Colleges across the nation are facing crisis.

This year, there were fewer students who went back to school. undergraduate enrollment down another 3.5% from last year, according to a report from the National Student Clearinghouse Research Center.

Combined with last autumn’s declines, the number of undergraduate students in college is now down 7.8% compared to two years ago — the largest two-year enrollment drop in the last 50 years, the report found.

There is, however, a wide disparity among schools, with less selective institutions — and those serving low- and middle-income students — seeing the biggest drop in enrollments.

Community college enrollment experienced the steepest declines, now down 15% since 2019, while highly selective colleges notched enrollment gains — up 3.1% — to return to pre-pandemic levels.

According to Sam Pollack (partner and senior member of NEPC’s Endowments and Foundations Practice), the consequences could lead to fewer students and lower tuition revenues.

A recent NEPC survey found that 62% of leaders in higher education said it is the greatest challenge they face.

Learn more about Personal Finance
Less than half of high schoolers want to go to a four-year college
Here are the colleges with the best return on investment
How to maximize your college financial aid

Already, several small schools were required to be accredited. shut down entirely.

Recently, Bloomfield College in New Jersey, which was founded in 1868, said it may be forced to closeAfter the current academic school year.

Bloomfield College has suffered a decade-long drop in enrollment,” Marcheta Evans, President of Bloomfield College wrote to the community. The pandemic has only exacerbated the financial problems.

She added, “And Bloomfield isn’t alone.” Judson CollegeAlabama Becker College in Massachusetts and Concordia College New York also plan to close, among others.

Meanwhile, some of the most elite institutions in the country are doing better and have the financial support to back it.

A small number of universities including those in the Ivy League experienced record breaking numbers this year. increase in applicationsand net revenue growth.

Pollack says that these schools reported records-breaking increases in endowments, largely because of investments made by venture capital or private equity. Some endowments saw a 50% increase.  

This has allowed universities like Princeton, Yale, Stanford, Stanford, and Yale to increase their financial aid offering, which lowers the costs and appeals to more students across the country.

Pollack stated that while they are sometimes portrayed as the bad guys, the majority of institutions working to benefit students are doing their best.

In reality, the top schools for financial aid are all private and their very generous aid packages can make them surprisingly affordable, despite the eye-popping sticker prices.

Pollack explained that “if the selective schools are able subsidize this cost, it becomes even more compelling” and it has large implications for the higher-education landscape.

At Yale, for example, tuition and fees plus books, room and board averaged $77,750 this year, according to data from The Princeton Review, but the average need-based scholarship award — or free money — was just over $59,000 bringing the total out-of-pocket cost down to roughly $22,000.

Robert Franek (editor-in-chief of The Princeton Review) stated that while the sticker price might seem intimidating, it is actually a reasonable amount.

It could be less costly than your public college.

Pollack stated that schools with lower resources are at greater risk of losing students and widening the gap.

Similar to what’s happening in the whole nation, “there is increasing bifurcation among the haves and the have nots” and this appears to also be true in higher educational.

Subscribe to CNBC on YouTube.