The Christian College Crisis

The Fate of Faith-Based Education

As the higher education industry gets increasingly crowded and complex, we’re seeing an ever-escalating rise in college closures, mergers, and acquisitions. 

One aspect of this reality, that has been much less discussed, is the disproportionate impact this market maturity is having specifically on Christian colleges and universities.

This was the topic of yesterday’s Higher Ed Pulse podcast, which I co-host with Mallory Wilsea, and something I wanted to expand on a bit further in this week’s newsletter. 

So What Is Going On Exactly?

Despite making up just 15% of today’s higher education market, Christian colleges and universities appear to make up over 50% of recent closures. 

In fact, when looking at 16 of the more prominent closures announced and/or implemented in 2023, we see that a whopping 75% of them are faith-based institutions.

And while the majority of closures from the past 20 years appear to be from the for-profit space, it’s increasingly clear that faith-based institutions appear to be closing at a rate that far exceeds that of their secular private and public peers. 

So What’s Behind The Rising Closures of Christian Colleges?

From my perspective, there are five primary factors behind why Christian colleges and universities are being disproportionately impacted. 

1. Declining Market Demand
   First, there is a looming demographic cliff, as we all know, that is resulting in fewer total traditional undergraduate students each year. This reality impacts not only faith-based institutions, but all private and public institutions that primarily serve traditional-aged students.
   

2. Increasing Price Pressure
   Second, at the same time that we are seeing declines in demand, there is mounting price pressure in the market. This increased price sensitivity disproportionately impacts private institutions, which by-and-large are priced higher than their public peers.
   

3. Shifting Market Factors
   Third, there is also a shift in the market away from traditional liberal arts programs, which faith-based institutions more-often-than-not offer, to more STEM-oriented offerings. While many Christian colleges do offer STEM programming, secular private institutions (e.g., MIT, Johns Hopkins) and larger publics (e.g., Berkeley, Georgia Tech) are most often associated with such academic offerings.
   

4. Increasingly Inefficient
   Increased competition and price pressure has led Christian colleges and universities to increase their discount rates, which has led to decreased operational efficiencies.

   

5. Declining Christianity
   Finally, and perhaps most impactful, is the reality that Christianity as a whole is in decline across the US, particularly among younger generations.

   

   This decline in self-identified Christians likely has a direct correlation to the decline in search volume for terms such as “Christian college,” which experienced a 15-year decline before bottoming out in recent years.

   

   
   

But I Thought Christian Colleges Were Growing?

Despite everything outlined above, you’d be forgiven if you actually thought Christian colleges and universities were growing.

Over the last few years, there have been many headlines about growth across the faith-based education space. However, much of these accolades appear to be self-reported and it’s clear - based on the rise of faith-based closures - that success does not abound for all Christian colleges and universities.

In fact, when you dig a bit deeper, it appears that at least for a subset of institutions, one avenue to maintaining or growing enrollment has been increasing institutional acceptance rates.

The below chart highlights changes to institutional acceptance rates over an eight year period for the “Top 5 Christian colleges” according to Niche, showing that for some growth may be as much about decreased selectivity as it is about increased demand.

To assess this hypothesis further, I googled “Christian college record applications” and compared acceptance rates for the institutions that came up at the top of Google News. In this case, four of the five institutions that have touted recent growth have significantly increased their acceptance rates in recent years.

Now this isn’t intended to knock these institutions for increasing their acceptance rates. If anything, I think increased acceptance rates are often a positive reflection of an institution expanding capacity in an effort to further their mission.

And there are no doubt Christian colleges and universities that are still successfully growing in today’s crowded market. In fact, nearly half of all of Kanahoma’s current partners are faith-based institutions; so we are seeing first-hand the kind of year-over-year growth that is still possible, even in a down market.

But that said, it’s worth calling out that if Christian colleges are disproportionately making up a majority of institutional closures and the majority of institutions that are growing are doing so by relying on record-high acceptance rates - as well as record-high aid packages - perhaps there’s a bigger problem here that is counter to the broader public narrative?

So What Are Faith-Based Institutions To Do?

For Christian colleges and universities facing this complex and competitive environment, there are several opportunities to consider when trying to navigate the market and drive incremental growth:

1. Diversify Your Revenue Streams
   First, from my own observation, the institutions that are successfully growing are doing so in part because they have successfully diversified their revenue streams.
   
   By offering both on campus and online programs that reach both traditional and non-traditional college students, across both undergraduate and graduate degree levels, institutions are able to minimize the downside associated with the looming demographic cliff and diversify their offerings in a manner that provides maximum opportunities for growth.
   

2. Differentiate Beyond Overarching Faith
   Second, it’s critical to understand that positioning on being faith-based alone is not an effective strategy. While many private, faith-based institutions are seeing students choose local publics in their place, there are no-doubt still many students who are choosing between Christian colleges and universities.

   
   That means positioning as a Christian institution isn’t enough, but rather institutions must be able to both differentiate their unique faith-based offering, as well as highlight key differentiators unrelated to the institution’s religious affiliation and integration.

3. Understand Your Audience
   To achieve the above, it’s paramount that institutions understand and are aligned around who they are striving to serve. Too many institutions get caught up in believing who they’re teaching needs to reflect who is teaching them; meaning the student population must perfectly mirror that of the faculty and administration. But there are ways to serve a broader student population without sliding into secularism and those that are navigating such a precarious path are finding themselves reaching and teaching a broader - and often growing - student population.
   

4. Hold the Line on Discounting
   Perhaps most challenging is the reality that Christian colleges and universities must hold the line on record discounting and find ways to maintain financial solvency with their offering. Growth at the expense of margin can only be an effective strategy for so long.

   
   While discounting may be a last-ditch effort to fill a class, our past research has shown that the market actually views private, Christian education as higher quality and as such are open to faith-based education commanding a higher price.
   

5. Increase Efficiency
   Finally, far from a strategy that is faith-specific, perhaps the most important thing a Christian college or university can do is focus on improving operational efficiency. Whether it’s more effective marketing, improved funnel conversion rates, or just increasing output from your existing resources, anything and everything that can be done to improve performance must be done, if the expectation internally is that you will continue to grow as the market continues to decline.

Conclusion

Despite how it may appear above, the intent of this week’s newsletter was not to present a doom-and-gloom narrative about faith-based education in America today.

There are indeed pockets of growth still present in this segment across our industry, including many of our own partners here at Kanahoma, who are experiencing year-over-year growth in new start volume.

That said, if you were to quickly read recent headlines about Christian post-secondary education, you may walk away believing that this is a sector experiencing significant growth and incremental opportunity.

Regrettably, as I’ve outlined above, I do not believe that to be the case.

As predominantly traditional educators, Christian colleges and universities are highly susceptible to the looming demographic cliff, which will result in fewer high school graduates and fewer incoming freshman in years to come.

As private institutions, Christian colleges and universities are on the wrong side of increasing price pressure in the market.

And as Christianity continues to decline nationwide, it’s probable that demand for Christian education will likely decline with it.

So perhaps it shouldn’t be a surprise after all that despite making up just 15% of the market, Christian colleges and universities appear to be making up north of 50% of recent closures.

But for those institutions still surviving, striving, and ideally thriving, what is a college to do?

From my own perspective, before we can achieve an ideal future state, we must first align around the realities of the present.

To that end, my hope is that this week’s newsletter serves as fodder for further discussion around the future of faith-based education.

It’s an area of the market I feel personally called to serve; one that I believe can be truly transformative - both personally and professionally; and one that I think is rightfully recognized as a cornerstone of American post-secondary education.

But if Christian colleges and universities are going to grow - both in enrollment and impact - we must face head on the realities of this present state, understand and be aligned around the headwinds we face, and strive to develop and deploy strategies that are distinct, that differentiate, and that above all are truly designed to deliver.

---

About The Author
Seth is the founder and CEO of Kanahoma, a San Diego-based performance marketing agency on a mission to build a better agency for organizations building a better world.

You can learn more about who we are and what we do at www.Kanahoma.com.