The Clock Is Ticking: Why Small Christian Colleges Must Get Serious About Healthcare Costs Now
A Call to Financial Stewardship Before the Enrollment Cliff Arrives
The warning signs have been visible for years. Enrollment at small, faith-based colleges has been quietly eroding, and now the precipice is here. The year 2026 marks 18 years since the 2008 financial crisis — and with it arrives the first wave of a smaller generation reaching college age. The so-called "enrollment cliff" is no longer a distant forecast. It is the present reality, and small Christian colleges that have not prepared may find themselves in a fight for survival.
Much of the conversation around the enrollment cliff has focused on recruiting strategies, online program expansion, and brand differentiation. These are important. But there is a quieter, less glamorous lever that institutional leaders must pull with equal urgency:
healthcare spending.
The Scope of the Problem
The numbers are sobering. The number of high school graduates is projected to drop 13% between 2026 and 2041. College enrollment at small private institutions has already been declining, with the median institutional size shrinking from 1,056 students in 2003 to just 861 today. In 2024 alone, one college per week announced plans to close or merge — double the rate of the year before. Trinity Christian College, Siena Heights University, and Sterling College are among the most recent Christian institutions to close their doors, each citing falling enrollment and financial pressure as primary causes.
For tuition-driven institutions — which describes the vast majority of small Christian colleges — fewer students mean fewer dollars flowing in. Every line item in the operating budget becomes more consequential. And few line items are growing faster, or are less scrutinized, than employee healthcare costs.
Healthcare Costs: The Budget Item That Keeps Growing
Healthcare is now among the largest non-instructional expenses on any college campus. According to the Kaiser Family Foundation, the average annual employer-sponsored premium reached $25,572 for family coverage in 2024 — a 7% increase from the prior year. Aon projects that average employer health benefit costs will surpass $17,000 per employee in 2026, a 9.5% jump from 2025 alone. For small-to-midsize employers — the category in which virtually all small Christian colleges fall — the increases are often even steeper.
Put plainly: if your institution employs 150 people, you may be spending $2.5 million or more annually on healthcare benefits, and that number is climbing by nearly 10% each year. Over a five-year enrollment decline, these compounding costs can quietly consume the financial flexibility a college needs to survive a downturn.
This is not an argument against caring for employees well. Faithful stewardship of people is a core Christian value, and healthcare benefits are a critical part of honoring the people who serve your mission. But there is a significant difference between
generous healthcare and
unreflective healthcare and far too many small colleges are paying for the latter.
Strategies Worth Considering
The good news is that meaningful cost reduction does not require gutting benefits. Research from Marsh McLennan Agency suggests that employers can save between 10% and 30% annually on healthcare costs through high-performance provider networks, direct contracts, and reference-based pricing — while potentially improving care quality. Self-funded health plans, when properly managed, can save institutions 8% to 10% in the long run by giving administrators greater control over claims data and eliminating insurance carrier profit margins built into fully insured premiums.
Other strategies small colleges should actively explore include:
- Wellness programs with clear incentives.
- Institutions that invest in preventive care and chronic disease management programs consistently report lower utilization and claims costs over time. A healthy workforce is a less expensive workforce.
- Health Reimbursement Arrangements (HRAs).
- Tools like ICHRAs allow institutions to set defined contribution budgets for healthcare while giving employees flexibility to choose the coverage that best fits their individual situations — shifting from open-ended liability to a predictable cost structure.
- Consortium purchasing.
- Several Christian college associations already collaborate on curriculum and accreditation. There is no reason that same spirit of collaboration cannot extend to healthcare purchasing pools, giving smaller institutions the collective bargaining power typically reserved for large employers.
- High-Deductible Health Plans paired with Health Savings Accounts.
- When implemented thoughtfully with meaningful employer contributions to HSAs, these plans can significantly reduce premium costs while empowering employees to become more engaged consumers of healthcare.
- Telehealth and direct primary care.
- Expanding access to telehealth and contracting directly with primary care practices can reduce unnecessary emergency department visits and specialist referrals — two of the largest drivers of cost growth.
The Stewardship Imperative
There is a theological case to be made here, not just a financial one. Christian colleges exist to pursue a mission — forming students in faith, virtue, and vocation. Every dollar consumed by avoidable overhead is a dollar unavailable for scholarships, faculty, spiritual formation programs, and the other investments that make a Christian education distinctive and compelling.
As the pool of traditional-age students shrinks, institutions that survive will be those that have preserved financial margin through disciplined stewardship. Those that have allowed operational costs to grow unchecked — including healthcare — will find themselves with fewer options and less time to respond. Some will not survive at all.
The boards, presidents, and CFOs of small Christian colleges bear a genuine responsibility to examine their healthcare spending with fresh eyes. Not to cut corners on employee care, but to ask hard questions: Are we in the right plan design? Are we getting value for what we spend? Are we taking advantage of tools and strategies that could reduce costs without reducing care?
Conclusion
The demographic headwinds facing small Christian colleges are real, structural, and unavoidable. What is avoidable is allowing preventable operational costs to accelerate institutional decline. Healthcare spending is one of the most significant and fastest-growing expense categories on most campuses — and for most small colleges, it remains an underexamined area of financial strategy.
Now is the time to look carefully, act wisely, and steward well. The mission is too important to lose for lack of attention to the budget.
About Trinity Captive Group
Trinity Captive Group helps employers take greater control of their healthcare costs through innovative self-funded captive insurance solutions. By combining cost-containment strategies with industry-leading partners, Trinity empowers organizations to reduce healthcare expenses while enhancing employee benefits and long-term financial stability. For more information, please visit trinitycaptivegroup.com.
*This article is intended for institutional leaders, board members, and stakeholders of small Christian colleges navigating the financial challenges of the coming decade. For specific guidance on healthcare plan design and cost management strategies, consult a licensed benefits advisor.*
