularly, given that the conditions of a shrinking school-age population and financial pressure mirror the reality of Korean universities, this analysis is not a story of a distant land, but a warning of a process already underway.

Since 1996, U.S. University Closures Have Not Been the Exception

According to U.S. education data, more than 1,600 higher education institutions closed between 1996 and 2023. This is not a temporary crisis or a peculiar phenomenon of a specific period, but the result of structural changes sustained over a long duration. In particular, the closure rates for two-year colleges and for-profit universities were much higher than those for four-year non-profit universities. On the other hand, public four-year universities showed a relatively low closure rate, but this was less due to financial stability and more because adjustments were made through other methods such as mergers, restructuring, and functional transitions instead of closure. This difference has important implications. A low closure rate does not mean the sector is safe. Rather, for universities where public funds are invested, the crisis is more likely to be absorbed through organizational reorganization instead of “closure.” Conversely, private non-profit and for-profit universities, which are highly dependent on tuition, often lacked buffers against external shocks, leading crises directly to questions of existence. This structure overlaps with the reality faced by private universities in Korea, especially small and medium-sized regional universities.

The Income Structure Tied to Tuition Shook First

The most consistent risk factor found in U.S. university closure cases was the vulnerability of the income structure. Private non-profit and for-profit universities depend on tuition and fees for a significant portion of their finances. The moment student numbers drop, the university’s income base is immediately shaken. Since the pandemic, university enrollment in the U.S. has recovered centered on some top-tier universities and large public universities, but the decline in enrollment for small-scale and regional universities has been prolonged. This imbalance is not just a matter of student preference; it has created differences in structural viability. The problem is that the decline in enrollment does not end as a temporary phenomenon. Researchers point out that if a drop in enrollment persists for more than a few years, university finances begin to exceed the recoverable range. This is because cost structures are difficult to adjust in the short term. Despite the decrease in student numbers, faculty labor costs, facility maintenance costs, and administrative operation costs do not decrease significantly. Consequently, universities highly dependent on tuition cannot absorb the reduced income through internal adjustments, and financial deterioration accumulates rapidly. This structure is a vulnerability that Korean universities have also held for a long time.

The fact that a decrease in enrollment does not lead directly to cost reduction is a core structural problem of the university financial crisis. Even if student numbers decrease, a university’s cost structure is difficult to adjust in the short term. Not only faculty and staff salaries, but also campus maintenance and repair costs, administrative system operation costs, and various regulatory compliance costs are akin to fixed costs. Researchers analyze that, in particular, medical insurance premiums, the expansion of administrative support personnel, and indirect costs for regulatory compliance have pressured university finances in the long term. This is why expenditures do not automatically decrease even in a phase of declining student numbers.

This structure is even more fatal for smaller universities. Small universities have limited room for cost-cutting to begin with, and it is difficult to balance the finances simply by reducing a few departments or personnel. As a result, a decrease in enrollment leads directly to a financial deficit, and the deficit in turn creates a vicious cycle leading to worsening educational conditions and failure to attract students. What the research shows is that the intuition that “one can endure by getting smaller” does not work well in the reality of higher education. Unlike corporations, universities find it difficult to downsize or pivot quickly, and that delayed adjustment actually accelerates the pace of collapse.

University Closure is a Regional Issue, Not Just an Educational One

The impact of a university closure does not end within the campus. In U.S. cases, regions where closures occurred experienced employment decreases and a contraction in consumption in the short term, and in the long term, the regional demographic structure itself changed. This is because universities are not just educational institutions; they have served as major employers in the regional economy and key infrastructure for retaining the youth population. Researchers explain the ripple effect of a university closure on a local community as a “chain loss.” When a university disappears, jobs decrease, students and the young population leave, and local services and commercial districts contract together.

This point is directly linked to the problem of regional universities in Korea. The crisis of regional universities is a structural crisis intertwined with regional extinction, beyond the mere survival of a single institution. Even in the U.S., many regions where closures were concentrated were already experiencing population decline and industrial decay. The university was the last remaining “anchor institution” in the region, and its closure meant the loss of even that function. This analysis clearly shows that an approach that places university policy only within the category of education policy has limitations. The existence and exit of a university are difficult to handle separately from regional policy, employment policy, and population policy.

Where Did This Analysis Originate?

This article is based on the analysis titled “Colleges Are Closing. Who Might Be Next?” published in Education Next, a media outlet specializing in U.S. education policy. The piece tracks U.S. federal education statistics and closure data over a long period to structurally explain which universities are approaching the risk of closure and under what conditions. Notably, this analysis stands out because it goes beyond listing cases and includes an attempt to predict the possibility of closure by synthesizing financial, enrollment, and operational data of U.S. higher education institutions since the 1990s. While the original text was written based on the situation in the U.S., the risk factors and structures presented are not limited to a specific country. The tuition-dependent structure, cost systems centered on fixed costs, and the relationship between regional population changes and universities are already familiar conditions in the Korean higher education system. The reason this article is meaningful to Korean readers is that the structure that created those closures, rather than the U.S. cases themselves, overlaps with the present state of Korean universities. Therefore, this piece is less a translation of foreign news and more an attempt to examine the position of Korean higher education by borrowing an analytical framework.

Changes in the Way of Predicting ‘Who is Next’

The most striking point in this analysis is the way the risk of closure is explained. Instead of listing cases of specific universities, the original text estimated the possibility of closure through a predictive model that considers multiple variables simultaneously. These are familiar indicators when viewed individually—such as financial status, enrollment trends, university size, years since establishment, and regional characteristics—but the approach differs from previous ones in that it attempted to capture danger signals by combining them comprehensively. This is an attempt to treat closure not as an exceptional event, but as a statistically recurring structural phenomenon. What this approach suggests is clear: a university’s crisis is not explained by a single indicator. A temporary worsening of finances does not lead directly to closure, nor are all universities at the same risk level just because enrollment has decreased. Risk grows invisibly when several conditions accumulate simultaneously. This is why the researchers utilized machine learning techniques. Their purpose was to identify universities that have already entered the danger zone through patterns that are difficult to capture with human intuition or simple indicators. However, this prediction is a warning rather than a final decision. The researchers also emphasize that one should be cautious about interpreting the model’s results as a “closure list.” The purpose of the prediction is not to justify exits, but to enable early recognition of the fact that risk is accumulating structurally. This suggests that higher education policy must move from post-hoc response to proactive management.

The problem is not the accuracy of the prediction, but the absence of a response. What is confirmed in the U.S. cases is that even though danger signals appeared years ago, institutional responses were mostly discussed only after the decision to close. Issues such as student protection, credit transfers, compensation for withdrawal, staff relocation, and mitigating the impact on the local community were always handled too late. This is why closure can be interpreted as a result of “management failure” rather than just a “decision.”

This point raises important questions for Korean university policy as well. While the shrinking school-age population and financial pressure are recognized as predictable conditions, systematic proactive management or phased transition strategies for high-risk universities are not sufficiently organized. While selection and pressure through financial support projects exist, social consensus and institutional mechanisms on how to manage structural exits remain unfinished. The U.S. case clearly shows that closure is not a question of “whether it exists or not,” but a question of “how it is approaching and how to manage that process.” U.S. university closures are a universal result that appears when changes in population structure and vulnerability in financial structure are combined, rather than the result of a specific system or policy failure. The decline in the school-age population, tuition regulations, dependency on financial support projects, and the gap between regional and metropolitan areas are conditions already being experienced by Korean universities. The difference is that in the U.S., the result has already become visible in the form of closures, while Korea remains at the stage of managing that process. However, the direction itself is not much different.

Particularly, the conditions faced by small and medium-sized private regional universities are similar to those of high-risk universities in the U.S. They are highly dependent on tuition, find it difficult to secure external funding, and are directly affected by regional population decline. Adding to this, as financial support projects are designed around short-term results, the capacity to prepare for structural transitions is further limited. What the U.S. case suggests is that Korean universities, too, will find it difficult to reverse the crisis through individual efforts alone once a certain point is passed. Risk accumulates as a system problem, not an individual university problem.

Prevent Closure, or Manage It?

At this point, the question changes. It is not “Is it possible to keep all universities alive?” but “How will we manage the inevitable restructuring?” A recurring problem in the U.S. cases was that the process was conducted in a disorderly fashion rather than the closure itself. Student protection mechanisms were prepared post-hoc, and considerations for staff and the local community were also made too late. There were closures, but management strategies were absent.

There is a high possibility that a similar situation will be reproduced in Korea. Already, some universities have entered the danger zone in terms of freshman recruitment rates, financial soundness, and educational conditions. Nevertheless, discussions on restructuring often remain stuck in the dichotomy of “save or exit.” The message from the U.S. case is clear. The issue is not whether to exit, but the speed and method of transition, and how to manage the social costs incurred in that process.

The core of this analysis is that a university closure is not an exceptional event, but a predictable result. Danger signals are already present in the data, and structural conditions are sufficiently known. The U.S. cases merely confirmed this with numbers and models. The problem is how to interpret these warnings and what policy choices to lead them into. Although the original Education Next article analyzed in this piece deals with U.S. universities, its analytical framework is not confined to a specific country. Korean higher education stands before the same questions. Why do universities become dangerous, since when does that danger accumulate, and how prepared is society to manage that process? A higher education crisis does not arrive suddenly. However, the moment it is recognized as a crisis always arrives late.

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