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The thousands of college campuses that dot the American landscape have long been referred to collectively as a higher education system. It’s never been quite an apt description given the diversity of colleges we have. Increasingly the various types of institutions—from public flagships to selective liberal arts colleges—have very little, if anything, in common with each other. Much like American society is segregated by income and geography, so too is higher education.

The divides have only grown wider in recent years. Some campuses recovered from the Great Recession, but many are still struggling to fill classes and balance budgets. Two new reports on higher education underscore three troubling trends facing colleges and policymakers in the years ahead.

The rich keep getting richer. Combined, the 20 wealthiest private universities in the United States hold about $250 billion in assets. That accounts for a staggering 70 percent of the all the wealth of private colleges and universities, according to a new study by Moody’s Investors Services.

That wealth is likely only to grow as the richest colleges raise money at a faster clip than anyone else. Among colleges that collected more than $100 million in donations in 2016, fundraising has jumped by 22 percent over the last four years. Among those that raised less than $10 million, donations went up just 4 percent.

This concentration of wealth among a handful of campuses comes as they serve an ever smaller share of undergraduates. Even as the number of students going to college has risen over the last decade, total enrollment at elite institutions has remained relatively steady. At the same time, elite colleges are becoming more popular with applicants. The most selective institutions—those that accept fewer than half of applicants and represent only 20 percent of American higher education—account for about a third of all college applications.

“This consistent gap in wealth will pose increasing competitive challenges for institutions that do not have the resources to invest in facilities, financial aid and other strategic initiatives at the same level as their larger and wealthier counterparts,” Moody’s said.

Even among the richest universities there is growing separation between the very top and everyone else. Take Washington University in St. Louis. Moody’s just downgraded its bond rating, noting how the university’s fundraising and wealth “are below many direct competitors, posing longer term challenges.”

Small colleges without deep pockets are struggling to find their footing. Nearly one third of small colleges operated with a budget deficit last year, according to Moody’s, up from 20 percent three years ago. In contrast, the proportion of large, private universities with deficits declined from 20 percent to 13 percent over the last three years.

Many small colleges are caught in a death spiral that gets worse with each passing year. About 40 percent of colleges enroll 1,000 or fewer students. Since 2010, those institutions have been shedding the most enrollment, a decline of 5 percent. By comparison the largest institutions, with more than 10,000 students each, have grown slightly, on average.

To meet enrollment targets, small colleges have been forced to give larger discounts to incoming students. So even as they increase their published sticker price, the actual cash they have coming in the door has been declining. So-called net tuition revenue—what’s left over after financial aid is given out—fell at nearly one-third of private colleges last year.

That means schools have less cash to invest in buildings and academic programs—the amenities that tend to attract students in the first place. According to Moody’s, campus buildings are getting older and small colleges “continue to struggle to adequately invest in facilities and equipment.”

Public flagships are looking more like large private universities. And that’s leaving the financially struggling regional public colleges in states to pick up the slack in serving residents who increasingly have fewer choices for a public higher education

At two dozen public flagship universities, out-of-state students represent at least 40 percent of freshmen enrollment, and at another 11 of them, out-of-state students account for more than half of all freshmen, according to a report from the Jack Kent Cooke Foundation.

The foundation is focused on helping more students from low-income families get into selective colleges, so its concern is that out-of-state students — who tend to pay higher tuition and generate more cash for universities dealing with cuts in taxpayer appropriations — are crowding out qualified in-state students.

The study noted that out-of-state students have lower records of academic achievement than in-state applicants, but higher family incomes. Many flagships “have become crass moneymaking operations” with admissions offices that “prioritize rich kids from out of state” who don’t need financial aid, the study found.

The number of economically disadvantaged students graduating from high school is predicted to skyrocket in the decade ahead, and the report noted that they can’t be adequately served by selective private colleges. Despite their focus on out-of-state students, public flagship universities still enroll more than 700,000 Pell Grant recipients, who generally come from families making less than $50,000. That’s seven times the number of Pell Grant recipients at elite private colleges.

You only need to look through these two reports to get a sense of the enormous challenges facing higher education. In this polarized political environment, lawmakers on both sides agree that higher education is in need of change. Now the question is whether their solutions will be tackling the right problems.