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Photo Illustration: Sarah Grillo. Photos via Jonathan Wiggs/The Boston Globe via Getty Images

Universities and colleges in the U.S. have been renovating and building up their aging campuses in hopes of wooing a dwindling number of students to enroll.

The big picture: Higher education institutions are banking on returns on these investments, but student enrollment has been trending downward for 8 consecutive semesters, shuttering 11 universities this year. "25 more are anticipating either closing or consolidating in the next four years," Education Dive reports.

What's happening: Investment in existing higher education facilities was at an 11-year high in 2018, according to a report last year by Sightlines that pulled data from 360 campuses.

  • Driven by ultra-low interest rates in recent years, colleges and universities borrowed a record $41.3 billion through municipal bonds (their principal source of debt funding).
  • That’s up from $28.7 billion a decade ago.

But the traditional revenue model of enrolling more students isn't supporting the new investments because of broader trends in the U.S.

  1. Booming economy: Adults haven't felt the need to go back to college to get re-skilled because the economy and jobs market have been thriving so far, according to Mikyung Ryu, director of research publications at National Student Clearinghouse Research Center, citing 2019 enrollment data.
  2. Low birth rate: There is a cyclical decline in the overall pipeline of 18-24-year-olds in the U.S.
  3. International student slump: Universities increasingly don't have the resources to help international students comply with Trump administration immigration changes, and are missing out on their out-of-state tuition dollars, per The Atlantic.
  4. Online education: There's a reduced demand for the space lecture halls and other facilities provide.
"You'll find this on almost every public university campus — we have aging laboratories, aging classrooms, aging of infrastructure of all kinds there that we can't afford to keep current."
— Daniel M. Johnson, author of "The Uncertain Future of American Higher Public Education: Student-Centered Strategies for Sustainability"

What they're doing:

  • The University of Denver Daniels College of Business created an “Angels in Residence” program where it offers angel investors an opportunity to have work space at the college in exchange for mentoring a student entrepreneurship team, per Stephen Haag, director of the entrepreneurship program.
  • Some state universities are heavily recruiting students who would have to pay higher out-of-state tuition, according to a 2019 study from the researchers at the University of California Los Angeles and the University of Arizona.
  • Large university systems — like the University of Wisconsin and the University of Georgia — are consolidating to cover costs. That could produce long-term returns if schools are proactive about mergers and they are not used as a last-ditch effort, according to a Teacher Insurance and Annuity Association of America report.

The bottom line: "The problem is there's no plan B," says Daniel Johnson, president emeritus of the University of Toledo.

  • "We're still working plan A and trying to milk plan A, which is the traditional model, when that tradition is undergoing serious stresses and strains and actually changing right now."

Go deeper:

Go deeper

Collins helps contractor before pro-Susan PAC gets donation

Sen. Susan Collins during her reelection campaign. Photo: Scott Eisen/Getty Images

A PAC backing Sen. Susan Collins in her high-stakes reelection campaign received $150,000 from an entity linked to the wife of a defense contractor whose firm Collins helped land a federal contract, new public records show.

Why it matters: The executive, Martin Kao of Honolulu, leaned heavily on his political connections to boost his business, federal prosecutors say in an ongoing criminal case against him. The donation linked to Kao was veiled until last week.

How cutting GOP corporate cash could backfire

Illustration: Aïda Amer/Axios

Companies pulling back on political donations, particularly to members of Congress who voted against certifying President Biden's election win, could inadvertently push Republicans to embrace their party's rightward fringe.

Why it matters: Scores of corporate PACs have paused, scaled back or entirely abandoned their political giving programs. While designed to distance those companies from events that coincided with this month's deadly siege on the U.S. Capitol, research suggests the moves could actually empower the far-right.

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Scoop: Kaine, Collins pitch Senate colleagues on censuring Trump

Sen. Tim Kaine speaks with Sen. Susan Collins. Photo: Andrew Harnik/AP via Getty Images

Sens. Tim Kaine and Susan Collins are privately pitching their colleagues on a bipartisan resolution censuring former President Trump, three sources familiar with the discussions tell Axios.

Why it matters: Senators are looking for a way to condemn Trump on the record as it becomes increasingly unlikely Democrats will obtain the 17 Republican votes needed to gain a conviction in his second impeachment.