Shakeout Accelerates for China’s Private Colleges

China's private universities are undergoing a significant enrollment crisis, with a growing number of these institutions failing to attract sufficient first-year students, which foreshadows substantial changes in the nation's once-thriving private higher education sector. This issue became particularly acute following the 2025 national college entrance exams (“gaokao”), after which provinces such as Guangxi and Yunnan launched multiple, sometimes unprecedented, rounds of recruitment appeals to address widespread enrollment shortfalls. For example, Guangxi initiated a fourth round of undergraduate admissions without imposing any minimum test score requirements—a notable sign of desperation [para. 1][para. 2].

This crisis starkly contrasts with the high demand for new, research-focused private universities such as Fuyao University of Science and Technology, where admission thresholds have risen to levels comparable to those of elite public institutions [para. 3]. However, the overall situation is more severe than in previous years, with Guangdong province (an economic hub) seeing annual increases in the number of unfilled seats at private universities over the past five years. In 2025, over 14 private universities in Guangdong required supplemental admission rounds, some still reporting more than 2,000 empty seats even after three recruitment appeals [para. 4].

Industry experts warn that the problem is understated, as many students withdraw from these institutions after the academic year begins [para. 5]. Experts like Zhang Duanhong, from the 21st Century Education Research Institute and Tongji University, highlight that demographic changes and an oversupply in the higher education market are pushing low-quality, poorly managed institutions without competitive advantages towards closure [para. 6].

This crisis is the result of over two decades of rapid expansion: in 2002, China had only four degree-granting private undergraduate institutions; by June 2025, this number had ballooned to 411, making up more than a third of the nation’s total higher education institutions [para. 7]. Although the number of gaokao candidates grew for seven consecutive years before dipping slightly in 2025, a slowing economy and increased job market pressure have made families more cautious about private university education, evaluating their investments more critically [para. 8].

Tuition at private universities typically ranges from 20,000 to 50,000 yuan ($2,760–$6,900) per year, putting the total cost for a four-year degree between 200,000 and 400,000 yuan ($27,600–$55,200). However, these universities struggle to compete with public counterparts, lacking comparable research funding or faculty quality, and their graduates often face discrimination from employers [para. 9]. Private universities tend to serve students with middle-to-low gaokao scores but offer a curriculum copied from elite public institutions, leaving graduates with neither the academic capabilities of public university students nor the practical skills of vocational graduates [para. 10].

As public universities and vocational programs simultaneously expand, private institutions are further squeezed for applicants, leading to financial stress and faculty cuts. For example, at one Yunnan private university, the economics and management department lost half its staff in about a year after a government evaluation [para. 11][para. 12].

Not all private universities are struggling. Elite ones like Zhuhai College of Science and Technology rapidly fill their classes with high-scoring students [para. 14]. Some education companies, such as New Higher Education Group, report rising tuition and enrollment, while others, like China Education Holdings, experience both revenue growth and profit declines due to cost increases and enrollment challenges like mass “declined offers” by prospective students [para. 15][para. 16][para. 17]. These companies cite external pressures like demographic changes, rationalized spending, and tighter financial conditions as major challenges and intend to accelerate transformation to stay competitive [para. 18].

Looking to the future, experts anticipate the current shakeout will not only close institutions but also prompt consolidation and transformation, with smaller schools merging or pivoting to specialized vocational fields serving local industries [para. 19]. Private universities focusing on emerging fields—such as AI applications, elder-care management, or cross-border e-commerce—may survive by carving out competitive market niches. Differentiated competition is expected to be the key to their survival and development [para. 20].