A Tale of Two Trends
Across the world, a significant number of colleges and universities are facing immense financial pressure, leading to closures and mergers. This trend is driven by several factors, including declining birth rates in some countries, rising operational
costs, and a growing skepticism about the return on investment for certain degrees. Smaller, private institutions with lower endowments are particularly vulnerable. Since 2020, dozens of non-profit colleges have closed or merged, a trend accelerated by the pandemic's economic impact. For students at these institutions, the consequences can be severe; studies show that fewer than half of students at colleges that close continue their education elsewhere, and only a fraction of those eventually earn a degree.
The Indian Scenario: Growth and Consolidation
India presents a unique contrast to this global trend of shrinking enrolment. The nation's student enrolment in higher education has reached a record high, crossing 4.5 crore, driven by the National Education Policy (NEP) 2020 and a massive youth population aspiring for upward mobility. However, India is not entirely immune to the pressures of quality and viability. In recent years, the All India Council for Technical Education (AICTE) has approved the closure of dozens of engineering colleges due to low admissions and poor infrastructure. This suggests a market consolidation where demand is shifting towards institutions perceived to offer better quality and job prospects, while weaker players are forced to exit.
The New Definition of Institutional Quality
This brings us to the 'practical test' mentioned in the headline. Today, a high-quality institution is not just one with a good academic reputation. Quality now encompasses financial stability and institutional continuity. For students and parents making a significant investment of time and money, the question is no longer just, "Is this a good program?" but also, "Will this institution be here to see me graduate and will its degree hold value in the future?" Key markers of this new definition of quality include a diverse revenue stream (not just reliant on tuition), a healthy endowment, positive operating margins, and stable or growing enrolment trends.
How Students Can Assess a College's Viability
Choosing a college has now become an exercise in due diligence. Prospective students must learn to look beyond glossy brochures and campus tours. A crucial first step is to research the institution’s accreditation status and any public information about its financial health. In India, regulatory bodies like the University Grants Commission (UGC) play a role in setting standards and ensuring financial propriety, but transparency can vary. Students should look for warning signs like declining enrolment over several years, frequent changes in leadership, and news reports about financial struggles. Conversely, signs of a healthy institution include well-maintained facilities, reinvestment in academic programs, and strong graduate employment rates.
Future-Proofing Your Education Choice
The churn in the higher education sector is ultimately leading to a flight to quality. Students are becoming more discerning, gravitating towards institutions that are not only academically strong but also resilient and adaptable. This means favouring universities that innovate their programs to match labour market needs, such as in AI governance or climate analytics, and demonstrate a clear path to long-term sustainability. As the market corrects itself, the institutions that survive and thrive will be those that can prove their value proposition goes beyond a simple degree, offering a stable and enriching educational journey from admission to alumni status.
