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In today’s issue: The college merger that suddenly wasn’t; re-engaging Gen Z; and the future of grad school.

The “Next Office Hour,” my regular webinar series, continues in the coming weeks with two free virtual events:

1️⃣ On Wednesday, March 19 at Noon ET/9 a.m. PT, we’ll talk about the explosive growth of dual enrollment and provide practical guidance for navigating these early college options for both high schools, parents, and institutions. Among my guests:

• John Fink, Senior Research Associate and Program Lead, Community College Research Center
• Susan Jackson, Deputy Superintendent for Curriculum and Instruction, Goose Creek School District (TX), and Vice President of the Texas Dual Credit Alliance

👉 Register now to join us live and to get an on-demand recording afterwards for free. (Presented with support from the Gates Foundation.)

2️⃣ On Thursday, April 3 at 2 p.m. ET/11 a.m. PT, the topic will be re-engaging the 37 million Americans with some college but no degree.

• More details to come, but you can register now join us live and to get an on-demand recording afterwards for free. (Presented with support from Cengage.)

THE LEAD

It seemed like the perfect marriage—until it wasn’t.

Two small colleges in Northwest Ohio, one with fewer than a thousand undergraduates, were to merge together. I heard about the marriage last summer while at the Mackinac Roundtable on Talent in Michigan. Sitting next to me at lunch was Jane Wood, president of Bluffton University, which was trying to combine with the University of Findlay, about 17 miles away.

There’s been a lot more talk in higher ed about mergers than action. In reality we’ve seen more college closures and outright acquisitions than true mergers.

That’s why I was excited to have Wood and her counterpart at Findlay, Kathy Fell, on the Future U. podcast to talk about the merger. Michael Horn and I interviewed the two presidents last month and the episode dropped earlier this week.

And then yesterday, news broke that the merger was off.

The University of Findlay Board of Trustees voted not to move forward on the merger application to its accreditor, the Higher Learning Commission. At Bluffton, Wood resigned as president.

It’s unclear exactly what happened, but sources told us that the lengthy timeline to approval was a factor. Beyond the accreditor, the big wild card was the U.S. Department of Education. As you’ll hear in the episode, both presidents were frustrated with how long it would take to get the feds to sign off.

“We could be waiting for 18 months to three years,” Fell told us on the podcast. “The issue with that is that we can do some things, but we are very limited in the things we can do.”

The protracted process clearly played a role at a time when there’s a lot of uncertainty about the direction of the Education Department—and when many small colleges don’t have much time to reverse declining enrollment and fill growing budget deficits. (More than 40% of private colleges ran a deficit in 2023).

The general consensus is that the U.S. has way too many colleges, especially when more than one-third of the market is made up of institutions with fewer than a thousand students. What interested me about the Bluffton-Findlay merger was that Bluffton was relatively financially stable when it approached Findlay about coming togther as one.

Most colleges with financial troubles know well in advance that they’re not on a sustainable path.

A decade ago, I worked on an analysis with Bain & Company where we looked at three metrics to measure the financial health of colleges: margins (i.e. profit), three-year enrollment trends, and reserves. We concluded a third of institutions weren’t financially sustainable if nothing changed. A decade later we returned to that analysis, and we found….nothing really changed. A third of colleges were still in a weak financial position.

The lesson of the failed Bluffton-Findlay merger is that colleges need at least a three-year runway if they’re going to combine. But M&A in higher ed isn’t like that in the corporate world. These aren’t factories that make widgets. This is more akin to what has happened in Catholic dioceses around the U.S. with parishes combining: colleges are places that people love so much they wear a sweatshirt advertising their alma mater decades after they’ve graduated.

These aren’t entities that are going to easily decide three years in advance they can’t make it for the long term.

In talking to Jane Wood at lunch last summer and then again for the podcast, one thing that struck me was that she realized Bluffton might survive, but it wouldn’t necessarily thrive.

“Like many organizations, we are not able to do many of the things that we would like to do in order to…be at our very best,” Wood told us. The college couldn’t fill positions, pay for faculty research, or give good raises.

“Of course, you want to be the president who comes in and saves the institution,” Wood said. “But even implementing great new ideas doesn’t change the fact that more and more students want free college… and more and more students are…struggling to afford college.”

What Wood and the Bluffton board did took “courage,” said Ricardo Azziz, who advised the two presidents and is about to come out with a second book on mergers in higher ed. Azziz joined me and Michael for the second half of the podcast. “That’s what we call the number seven and number one characteristic—you need to have the courage of your convictions and the courage to actually face what we call ugly news.”

In an email on Thursday night, Azziz wrote that this “unexpected turn of events” in Ohio shouldn’t be seen as putting a damper on mergers. Rather, he said, it indicates that mergers “take time” and the failure of the Bluffton-Findlay combination “is another indication that higher education leaders, especially those of smaller institutions, should start exploring these options well before they think they might need them.”

Yes, the Education Department is a hot mess right now. Its main research arm is effectively shuttered. It issued guidance this month with a broad interpretation of a Supreme Court decision on race-conscious admissions. And now official press releases quote Moms for Liberty.

But even as its very existence gets threatened, the department still has day-to-day tasks that need to get done. In higher ed, the department’s work in student aid gets most of the attention, as it should.

Yet the department’s outdated rules around mergers are hurting the very people they were meant to protect: students and taxpayers. The regulations were designed to reduce risk in transactions involving for-profits, which wanted to take over non-profits in order to essentially buy their accreditation and access to student aid.

The reality is that those are a very small proportion of transactions. There’s a greater need to improve the glidepath for non-profit colleges that want to merge with each other. And in the previous administration, officials were on the record as saying that even if “a merger is more appropriate…there are plenty of times when a closure is more practical.”

Really? Tell that to the students who were left scrambling to find a home after Wells College in New York or Birmingham-Southern in Alabama abruptly closed last spring.

Not all institutions should survive, but too many that could have had lasted with a partner will end up closing if the Education Department doesn’t start focusing on the work it’s supposed to be doing while it remains an agency.

Re-Engaging Gen Z

Disengagement among Gen Z teens is not new, but the gap between what’s taught in school and what’s happening in the real world has widened into a chasm.

By the numbers: 50% of Gen Z feel unprepared for life after graduation, said Jenny Anderson, co-author of The Disengaged Teen: Helping Kids Learn Better, Feel Better, and Live Better with Rebecca Winthrop. Anderson joined me last week on the “Next Office Hour.”

The big picture: Anderson explained that teens move through four learning modes—passenger, achiever, resistor, and explorer—with each reflecting different levels of engagement and agency.

• Passenger mode: Students coast along doing the bare minimum, often described as “lazy.”
• Achiever mode: Students excel at getting good grades but may develop perfectionist tendencies that make them fragile learners.
• Resistor mode: Students actively push back against learning through withdrawal or acting out.
• Explorer mode: Students find genuine interest in subjects, ask questions, and pursue learning independently.

Between the lines: Less than 4% of teens report having opportunities to engage in explorer mode at school, despite it being the most beneficial for performance, wellbeing, and social behavior.

Reality check: Technology isn’t the main culprit for disengagement, Anderson said. While smartphones amplify the problem, students were disengaged long before social media.

What parents can do:

• Stop nagging, which shuts down problem-solving parts of the brain
• Help teens identify what gets them into explorer mode
• Focus on the learning process rather than outcomes
• Recognize that parents still have significant influence, even with teens

The bottom line: “School does not need to suck,” Anderson said. Centering student experiences and making learning joyful isn’t just nice to have—it’s essential, and rigor and joy can coexist.

🖥️ Watch an on-demand recording of my complete interview with Anderson on the “Next Office Hour.”

SUPPLEMENTS

🎓The Future of Grad School. It’s in trouble, writes The Atlantic’s Ian Bogost. The University of Washington, the University of Pennsylvania, the University of Pittsburgh, and the University of Southern California have paused or cut their graduate admissions, at least temporarily because of freezes in federal dollars from the Trump Administration Because grad school trains the next generation of academics, Bogost writes, this means the future of the university itself is in trouble too. (The Atlantic, subscription required)

💳 College Prices and Debt. College attendance affects not just students’ finances, but also those of their parents, according to a new National Bureau of Economic Research working paper. The researchers found that when children attend college, parents shift their debt composition rather than increasing total debt—specifically increasing educational loans while decreasing credit cards and auto loans. Lower-income parents, in particular, take out more education loans, and actually see their credit scores rise as a result. When students get aid, parents reduce borrowing, including home equity loans. (National Bureau of Economic Research)

📍Education Deserts. Only 61% of rural 12- to 27-year-olds said they can get a college degree in their home region, compared to 77% of those from urban areas, according to a new survey from Gallup and the Walton Family Foundation. Among Gen Z adults who moved away from home, 57% said it was to attend college, making it the most common reason. Second was to pursue a good job at 34%. (Gallup)