Dive Brief:

• Iowa Wesleyan University may soon be forced to close, its President Steven Titus announced in a letter to the university community, although a decision will be postponed until next week. The university, founded in 1842, is the oldest independent co-educational institution in the state and has about 570 students. 
• Titus said the university's board of directors will reconvene Nov. 15 after a "tremendously difficult" meeting last week about the university's funding gap. The university spent about $3.3 million more than it received in 2015, and it operated at a loss of roughly $4.6 million and $2.5 million in 2014 and 2013, respectively, according to tax records obtained by the Des Moines Register. 
• The college doubled enrollment and increased retention over the past five years, Titus noted, but it does not have a large endowment or donor network and several anticipated gifts did not materialize. The university is actively seeking other sources of funding as well as partnerships, and officials will confer with a federal agency, regional businesses and community leaders to explore funding options. 

Dive Insight:

Iowa Wesleyan is one small liberal arts college among many that have been struggling to stay open. While its enrollment has risen, that of many other colleges has declined, causing a drop in tuition revenue. These dwindling numbers can be partly attributed to a strong job market luring prospective students away and a shrinking pool of high school graduates, NPR reported.

These colleges can be especially vulnerable to enrollment declines because they often don't have sizable endowments to help make up for lost tuition dollars. Tuition makes up more than half (56%) of the revenue at private nonprofit colleges with fewer than 5,000 students, while it only accounts for 42% of revenue at larger universities, according to a 2016 report by the Parthenon-EY Education practice. Since 2016, at least 19 liberal arts colleges have shuttered entirely, closed major programs or consolidated, according to Education Dive's records.

In response to these challenges, some colleges have been slashing their sticker prices or offering more grants to attract students to their campuses. 

St. John's College, a small private institution with campuses in Maryland and New Mexico, trimmed $17,000 from its advertised tuition, which it plans to make up through fundraising efforts. Likewise, Birmingham-Southern College, in Alabama, cut its tuition by more than $18,000 for the 2018-19 academic year — a drop of more than 50% — though it also reduced its institutional aid by a similar dollar amount, AL.com reported, meaning students next year will pay about the same as they do currently. 

Moves like these may be hollow, experts say, because the net price students pay after applying federal or institutional aid doesn't necessarily change when the advertised price does. Birmingham-Southern officials told AL.com their goal was to improve transparency between published tuition prices and what students actually pay.

As colleges compete for students, the amount of grant aid they offer is on the rise. Average grant aid and federal education tax benefits has covered roughly 60% of published tuition and fees at private nonprofit four-year institutions since academic year 2010-11, up from about 45% from the academic year 1998-99 through 2007-08, according to a 2018 report by the College Board.