The last year has seen a significant uptick in M&A activity and strategic partnerships as colleges seek to address systemic issues threatening long-term viability. Many of the most pressing issues have been exacerbated by the pandemic: flagging enrollment levels, lost revenue from housing and on-campus activity, and student access to name just a few. In these cases, consolidation is a logical remedy, and provide smaller institutions in particular an opportunity to create scale. The northeast has perhaps been the most concentrated example of this, with state schools in Connecticut, Pennsylvania, and Massachusetts pursuing various forms of consolidation either within their networks or with regional affiliates.
Most of these issues facing these institutions are more systemic in nature, however, and are unlikely to be solved through regional consolidation and cost-efficiencies alone. They also mask other major universal issues experienced by all segments of the higher-education sector:
These dynamics require more expansive strategic though as organizations approach partner planning. Institutions should consider the following strategic questions as they consider next steps to ensure both parties are able to maximize the value of the relationship, as well as the long-term health of the higher-education sector: