What’s Happening With Small Colleges in Michigan?

Written By Alexandria Zimmerman

The higher education landscape in Michigan is undergoing a period of visible change, particularly among small, private, regionally accredited colleges. Over the past several years, multiple long-standing institutions have closed or significantly altered their operations, reflecting broader national trends affecting postsecondary education. These shifts have introduced uncertainty for students and families navigating college decisions, as well as for high school counselors tasked with recommending institutions they believe will remain stable throughout a student’s academic journey.

Michigan has experienced several notable closures and restructurings that illustrate this trend. Marygrove College, a private Catholic institution in Detroit, ended its undergraduate programs in 2017 and fully closed by 2019 after prolonged enrollment declines and financial strain (Wikipedia, 2019). Finlandia University, based in Hancock, ceased operations following the 2022-2023 academic year and implemented teach-out agreements with partner institutions to support enrolled students in completing their degrees elsewhere (Minnesota Higher Education Facilities Authority, 2023). Concordia University Ann Arbor has not formally closed but has significantly reduced its academic footprint, cutting most on-campus and online programs after reporting substantial operating deficits (Higher Ed Dive, 2024). Most recently, Siena Heights University announced plans to close after the 2025-2026 academic year, citing declining enrollment, rising costs, and limited long-term financial sustainability (Michigan News Source, 2025).

While these developments are impactful at the local level, they are part of a broader national pattern. Across the United States, small private colleges - particularly tuition-dependent nonprofit institutions - have been disproportionately affected by enrollment declines and rising operational expenses. According to CNBC, colleges with smaller student populations and limited endowments are among the most financially vulnerable, especially in regions experiencing demographic contraction (CNBC, 2023). Michigan, which has seen a decrease in the number of traditional college-age students, is especially affected by these demographic shifts.

Several structural factors contribute to this environment. Undergraduate enrollment nationwide has declined steadily since its peak in 2012, influenced by demographic changes, growing skepticism about the return on investment of a degree, and the expansion of alternative education pathways such as online learning and workforce-aligned credentials (CNBC, 2023). At the same time, many small private colleges rely heavily on tuition revenue and lack the financial reserves or diversified income streams that allow institutions to absorb short-term enrollment losses. Rising costs related to staffing, compliance, facilities, and student support services further strain institutional budgets (ERIC, 2022).

For students currently enrolled - or considering enrollment - at institutions facing financial uncertainty, teach-out agreements often become a central concern. A teach-out agreement is a formal agreement that allows students to complete their academic program if their institution closes or discontinues their major. Accrediting agencies and regulators typically require these agreements as part of a closure or program discontinuation plan to protect students from academic disruption (ERIC, 2022). Teach-outs are intended to facilitate credit transfer and degree completion without forcing students to start over.

However, teach-out agreements also have limitations. Students are often limited to a select group of partner institutions, which may not offer the same academic focus, campus culture, or extracurricular opportunities as the original school. For student athletes, transfers may affect eligibility, scholarships, or competitive opportunities depending on governing athletic bodies. While teach-outs provide an important layer of protection, they do not guarantee a seamless or preferred transition.

Another common concern among students and families is whether a degree remains valid if an institution later closes. Degrees earned from regionally accredited institutions remain valid even after closure. Accreditation applies at the time the credential is awarded, and degrees are not retroactively invalidated due to institutional shutdowns (ERIC, 2022). Students who have already graduated retain their credentials, though future access to transcripts may require working through a designated records custodian.

As awareness of closures grows, families and counselors are increasingly attentive to indicators of financial instability. Persistent enrollment declines, significant program eliminations, repeated leadership turnover, and unusually high tuition discount rates are often cited as potential warning signs, particularly at institutions without large endowments or diversified revenue sources (Goedmo, 2024). While none of these indicators alone predict closure, taken together, they may signal elevated institutional risk.

At the same time, it is important to contextualize institutional risk within the broader value proposition of small private colleges. Many students continue to choose their institutions because of their small class sizes, close faculty mentorship, and strong sense of community. These colleges often emphasize personalized advising and mission-driven education in ways that resonate deeply with certain students. While sticker prices at private colleges are frequently high, many institutions offer substantial merit-based, athletic, performing arts, visit-based, and need-based scholarships. As a result, the net cost of attendance may be significantly lower than the advertised price and, in some cases, comparable to public institutions, depending on a student’s individual financial aid package.

Beyond their immediate effects on enrolled students, college closures also shape the remaining postsecondary marketplace. As institutions exit the landscape, remaining colleges - both public and private - often absorb displaced students, faculty, and programs, which can alter enrollment patterns and institutional strategies. This may increase competition among surviving institutions, particularly those seeking to attract students who value smaller learning environments and individualized academic support.

Closures can also contribute to increased program consolidation. When institutions close or discontinue majors, nearby colleges sometimes expand similar offerings to meet unmet demand. Over time, this can result in fewer redundant programs across a region but may also limit access to niche or specialized academic fields, particularly within the liberal arts or faith-based education. For students, this can mean clearer pathways in some disciplines alongside fewer choices in others.

At the same time, these shifts may accelerate interest in alternative postsecondary pathways, including community colleges, online universities, certificates, apprenticeships, and employer-aligned credentials. As families become more cautious about institutional stability, some students may prioritize pathways perceived as more flexible, lower-cost, or more directly tied to workforce outcomes. This does not signal the disappearance of traditional four-year degrees, but rather a more diversified and competitive postsecondary ecosystem in which institutions must clearly articulate their value.

Financial pressure may also influence how remaining private colleges approach pricing and aid. With heightened public scrutiny around closures, institutions may place greater emphasis on transparency around net price, scholarship renewal policies, and long-term program viability. For students, this may result in clearer financial communication, though it may also lead to more targeted or selective discounting strategies as colleges balance access with sustainability.

This highlights the role accreditation plays as a student protection mechanism. Regionally accredited institutions are subject to oversight by accrediting bodies and regulators that require contingency planning, including teach-out agreements and records preservation, when programs are discontinued or institutions close (U.S. Department of Education, 2022). These safeguards exist specifically to prevent students from being left without options if institutional circumstances change during their enrollment.

This is not always the case for institutions that lack recognized accreditation. In Michigan, for example, students enrolled at ITT Technical Institute, a for-profit institution that was nationally accredited rather than regionally accredited, were significantly impacted when the school abruptly closed in 2016. Campuses shut down mid-term, students lost access to coursework and transcripts, many credits failed to transfer to other institutions, and refunds were limited or delayed (U.S. Department of Education, 2017). While ITT Tech represents a specific and extreme case, it illustrates how students at institutions without strong accreditation oversight may face fewer protections when closures occur.

This does not mean that all non-regionally accredited institutions are illegitimate or unstable. Many offer high-quality education, particularly in short-term or workforce-focused formats. However, for larger investments - such as a four-year degree or multi-year graduate program - accreditation plays a critical role in ensuring transferability, degree recognition, and student protections if circumstances change. For shorter credentials, such as an eight-week certificate designed for immediate skill-building, accreditation may be less critical depending on students’ goals, employer expectations, and tolerance for risk.

For counselors and advisors, these dynamics are reshaping how college recommendations are framed. Conversations increasingly include questions about accreditation status, enrollment trends, program longevity, transfer policies, and contingency planning alongside traditional considerations such as academic fit and campus culture. This reflects not a loss of confidence in higher education, but a more informed and pragmatic approach to postsecondary decision-making.

Ultimately, the current environment represents a period of transition rather than collapse. College choice has always involved some degree of risk, but students pursuing accredited pathways are not without protections. Accreditation standards, teach-out requirements, and state and federal oversight mechanisms exist specifically to safeguard students during institutional change. Understanding how these systems function allows families to weigh risk appropriately rather than react out of fear.

The key takeaway is not that students should avoid small private colleges altogether, but that they should approach postsecondary decision-making with a clear understanding of institutional stability, accreditation status, financial realities, and contingency options. An unbiased view of postsecondary pathways acknowledges both the challenges facing higher education today and the enduring value many institutions continue to provide. 

References
Alexandria Zimmerman
Next

Credit, Credentials, and Transferability: What Students and Families Should Ask Before Choosing a Program