Neil Lefkowitz on the Shifting Landscape of Higher Education M&A

Neil Lefkowitz, a Capital Markets & Corporate partner, delves into the increasing trend of mergers and acquisitions (M&A) among private nonprofit colleges and universities. The trend is driven by demographic shifts, rising educational costs, and competition from nontraditional education paths. There were over 40 mergers or closures of such institutions in the U.S. in 2024, with factors such as declining numbers of college-age Americans, geographical population losses, and increased education costs due to inflation playing significant roles. The article highlights that these educational M&As differ from typical transactions in terms of stakeholder protection, mission preservation, and ensuring deal completion, which involves multiple regulatory approvals. For-profit college M&A has been limited due to financing and regulatory complications. Newly emerging vehicles for M&A involve organizing private university systems as supporting organizations, which can offer economies of scale and reduced financing costs.