[codingdave]

I admit to being an outsider to that industry, but I do have friends who are not, and they tell a different story. Yes, some universities in the US are as you describe. But not "nearly all". Small universities without large endowments are in the process of consolidating into large schools, or shutting down. Small colleges with reasonable endowments are up and running, but nervous, because they can see that they do have a runway to worry about.

In short, there is a spectrum of wealth in the education system just as there is with individuals and families. Anecdata from one of the wealthiest doesn't give a full picture of the entire system.

[bilbo0s]

>* Anecdata from one of the wealthiest doesn't give a full picture of the entire system....*

And in fairness, anecdata from those most poor doesn't give a full picture either. I'd argue that so called "non-profit" universities are indeed better off at the mean than is generally known.

Also, any university with a reasonable endowment, especially if it is small to boot, is not nervous in the least. The "nervous" set of universities would include, in this order, for-profit universities, small privates with small endowments, and large privates with small endowments. (The last category, large private-small endowment, should be all but dead. So if any are still out there they have something else going on. Maybe a good football or basketball team or something?)

I'd also add to this list small publics which have small endowments and are located in states with upcoming, or current, fiscal shortfalls. (Especially states with both, like Kansas, Wisconsin, etc). Though these universities are not so much "nervous" about going away, as they are "nervous" about what will happen when their states merge them together to streamline costs. I doubt most states would get rid of their small universities, even in lean economic times. (I could be wrong about that though? I just doubt it.)

[jessaustin]

Unfortunately, basketball fans will probably keep Kansas from being moved to Manhattan and merged with Kansas State.

[bradleyjg]

> Small colleges with reasonable endowments are up and running, but nervous, because they can see that they do have a runway to worry about.

But how did they get to a cost structure where they have to be so nervous? If they could keep costs to where they were in real terms 25 years ago they could charge less tuition (thereby making it easier to fill classes) and break even without dipping into the endowment.

Harvard can hire hundreds of overpaid administrators, build ugly buildings, and invest foolishly and it’s “only” a colossal waste of money. When Union College copies Harvard’s poor decision making there’s a lot less margin for error.

Just like in health care, insane cost growth is the whole ballgame.

[dmschulman]

> But how did they get to a cost structure where they have to be so nervous?

It's not necessarily the university's fault in every case and instead is due to the changing face of higher education in America. Many colleges and universities were able to rest on their laurels for decades as the American economy transitioned from a labor force to a variety of specialized jobs across many new and exciting fields (as well as specialized training in old fields too).

The jobs market is again shifting and has been for many years. College has become increasingly unaffordable due to institutional hubris and from the fact that many colleges have been focusing on the wrong priorities to attract new students (luxury dorms! exotic food! useless majors!). Alternatives to expensive college degrees have sprung up everywhere, and while many universities scoffed at the thought that these new types of education would be embraced by the public, the alarm bells are beginning to ring louder and louder as traditional institutions begin to see declines, not only in general enrollments but also in specific programs that have been popular for decades.

Some places can weather the storm as they have prestigious names or large endowments or illustrious alumni networks or great sports teams. Others have to pivot to embrace the idea that college has become too unaffordable and orient their institutions towards new ideas and programming that will bring in students. The problems higher ed faces does not 100% come down to institutional cost structure, but instead a reimagining of how one can achieve a college-level education without resorting to massive amounts of debt.