The fiscal landscape of Pennsylvania’s higher education has been turbulent, with several institutions experiencing closures and financial challenges. Last year, Cabrini College, Clarks Summit University, and the University of the Arts shuttered their doors due to financial difficulties. This year, Penn State announced its plans to close seven branch campuses, although Penn State-Lehigh Valley is not among them.
The financial strain is not limited to public institutions. Albright College in Reading faced a daunting $20 million deficit, prompting layoffs, expense cuts, and the exploration of borrowing from its endowment. Similarly, Rosemont College, with its modest enrollment, had to dip into its endowment to sustain operations. The root causes of these challenges include declining enrollment, exacerbated by fewer high school graduates and the COVID-19 pandemic, which has pressured many institutions’ financial stability.
In the Lehigh Valley, private colleges and universities are navigating these financial waters with varying degrees of success. The Morning Call reached out to six institutions: Cedar Crest College, DeSales University, Lafayette College, Lehigh University, Moravian University, and Muhlenberg College. Responses from three of these institutions reveal a mix of deficits and surpluses.
Muhlenberg College reported a $10.3 million deficit in 2023, with revenues of $150 million against $161 million in expenses. DeSales University faced a $3.7 million deficit the same year, while Moravian University had a smaller deficit of $527,000. Cedar Crest College experienced a $409,000 deficit in 2024. Despite these challenges, Lehigh University and Lafayette College reported surpluses, with Lehigh achieving a notable $62 million surplus in 2023.
The role of these institutions extends beyond education; they are vital to the local economy. In an opinion piece, Thomas P. Foley, President of the Association of Independent Colleges and Universities of Pennsylvania, emphasized the economic contributions of private schools, which generate significant revenue and support thousands of jobs in the region.
The financial health of these institutions is a concern for the Pennsylvania chapter of the American Association of University Professors, which describes the current period as perilous for higher education. The potential impact of federal tax changes on college endowments adds another layer of uncertainty, with education leaders warning of possible financial repercussions for smaller institutions.
Despite these challenges, some schools are making strategic investments to secure their futures. Moravian University has seen an increase in enrollment, which is expected to reduce its deficit over time. Its investment in graduate programs has helped offset declines in undergraduate enrollment. Similarly, DeSales University has maintained stable finances, attributing its resilience to robust reserve funds and proactive financial planning.
Muhlenberg College has engaged in budget restructuring and strategic planning to enhance its value and ensure financial sustainability. The college is expanding its program offerings and pursuing capital projects to strengthen its position.
As these institutions navigate an uncertain future, they emphasize the importance of educating families about financial aid availability and managing potential disruptions caused by federal policy changes.
Note: This article is inspired by content from https://www.mcall.com/2025/06/20/financial-woes-are-causing-pa-private-colleges-to-lay-off-employees-or-shut-down-how-are-lehigh-valley-schools-finances/. It has been rephrased for originality. Images are credited to the original source.