Hundreds of U.S. colleges and universities are under severe financial strain, despite public focus on elite institutions. A national survey reveals that perceptions of higher education are skewed toward liberal bias and activism, overlooking prosaic challenges like rising costs and declining enrollment. This distortion obscures the sector's underlying vulnerabilities.
Public attention on higher education often centers on elite universities, but the reality for most institutions is far more precarious. A survey of over 30,000 respondents highlighted liberal bias, antisemitism, and political activism as top associations with universities, as one commentator noted: “graduates of a small cadre of elite universities disproportionately populate America’s leadership class and key institutions.” Another observed: “less than 1% of U.S. college students have attended an Ivy League university, yet these schools dominate employers, media and parents’ wishes. But why do we never hear of the other 99%?”
There are 2,661 public and private four-year colleges in the United States, excluding trade schools and nearly 1,500 community colleges. Since 2020, roughly 80 such institutions have closed, while hundreds more grapple with financial stress. Three major credit agencies have issued negative outlooks for the sector in 2026, pointing to declining enrollment, limits on federal loans, and barriers for international students.
The Composite Financial Index (CFI), developed by KPMG, measures health through operating performance, reserves, asset returns, and viability. Scores below 1.0 indicate stress, akin to living paycheck to paycheck. Aggregated data from reports, audits, and trends show hundreds of schools, some with tens of thousands of students, falling below this threshold. These tuition-dependent institutions often cut programs, lay off staff, defer maintenance, and hike prices to survive, lacking endowments and facing high debt.
Students bear the brunt: larger classes, fewer courses, reduced support services, and aging facilities. With $1.8 trillion in student debt and Bureau of Labor Statistics projections of 19 million annual job openings needing college degrees through 2033, questions arise about value. Gallup polls indicate confidence in higher education has dropped 40 percentage points since 2010.
Four shifts explain this: community colleges' rise, now 32–35% of enrollment and offering bachelor's in 150+ across 24 states; state budgets flipping from 6% to 3% for higher education by 2025 amid Medicaid's growth; a 15% projected drop in college-aged students by 2037, with enrollment falling from 21 million in 2010 to 19 million; and online learning's boom, with 10–11 million taking courses and 5 million fully online, growing at 14% annually through 2032.
This has bifurcated the system: cost-focused versus prestige-driven paths, leaving many in between fragile.
