Demographic Changes as Destiny in College Admissions? It’s Complicated

Want to make college presidents and enrollment managers nervous? Just say the words “demographic change,” and then watch them get all worked up. Sure enough, many institutional leaders have reason to worry that demographic shifts will pose significant challenges to their institutions in the future. On many campuses, such challenges have arrived.

Still, do the prevailing forecasts of the future tell colleges everything they need to know? Not so much, says Nathan D. Grawe, a professor of economics at Carleton College, in Minnesota. Mr. Grawe is the author of Demographics and the Demand for Higher Education (Johns Hopkins University Press), a new book that explores demographic changes in great detail. On Thursday, The Chronicle caught up with Mr. Grawe, who discussed some of his findings. The following interview has been edited for length and clarity.

Q. In higher education, discussions of demographic change are often full of doom and gloom. You’re saying, Wait, not so fast. Why?

A. As everyone in admissions knows, it’s not just the size of your pool that matters, but who’s in the pool. When demographics move the population around, that may or may not be relevant for a given institution or institution type, depending on what part of the market is growing and what part of the market is shrinking. So the thought experiment in the book is to adjust population figures by weighting for the probability of college attendance. It turns out that, for some institution types, and for some regions, that substantially alters what we would expect to happen next.

Q. So head-count data are fine to look at, but those numbers can tell you only so much.

A. Exactly. Not surprisingly, the probability of attending college varies dramatically across demographic groups. It can vary by 10- or even 30-fold. Ultimately, demographics, at some level, do win out. The birth rate has fallen by something like 13 percent since right after the recent financial crisis, and not really rebounding yet.

That’s going to create some serious pressures on higher education, no matter what kind of adjustments we make. But we get very different stories when we look at the population head counts versus who’s likely to attend college.

Q. In a story about demographic projections by the Western Interstate Commission for Higher Education a while back, I wrote that the nation would see “a surge of Hispanic students.” So … was that a dumb thing for me to write?

A. I wouldn’t say it was dumb. It’s just that the Wiche head-count data are limited. That story isn’t entirely false. It looks like, for two-year colleges and regional four-year institutions, we can expect to see an increase in Hispanic students that mirrors what’s going on in the population as a whole.

When you start to look at more-selective institutions, the increasing diversity that we should see is not so much a rise in Hispanics; it’s a rise in Asian-American students, which makes the current Department of Justice’s actions relating to Harvard all the more interesting.

The Wiche data are going to be relevant for a subset of the industry. But even there, we can say more-nuanced things because not all Hispanic students are equally likely to attend college.

Q. You’ve come up with something called the “Higher Education Demand Index.” How does it work, and what does it tell us?

A. It’s a model that attempts to transform population forecasts into college-attendance forecasts, using Education Longitudinal Survey data to estimate the probability of attendance for different population groups. Because the ELS data set includes records of exactly which institutions each student attended, we can do more than simply predict college attendance.

We can predict college attendance at a two-year institution or a four-year institution that’s ranked among the top 50 by U.S. News & World Report. So we can create different demand forecasts for different institution types and by geographic areas.

Q. The nation’s most-selective colleges draw from all 50 states and many other countries. But we know most students stay relatively close to home. How does that factor in?

A. One implication for recruitment is probably that it’s not about recruitment. If you look at two-year colleges and regional four-year institutions outside the top 100, they have very, very local markets, and the forecasts are pretty dismal in most of those markets.

It’s tempting to think, Well, my institution’s going to be the exception. This is problematic for two reasons. One is the aggregate data remain the same. If your institution is an outlier on the positive side, that just means that the negative reckoning that your peers are facing is even worse than the projection. It’s got to average out.

Second, it presumes that your peers, who are even worse than the dismal forecast, are just going to continue doing what they’re doing while you blissfully go on your way. And I don’t believe that for a second. You’re going to see increased competition if you happen to be among the lucky subset that has a stable or growing market.

The bottom line is there’s almost nothing that’s going to get us around the fact that, in the late 2020s, we should see really significant reductions in enrollment. If your strategy for this is to try to increase enrollments, the model suggests that that’s a bad idea.

Q. “Go out and get more applications” isn’t always a wise strategy. And it might become less so?

A. For most institutions, you’re not going to recruit your way out of this demographic change. That means your retention policies become so much more important. If you are losing 20 or 30 or 40 percent of your students, your best strategy might easily be to apply what we increasingly know from the literature are best practices to improve retention.

Q. There’s a great deal of worry in the Northeast, where many selective colleges are located. What about them?

A. At the top end of the market, for the elites, the model predicts healthy growth for most of the country. The Northeast remains an area of loss. With so many institutions there, you can anticipate that those schools will start recruiting in other markets.

The most interesting cases are in those second-tier schools, ranked in the 51-to-100 group. It seems unlikely that elites are going to increase their seat counts enough to soak that all up. That means that as a clever, agile, nimble institution, you may be able to navigate the demographic drop just by being smarter about who you’re recruiting and trying to strategize about how to pick up that spillover.

Q. What do you mean by “spillover”?

A. We’re anticipating an increase in demand for the most selective by something like 15 percent. That increase at the very top is unlikely to be met by those elite schools’ increasing their seat counts. Insofar as we don’t see elite schools’ expanding their class sizes, then we have these students who have the demographic markers of elite-college attendance who can’t get into elite colleges, and then they become available to those second-tier schools.

The increase in demand for elite schools will cover about two-thirds of the losses to those second-tier schools. The question is: How can I be one of the second-tier schools to hold even, one of the lucky ones who recruits the kid who looks like he could’ve gone to, say, Bowdoin, but doesn’t go to Bowdoin? How can I be the fortunate institution in the second tier who picks off the extra elite-like college students?

Q. Enrollment leaders often engage in fearful conversations about full-pay, or close to full-pay, students. Aren’t their numbers going to dwindle?

A. The model can’t predict who will be a full-pay student, but it can sort of act as a proxy for it. We can look for families where both parents have higher-ed exposure and family income is at the high end of their child’s birth cohort. These are higher-income families who are highly educated.

If you project out, it looks like the rise in parent education and some other factors are going to increase the numbers of such students. Unfortunately, it’s not going to be in the Midwest and Northeast, where colleges have traditionally recruited those students. Most of the growth is in the South and the West. So that does go back toward the fearful conversation.

Q. OK, what if I’m at a two-year institution that’s already seeing a decrease in demand?

A. At the two-year colleges we anticipate more or less flat enrollments until the middle of the 2020s. After that, things get pretty grim. So one of the things I would be concerned about, if I’m an administrator, is that I don’t want to make long-term commitments to meet short-term demands, recognizing that the markets for such institutions are incredibly local. I’m not looking to make commitments to full-time faculty members in the short run. I’d also be thinking right now about how we can work out our retention issues.

Q. So if I’m not lucky enough to work at a wealthy, superselective college, how can I possibly get a good night’s sleep?

A. Remaining agile is going to be increasingly important. We can’t simply do the same thing as before. Agility might come in the form of distance learning; maybe it’s international students. It’s pretty clear that, for most institutions, just continuing on as normal is likely to be a formula for some really, really tough decisions in about a dozen years.

So the magical thinking of “Oh, we’ll just recruit a little harder or market a little bit more” is not terribly realistic.

Q. Reading your book, I couldn’t help but think about the thriving industry of enrollment consultants who exist, in part, because there’s this great fear of what the future holds.

A. They do, and that’s not always a bad thing. Fear can grab our attention. It can lead us to redouble our commitment to fulfilling our institutional missions. There are a lot of parents who are increasingly asking that we make the value proposition clear, and that’s a healthy thing. Fear can motivate us to change. Recognizing that we have substantial demographic challenges in the future can help us break down some of the barriers to institutional change.

Q. So maybe there are some silver linings?

A. In some institutions, the demographic change might not be the worst thing in the world. So if you’re a public institution that’s been receiving less and less state support, having fewer students may be a positive thing. It may allow you to increase your per-pupil expenditures.

We’ve seen since the financial crisis that institutions are increasingly relying on non-tenured faculty. That has some real costs, it appears, in terms of student learning. If we have fewer students, and we’re going to reduce the number of faculty, and we’re going to do that by decreasing our reliance on non-tenured faculty, that might actually be a positive thing.

I don’t mean to gloss over a tough story, but there are some opportunities here to claw back some of the reductions in institutional quality that we’ve seen in recent years.

Eric Hoover writes about admissions trends, enrollment-management challenges, and the meaning of Animal House, among other issues. He’s on Twitter @erichoov, and his email address is eric.hoover@chronicle.com.