Three San Antonio universities face elevated risk of being forced to merge or shut down as a perfect storm of economic problems gathers over the world of higher education, according to a new study.
Our Lady of the Lake University (OLLU), the University of the Incarnate Word (UIW) and Texas A&M University-San Antonio (TAMUSA) are highly susceptible to financial and enrollment shocks, Colorado State University political science professor Kyle L. Saunders found in a new working paper. The schools also perform poorly in placing graduates in the evolving labor market, he found.
Neither UIW nor TAMUSA responded to the Current’s request for comment. However, an OLLU official dismissed the study, saying it was built with outdated numbers.
Saunders’ analysis examines which schools are best and least prepared to weather threats due to the rise of AI, dwindling enrollment and other market conditions. He categorizes those less able to adapt as “High Stress.”
Although the study doesn’t mean the High Stress institutions are at imminent risk of closure, it does suggest that the three Alamo City schools may face a harder time weathering the economic headwinds.
“High Stress is a structural diagnostic, not a closure prediction,” Saunders told the Current. “What it really captures is compound pressure, places where several structural conditions are cutting in the same direction at the same time.”
Trouble in higher ed
The threat of university closures amid the current turmoil is real.
Earlier this month, Hampshire College, a liberal arts college in Amherst, Massachusetts, revealed it would close its doors after the fall 2026 semester. The school placed special emphasis on self-directed and alternative educational methods.
Last week, another small New England liberal arts campus, Anna Maria College, announced it would close at the end of the spring 2026 semester after 80 years of operation.
Indeed, more than 89 colleges and universities have either closed or merged with other institutions since March 2020, according to Saunders’ research. With growing financial pressures and rising inflation dovetailing with lower enrollment, Saunders expects the trend to accelerate in coming years.
“The high school graduating class peaks in 2025 and is projected to decline roughly 13% by 2041, with
the steepest losses in the Northeast and Midwest; tuition discount rates at private nonprofits exceed 50%; pandemic-era federal relief is spent; and tuition growth has been at or below inflation since 2018,” Saunders said. “None of that improves on any horizon I can see.”
To document this trend, Saunders assembled his working paper — or, in academic speak, a yet-to-be-peer-reviewed scholarly article — by examining schools’ institutional resilience along with how well graduates fare in the rapidly changing job market.
To determine colleges’ resilience, the professor looked at whether they have the endowments, revenue diversification, enrollment trends and admissions selectivity to absorb the financial and enrollment shocks facing higher ed.
To determine campuses’ prospects for graduate job placement, he analyzed on-time degree completion rates, earnings-to-debt ratios for grads, exposure to artificial intelligence and demographic trajectories.
Using this data, OLLU, UIW and Texas A&M University-San Antonio all fell into the High Stress category, suggesting they’re among those facing the greatest risk of closure or merger in coming years.
Specifically, OLLU and UIW scored below the 50th percentile for revenue diversity, enrollment trends, completion rate, earnings-to-debt ratio for graduates and AI exposure.
TAMUSA, which opened in 2009, scored poorly on endowment per student, selectivity, completion rate and AI exposure. However, it racked up better scores than OLLU and UIW on revenue diversity, enrollment trends and graduate earnings-to-debt ratio.
“What pulls TAMUSA into High Stress is a very low six-year completion rate, in part because it’s a relatively young institution still building its outcomes profile,” Saunders said. “Those are different problems with different solutions.”
High Risk vs. High Capacity
Although those three Alamo City campuses face economic stress, the study found others here, including the University of Texas at San Antonio, St. Mary’s University and Trinity University are thriving.
All three of those schools landed in Saunders’ “High Capacity” category, meaning they are better equipped to address the challenges facing colleges and universities.
U.S. higher education is exhibiting a sharp “tier-level stratification,” according to Saunders’ research.
Colleges and universities classified as R1 Doctoral Universities, or those with a very high research activity, are far more likely to land in the “High Capacity” category, while those which primarily focus on undergraduate education and master’s degrees rather than PhDs face greater uncertainty.
Traditionally, research institutions tend to attract larger endowments than schools focused on undergrad education.
However, OLLU Provost Alan J. Silva took issue with Saunders’ research, describing it as dated and inaccurate.
“His study no longer reflects the reality of OLLU,” Silva told the Current. “His research draws upon data sources from 2024 and does not represent the significant changes OLLU has made in the past two years.”
Some of those changes include discontinuing 19 low-enrollment programs last year, a move some students told Texas Public Radio left them with no viable options to complete their degrees. OLLU this month also launched a “no-cost” five-year master’s program for eligible students.
Saunders acknowledged that his data is from 2024, adding that it doesn’t accurately reflect President Trump’s research funding cuts for colleges and universities.
“That’s a real limitation ,” Saunders said. “But it’s the best data we have.”
Former students of the three San Antonio campuses which Saunders’ paper identifies as High Risk said they’re not worried about the long-term prospects of their alma maters.
“As far as my career goes, no one has hired me because I went to UIW,” said John Puga, a member of that school’s Class of 2012. “They’ve hired me because I worked in the UIW library for eight years. That work experience has been the most valuable to me.”
Others said they were surprised their schools were identified as being at risk. Andres Jose Narvaez, who graduated from UIW in 2011, said he saw significant expansion of the campus and a growth in degree options while he was there.
“I’ve always known that growth was part of their strategy, but being landlocked in a very expensive part of town doesn’t help either,” he said.
Kelly Hernandez-Villarreal, a 2015 OLLU grad, said she wouldn’t be shocked if her alma mater closed its doors. Still, it would be a difficult blow given the education and career start she received.
“I’m not too surprised if OLLU were to close down, but it would definitely be devastating,” she said. “Their psychology department helped me decide to be a school psychologist, which is my career now. It made a huge impact on my career.”
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