As the higher education sector undergoes rapid transformation, higher education institutions (“IHEs”) are increasingly considering mergers and acquisitions (“M&A”) as strategic options. Economic, demographic, and political pressures, including declining enrollment, rising operational costs, competition from online education providers, and the looming “demographic cliff”, are prompting colleges and universities to view M&A as a part of their strategic toolkit. Heightened public scrutiny regarding the value of higher education, unpredictable state funding, and increased demands for IHE accountability for student outcomes have intensified the need for structural change at some institutions. Against this backdrop, M&A is not just a last resort for struggling colleges, but can be a proactive tool for healthy institutions looking to expand and diversify to ensure long-term sustainability.

Recent Examples Highlight an Emerging Trend

Two mergers in 2025 highlight both sides of the M&A approach for IHEs, and both follow a model where established, financially sound institutions look to bolster their regional presence and offerings by acquiring smaller institutions who may be struggling from a financial and enrollment perspective.

Elon University and Queens University of Charlotte

A merger between Elon University and Queens University of Charlotte was announced in September 2025. Queens had struggled in recent years with declining enrollment and mounting debt despite being located in the growing Charlotte metro area. Elon, on the other hand, has experienced increased enrollment at the graduate and undergraduate levels and a strengthened financial position. Against this backdrop, the merger provided Elon with a strong foothold into the attractive Charlotte market while giving Queens a financial lifeline and providing increased opportunities for its existing and future students.

The Elon/Queens merger is being executed by a “sprint team” comprised of representatives from each of Elon and Queens with a goal of Elon taking over operational control of Queens by August 2026.  The “sprint team” is an example of the consideration that must be given to transition matters when negotiating definitive agreements around an IHE transaction. IHE transactions typically involve a wider group of stakeholders than a corporate M&A transaction. Parties should consider potential issues early on in the negotiation process particularly relating to accreditation, debt and public communications.

Another key component of IHE transactions is negotiating post-closing governance. Board composition and transition mechanics are a key consideration in IHE mergers and parties should seek alignment on these crucial features early in the process to avoid uneven expectations as negotiations proceed. In the Elon/Queens merger, Queens’ board of trustees will continue to exist for four years post-merger to support Queens’ existing students. After this transition period, Elon’s current 37 member board will expand to be a combined Elon-Queens board with a total 47 members, 10 of whom will be associated with legacy Queens.

Villanova and Rosemont College

Villanova University announced in March 2025 that it was merging with  Rosemont College. Rosemont, another school in the metro Philadelphia area had faced a deteriorating financial position, including rising debt, along with enrollment challenges in recent years, a position that is not unique for small, tuition-dependent institutions. Combining  with a larger, stable partner offers Rosemont a way to preserve academic programs and provide continuity for existing students and staff. Villanova, operating from a position of financial strength, will gain opportunities for program expansion, an increased physical footprint and enrollment growth through the merger.  

Observers may note that Villanova has been particularly aggressive in the M&A market, with its Rosemont announcement following a 2023 acquisition of Cabrini University. Another signal of Villanova’s market strength is that Rosemont affiliates will receive two seats on Villanova’ Board of Trustees for ten years following the merger, which is significantly less than, for example, the Queens representation on Elon’s board, discussed above. In IHE M&A where a traditional “purchase price” is not typical, post-closing board composition can give a sense of the leverage between the two parties.

Considerations for Institutions of Higher Education Contemplating M&A Activity

As M&A activity accelerates, institutional leaders and legal advisors considering engaging in M&A should focus on:

• M&A and Strategic Alternatives: In addition to the “traditional” mergers described above, institutions may consider additional means of growing enrollment, revenue and generating positive student outcomes. Satellite campuses, new programs, consortium agreements and joint ventures all provide means of growth outside of “traditional” M&A.
• Due Diligence: Acquirers and targets will each want to conduct thorough due diligence on one another to understand the risks associated with a combination of any type. Financial diligence around cohort default rates, terms of debt, accreditation, and pending actions from students are particularly relevant in evaluating distressed institutions. 
• Plans for Stakeholder Engagement: Given the unique public facing nature of IHEs, parties should spend significant time in the negotiation process developing a clear communication plan around the announcement of any M&A activities. Conveying clear guidance regarding the combination to the students, faculty and staff at acquired institutions is crucial to ensure continuity and limited disruption throughout the period between signing and closing of any transaction.
• Governance and Structure: Select the legal structure (merger, acquisition, joint venture, etc.) most appropriate for regulatory and accreditor approval and operational integration.
• Liability and Risk Shifting: With many targets suffering a form of financial distress, the treatment of debt and other existing liabilities at a target is a key negotiation point in any higher education transaction involving a distressed institution. Parties should have a clear agreement on how existing liabilities will be treated in a transaction and how post-Closing liabilities will be minimized.

• Transition Planning and Regulatory Hurdles: The “sprint team” established in the Elon/Queens merger provides an example of a pre-developed approach to handling transition issues. Parties must spend significant front-end time aligning approach on key issues like accreditation bodies, combination of institutional departments and any reductions in staffing. Alignment on these issues prior to the signing of any definitive agreement allow for an expedited, efficient transition process in advance of Closing.

These are general recommendations and may not be suitable for every college or university. Institutions should work with legal counsel to develop their own considerations based on their unique campus environment, policies, practices, and applicable law.

Hunton Higher Education Team

Hunton’s Higher Education Team provides guidance on mergers, acquisitions, and real estate transactions. Hunton’s attorneys have experience guiding clients through due diligence, governance, accreditation, state and federal compliance, and institutional integration, as well as structuring and negotiating strategic transactions for IHEs. For advice specific to your institution, please contact your Hunton lawyer.