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Radical Survival Strategies for Struggling Colleges

When Steve Thorsett crunched the numbers, things looked grim.

Mr. Thorsett is the president of Willamette University, part of a higher education sector grappling with a sharp decline in enrollment and financial challenges that cry out not for incremental change, but for radical solutions. Colleges and universities that fail to adapt risk joining the average of 11 per year that the bond-rating firm Moody’s says have shut down in the last three years.

Thanks, among other reasons, to a decline in the number of 18-year-olds and low unemployment luring potential students straight into the work force, enrollment is down by more than 2.9 million since the last peak, in the fall of 2011, according to the National Student Clearinghouse Research Center. More than 400 colleges and universities still had seats available for freshmen and transfer students after the traditional May 1 deadline to enroll for this fall, the National Association for College Admission Counseling reports.