"America’s higher education system, long the envy of the world, is reaching a breaking point. Colleges are folding at a fast clip, while a growing number of people are questioning the value of getting expensive degrees from private schools that have consistently jacked up tuition costs."
Northeastern University has taken an unconventional approach to boosting its competitiveness in the elite higher education market by leveraging mergers and acquisitions (M&A), a tactic typically associated with the corporate world. In a landscape where smaller colleges are increasingly at risk due to financial pressures and declining enrollments, Northeastern’s strategy is reshaping how universities expand and evolve.
The 2021 merger with Mills College is a prime example. Facing financial difficulties and potential closure, the historically all-women’s college in California merged with Northeastern, bringing with it a $191 million endowment, valuable real estate, and a legacy of social justice and women’s leadership. This acquisition allowed Northeastern to extend its global network, adding a West Coast campus to its already robust offerings in cities like Boston and London. According to reports, "Northeastern took on Mills’ $21 million in liabilities but gained its land, endowment, and art collection" valued at over $1 billion (Northeastern Global News)(The Hustle Daily Newsletter).
This is part of a broader trend in higher education, with a growing number of institutions turning to mergers to survive. Over the last few years, there have been 95 college mergers, a 21% increase compared to the previous 18 years (The Hustle Daily Newsletter). As more small institutions face closure, experts predict that many could become acquisition targets, reshaping the academic landscape.
The appeal of these mergers is clear. They offer economies of scale, allowing for shared resources, expanded academic programs, and an enhanced brand reputation. In Northeastern's case, this strategy not only expanded its geographical footprint but also bolstered its offerings, increasing its appeal to a wider student base. The merger with Mills, for example, brought in students who value Mills' focus on social justice, which aligns with Northeastern’s commitment to experiential education and global impact (Northeastern Global News)(RBT CPAs, LLP).
This merger-driven growth strategy positions Northeastern as a forward-thinking institution that’s willing to adopt a corporate playbook to thrive in the increasingly competitive world of higher education. As one article notes, Northeastern is navigating “the brutal business of higher education,” with M&A as a key to building a global brand (The Hustle Daily Newsletter).
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