Higher education’s enrollment challenges are by now well known. The demographic cliff — a sharp decline in the number of high-school graduates nationwide — has been forecast for years and is already underway in the Northeast and Midwest.
In the past, higher education was able to blunt demographic cliffs by boosting the share of high-school graduates who go to college and by attracting older students who want to improve their skills. Both of those sources of students have declined in recent years. Between 2018 and 2021, the share of recent high-school graduates enrolling in college fell from 69 percent to 62 percent, with a 15-percentage-point gap in enrollment between women and men (70 percent versus 55 percent). The overall enrollment rate is the lowest it has been since 2001, and the gender gap is the largest it has been in at least three decades. Meanwhile, the number of undergraduates age 25 and over fell by one-fourth — more than two million students — between 2011 and 2021.
Those declines in enrollment began before the pandemic, and they have continued since the worst of the pandemic has passed. New data from the National Student Clearinghouse show a continued decline in the number of college students enrolled in the spring of 2023 semester, with the only bright spots being in the much-diminished for-profit sector and dual-enrollment students (those enrolled simultaneously in both high school and community college).
Our sector is typically countercyclical: Enrollment increases during recessions and decreases during strong economies as students choose between full-time jobs and pursing a college credential. An unexpectedly strong economy following the initial wave of the pandemic likely contributed to enrollment declines, but growing skepticism about the value of higher education (in part driven by a growing partisan divide) means that colleges can no longer count on a robust rebound in enrollment when the next recession inevitably hits. Throw in high inflation and the end of federal pandemic-support funds, and it is not exactly the rosiest time for colleges.
But while nearly every sector of higher education has seen large declines in enrollment, some colleges are doing quite well. As Brian Rosenberg described before the pandemic, higher education is in a Gilded Age, with a growing divide between the haves and the have-nots. There are two groups of colleges in the haves category right now. One is made up of the few dozen highly rejective private colleges with enormous endowments. Unsurprisingly, they are in a stronger position than ever.
The other group is made up of flagship public universities, many of which are vacuuming up students while their regional-university and community-college counterparts struggle for enrollment. I am at the University of Tennessee’s Knoxville campus, which is bursting at the seams — to the point that the university rented a Holiday Inn to house students. Total enrollment was up 6.6 percent last year and by 17 percent since 2018. Meanwhile, enrollments across the rest of the state are generally down. The University of Tennessee system’s campuses in Chattanooga and Martin are down between two and three percent since 2018, and community colleges are down nearly 20 percent.
Colleges cannot count on a robust rebound in enrollment when the next recession inevitably hits.
That leads to significant inequities for students, as those who are able to attend the suddenly more-selective flagship universities benefit in numerous ways. A striking example came during the process of setting tuition and fees within the University of Tennessee system. The state’s higher-education commission limited universities to a 3-percent jump in tuition and fees. Knoxville chose to propose a 1.8-percent increase to fund fees for facilities and transportation, while the other system campuses requested the maximum 3-percent increase.
Chattanooga’s explanation for its proposed spike in tuition is telling: “Projected growth from state appropriations and other funding sources will not provide sufficient funding to respond to a significant rise in inflation and fully fund UTC’s FY24 salary pool.” While Tennessee has been among the most generous states in higher-education funding, some universities have to turn to tuition increases to pay for employee salary raises while Knoxville can make a small spike in student charges and build for the future.
There are plenty of other states where the flagship public university is doing well while other institutions suffer. In Michigan, for example, using data between 2018 and 2022, total enrollment is up 9.7 percent at the University of Michigan at Ann Arbor, down 22 percent at the University of Michigan at Flint, and down 12.1 percent at Wayne State University. In Pennsylvania, enrollment is up 4.2 percent at Penn State’s main campus in University Park and down 17.4 percent at the regional campuses. In Illinois, enrollment is up 14.5 percent at the University of Illinois at Urbana-Champaign, down 8.2 percent at the University of Illinois at Springfield, and down 10.1 percent at Western Illinois University. And in Louisiana, enrollment is up 14.7 percent at Louisiana State University at Baton Rouge, down 23.5 percent at Northwestern State University, and down 11.6 percent at the University of Louisiana.
It’s not just regional publics that are struggling. Many private colleges without billion-dollar endowments are also significantly down in enrollment. DePaul University, in Chicago, is facing a $56.5-million budget deficit as enrollment has fallen by 6.8 percent since 2018. And plenty has been written about the challenges facing very small private colleges, even though the resiliency of these colleges leads me to expect only a modest uptick in closures.
What does the future of enrollment look like? In the short term, I do not expect any substantial increases as long as the economy and political environment remain stable. I still expect to see a rise in enrollment once the next recession inevitably hits, but the bounce will likely not be as large as those in previous recessions, as more people question whether higher education is worth the price tag.
Where will these additional students enroll? Historically, community colleges, regional universities, and online institutions have accommodated the bulk of recession-induced boosts in enrollment. But given current trends, these sectors may not benefit as much as they have in the past. A wild card is the extent to which flagships are willing and able to grow to take on more students. Some may prefer to become more selective and not further expand their footprint — others might be concerned about their ability to accommodate more students on campus.
Even if the haves of higher ed decide to limit increases in enrollment, the vast majority of colleges face significant challenges going forward. Here are three recommendations to leaders of regional colleges that go beyond the standard advice to cut programs.
Approach growth with caution. When faced with financial challenges, institutions have traditionally responded by trying to build toward rosier budgets by starting new programs and building new facilities. That strategy has often worked in the past, but it is less likely to do so now given fierce competition for students. Additionally, colleges should be hesitant to take on debt for new projects now due to high interest rates and the vivid memory of cash-flow concerns during the early months of the pandemic.
If colleges are willing to invest time and energy into enhancing relationships with their local communities, then more people may see the value proposition of attending college.
That does not mean that community colleges and regional publics need to cede all growth opportunities to super-wealthy private colleges and flagship public universities. But it does mean that growth opportunities need to be carefully evaluated to make sure they are reasonable. It is easy to make pie-in-the-sky projections regarding enrollment and revenue, but it is wiser to consider reasonable worst-case scenarios as the most likely outcomes.
Rely on local ties to build trust and expand enrollment. Local support has been a hallmark of community colleges ever since their creation, and the sector is viewed more favorably by Americans across the political spectrum than all other sectors of higher education. Regionals also enjoy high levels of support in their communities as economic and cultural anchors, which can make it tempting for them to target other markets and take their hometowns for granted.
If colleges are willing to invest time and energy into enhancing relationships with their local communities, then more people may see the value proposition of attending college. There is room to raise current college-going rates, even in areas with declining populations, but it will take a campaign to change the mindset in these communities. College leaders need to be visible in these communities and need to raise funds in order to offer additional financial aid to boost enrollment.
Invest in public relations and lobbying. A smart investment in telling a college’s story and advocating for its interests can generate a significant return on that spending that can then be used to support academic programs. Additional spending on building relationships will be needed to help many colleges enhance their connections with their local communities. For regional publics, lobbying may be beneficial as states evaluate their higher-education funding formulas and enrollment policies. Policies that encourage the flagship to grow will pit colleges in competition against each other, and that can be to the detriment of regional publics.
Although the decade-long slump in college enrollment may be bottoming out, the only thing that will yield a significant boost in enrollment is a major recession. While gains in enrollment are likely to be unevenly distributed, colleges with a strong focus on their local communities stand a good chance of surviving — and possibly even thriving.
