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Northeastern University’s Ambitious Expansion Plan

In Spring 2020, in the height of the Covid-19 pandemic, hundreds of universities in the US were forced to close their campuses, switch to online teaching, and university presidents were worried about the lack of funds caused by the loss of students. In a moment like this, the president of the Boston-based Northeastern University, Joseph Aoun, saw an opportunity.

On May 15, 2020, he called six university executives into his office for a meeting. "Most universities are going through unprecedented challenges now," he said, "but, that also makes it a good time for mergers and acquisitions."

Over the next few weeks, Northeastern put together a mergers and acquisitions team to assess the valuations and review the balance sheets of dozens of struggling universities in and outside the United States.

His vision became reality one year later, on June 30, when Northeastern merged with Mills College, a 170-year-old women's college on a 135-acre campus near Oakland, not far from Silicon Valley.

In Silicon Valley, California, where every inch of land is precious, the land value of this campus alone exceeds $1 billion.

Joseph Aoun, current president of Northeastern University, USA

(Source: WSJ)

The collapse of some US universities actually started before the pandemic. In the past 10 years, nearly 200 colleges in the United States have closed, three times as many during the previous decade!

According to statistics from the well-known consulting firm EY Parthenon, there have been 95 university mergers and acquisitions in the past four years, compared with 78 in the previous 18 years combined. Recently, Boston College also officially announced the acquisition of a university in the Boston area.

About 40% of college mergers in the United States involve private, not-for-profit schools, mostly merging with small and medium-sized colleges in the same state with fewer than 5,000 students.

The primary reason why many universities have closed down or been acquired is “ill run” under rising operating costs and low return on investment.

In 2019, 51% of U.S. adults considered a college degree "very important," down from 70% in 2013, according to a Gallup survey. Positive views of college among 18 to 29-year-olds fell the fastest, from 74% to 41%.

Another important external factor is that the well-known large-scale open online course platforms led by companies like Google and Coursera Inc., as well as the programming bootcamps that have blossomed in recent years, are now shaking the position of traditional universities in higher education. These platforms are popular because of their low tuition fees, employment-oriented teaching, and the fact that there’s no threshold for admission.

According to the National Student Clearinghouse, student enrollments at U.S. colleges and universities fell from 19.6 million in Spring 2011 to 17.5 million in Spring 2019. The COVID-19 pandemic has accelerated the decline in enrollment, to 16.2 million by Spring 2022.

For-profit colleges. community colleges and lesser-known private universities saw the biggest declines in enrollment. Lowering demand has prompted some schools to issue more scholarships and grants. According to the National Association of College Business Officials, in the 2021-22 academic year, on average, students themselves paid for 45.5% of college costs, an all-time low.

Northeastern University, located in Boston, is a national university with a history of only 124 years. In the midst of many well known schools with long history in the northeastern region of the US, it seems very young.

Now, Northeastern's famous Co-op program allows students to complete internships at one of more than 3,000 companies during their college education. This system forces the school's professors to constantly adapt their courses to meet the needs of different industries.

In the past, Northeastern University was best known for its two presidents, who spent decades helping the school once ranked 160 by US News become a Top 50 school.

However, today, Northeastern University has long passed the era of having to attract applicants by its ranking alone, and its admission rate has dropped below 7% in the last application cycle. In terms of admission rate alone, Northeastern University now belongs to the same tier as most selective schools like Harvard, Yale, Princeton, Stanford, MIT.

Source: Wikipedia

At the same time, looking at the admission data, the GPA and standardized test scores of students admitted by NEU are already on par with many universities in the Top 20.

As early as ten years ago, Northeastern University had already put its expansion plans beyond Boston. Over the past decade, Northeastern has opened campuses in Charlotte, NC; Portland, Oregon; Maine; San Francisco, CA; San Jose, CA; Seattle, WA; London, UK; Toronto, Canada; and Vancouver, Canada. A campus in Miami, Florida is under construction.

In addition to the mergers and acquisitions mentioned in this article, Mills College, Northeastern University has 3 campuses in the Silicon Valley area, and 11 campuses outside Boston!

After its merger with Northeastern University, Mills College will no longer be an undergraduate single-sex university. Several of Mills' signature majors, including women's studies, ethnic studies, art history and dance, were also eliminated entirely after the merger.

From now on, Northeastern University will award undergraduate degrees to existing Mills College students who have access to all Northeastern University campuses, courses, and internship resources.

Mills College will be renamed Mills College at Northeastern University, not unlike the well-known “Barnard College at Columbia University.”

(Source: Network Mills College)

To a certain extent, this merger and acquisition transaction has shaped the image of Northeastern University as "the savior of American universities on the brink of collapse". Northeastern University's spokesman, Mike Armi, said that more than 20 US universities have already contacted Northeastern University about potential acquisitions, offering to be merged by NEU.

Mike mentioned that because some universities are too far away or not in line with Northeastern's acquisition goals, NEU decided to not move forward with most schools. They are, however, currently in the process of negotiating with a liberal arts college on the east coast of the US.

As the pandemic continues to complicate the already recessing economy, college as an investment calls for more deliberation than ever. Colleges like Northeastern University are making the best of a crisis, and going out of its way to offer its students the most practical skills and opportunities in the demand. At Enlighteens, as a group of realistic idealist educators, we provide our best knowledge and assistance to help students find the overlap between their strengths and their goals in the changing world, with the bigger picture in mind.

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