Looming Enrollment Cliff Poses Serious Threat to Colleges

• Thanks to lower birthrates during the Great Recession, the college-age population will shrink beginning in 2025.
• College officials call this demographic phenomenon the "enrollment cliff."
• The effects will vary based on geographic region and institutional type.
• Colleges are already making adjustments to become more competitive and attract new student populations.

Today's colleges and universities face a perfect storm of converging headwinds: Rising costs and mounting student debt. Admissions scandals amid cries of opaqueness. Political pressures to alter the curriculum. A Supreme Court seemingly eager to eradicate affirmative action. Waning public confidence.

But topping the list of concerns is that fewer and fewer young adults want what colleges offer. Enrollments have been dropping for a decade and cratered during the COVID-19 pandemic.

To make matters even worse, a dangerous precipice looms on the near horizon, a demographic phenomenon known as the enrollment cliff. Many colleges won't survive the fall.

What Is the Enrollment Cliff?

The "enrollment cliff" refers to the dramatic drop in the college-age population beginning in 2025.

Forecasting the number of college-age youths is a relatively simple task. Take the birthrate of a given year and fast forward 17 and 18 years — when most kids start college.

Now consider birthrates during the Great Recession, which began in 2008. During that time of economic stress and uncertainty, notes Carleton College economist Nathan Grawe, people were having fewer children. The number of kids born between 2008 and 2011 plummeted dramatically.

So if you graph demographic projections, the precipitous descent resembles a cliff beginning in 2025. Over the succeeding four years, the number of 18-year-olds will decrease by 15%.

How does that translate into enrollment figures? During that four-year span, colleges will lose approximately 576,000 students.

Unfortunately for higher education, this situation isn't an aberration. College enrollments have been declining steadily since 2012. During COVID-19's apex — from 2019 to 2022 — undergraduate enrollment dropped by 7%.

But it's not just demographics and pandemics affecting college enrollments. A strong job market and low unemployment rates mean companies are willing to pay high wages to attract employees and persuade some high school graduates to put off college temporarily, if not permanently. One New York construction company is offering kids fresh out of high school $47 an hour following an apprenticeship.

Add that four-year opportunity cost together with student loan debt and the calculus doesn't make sense to a growing number of young adults — especially when a company as exalted as Google tells them they don't need a bachelor's degree to work there.

For those who do want a post-high school credential, there are plenty of cheaper and faster options than the traditional college route. Google itself offers six-month certificate programs leading to in-demand jobs. So do IBM and Meta. Coding bootcamps also have emerged as a viable alternative to college.

"Students are questioning the value of college," said Doug Shapiro, executive director of the National Student Clearinghouse Research Center. "They may be looking at friends who graduated last year or the year before who didn't go, and they seem to be doing fine. They're working. Their wages are up."

The Enrollment Cliff's Uneven Impact

While the enrollment cliff certainly isn't welcome news for universities, it won't affect all of them equally.

Colleges in the Northeast and Midwest, regions that for years have been experiencing population declines due to migration patterns, will be hit hardest. Grawe's projections suggest both regions will see their college-going populations drop by more than 15% through 2029.

That's sobering news for small, tuition-dependent private colleges in those states already teetering on shaky financial footing. Since 2016, 16 colleges in New York and Massachusetts alone have closed, thanks in part to a pandemic putting the proverbial final straw on the camel's back.

"Students are going to be a hot commodity, a scarce resource," Grawe told The Hechinger Report.

Conversely, Texas, West Coast states, and several Mountain states will see those figures rise, some by more than 7.5%, Grawe predicts. Continued positive migration will offset lower birthrates.

Results will vary based on institutional type as well. Community colleges will be adversely affected, Grawe predicts, heaping more bad news on a sector ravaged by the pandemic.

So too will regional four-year universities, except for those in California, South Carolina, and the Mountain states.

Yet the rich will continue to get richer, Grawe predicts. Demand for elite universities could be as much as 14% higher in 2029 than in 2012, he anticipates.

For those colleges not as fortunate, the threat of merger or closure hovers like an ominous specter.

When a college closes, it's not just the students and faculty who suffer. College towns whose economic fortunes are tied to institutions can experience an exodus of residents and small businesses, a drop in property values and tax revenue, and an irreversible depression altering the lives of whoever is left behind.

How Will Colleges Respond?

We can assume colleges won't willingly fall victim to the enrollment cliff like clueless lemmings.

A 2022 survey by Bay View Analytics revealed that nearly 90% of academic administrators "expressed some level of concern about future enrollments for their institution."

Many colleges already are devising marketing strategies to attract more students. With the pie shrinking, colleges will compete to secure a slightly larger slice.

And it's not just advertising tactics that will attract students.

Colleges must modify what they offer to accommodate student and employer needs. Writing in Vox, Kevin Carey argues most colleges will become increasingly attuned to the job market, creating and expanding academic programs in high-demand fields such as business, information technology, and healthcare.

On the flip side, low-demand fields — particularly those in the arts and humanities — will face extinction for the sake of financial efficiency. Elite private colleges and well-funded publics will continue to offer a wide range of majors, even unpopular ones, but most won't have that luxury. As such, students will arrive to find the buffet of academic and career options slightly less stocked.

And that's too bad, Carey contends.

"The financially motivated vocationalization of less selective colleges and universities will further divide students by income and class," he writes. "First-generation students are not going to discover their calling in academia at the local university if all the quiet and quirky majors have been eliminated in the name of financial efficiency."

Delivery methods will change as well, the Bay View Analytics survey points out. More than 80% of institutions have increased the number of online and hybrid courses or are planning to, its study notes.

Such changes respond to student demand by sector. Those enrolled at community colleges are most likely to want online and hybrid options, and community colleges are most likely to offer them. Next in line in terms of similar preferences are four-year publics, followed by four-year privates.

Colleges are also adding microcredential programs — publics are more likely to do so, though almost half of private colleges said they've begun offering them or are planning to. An English major can tack on a microcredential in supply chain management to help ease the transition to the labor market.

Finally, when one population shrinks, it's wise to bring others into the fold.

Former students who have "stopped out" before completing a degree constitute a fertile field worth tilling. The Bay View report notes there are more than twice as many stopped-out students as currently enrolled ones. Four in five community colleges have or will have programs dedicated to re-enrolling them.

In a Hechinger Report opinion piece, Josh Wyner argues colleges will need to attract various nontraditional audiences to compensate for the loss of high school seniors. These populations include high school students taking college courses (dual enrollment) and working adults who need short-term training.

Now only two years out, the impending enrollment cliff awaits on the near horizon as an existential threat, a Darwinian challenge to colleges unable or unwilling to make wise market decisions and shore up their financial house.

By 2030, our nation will have far fewer colleges than it does now, with many privates — and perhaps some publics — becoming extinct after decades, even centuries, of existence.

At least they've been warned.