Colleges and universities are facing a unique challenge: High school students used to look to the future and see college as the most important step to an elevated career and competitive salary. But for the next wave of prospective students, their vision of the path to professional success and financial freedom seems to be changing. And colleges and universities are feeling the effects.
According to research conducted by The National Student Clearinghouse Research Center, undergraduate enrollment was up 2.1% for fall 2023 – the first such increase since the beginning of the pandemic.
However, college campuses are still losing the very demographic that has historically been the bread-and-butter of higher ed: freshmen. Enrollment for first-time college students ages 18-20 is down 3.6% from fall 2022, and up just 0.8% since fall 2021. This reflects a nationwide trend of slow growth and 10 years of declining enrollment in higher education, after decades of steady increases.
Factors Influencing Higher Ed Enrollment
Overall, U.S. college enrollment has continued to decline, with 21.1 million students enrolled in 2021, compared to 21.7 million in 2019 and 23.7 million in 2011. And students have not readily returned to the classroom as there are now 1 million fewer students enrolled in college than before the pandemic. This leaves college admission boards with multiple challenges to drawing in eager learners.
Here are some of the top trends affecting enrollment:
1. Declining Birth Rates
College enrollment peaked in 2010-11, twenty years after the top of the millennial birth wave. The class of 2026 will mark the pinnacle of college-eligible graduates as the U.S. tops out at around 3.86 million high school students graduating.
A lower birth rate is also diminishing the pipeline of college-aged students. Data from the CDC shows a 15.5% decrease in live births from 2009 to 2019. Simply put, there are fewer high school graduates and that statistic isn't seeing a significant rebound.
However, since 2019, birth rates have stabilized, posting a .09% increase each year since. But even that may not be enough to bring college enrollment back to the levels enjoyed in the first twenty years of the 21st century – at least not in the foreseeable future.
2. Shifting Perceptions of Value
Public perception of colleges and the education that they provide is also shifting. While the majority of Americans (80%) still find value in a college education, according to The Chronicle of Higher Education, they are less likely to trust the institution of higher education. A 2023 Gallup poll of 1,013 U.S. adults found that only 36% of Americans expressed confidence in the institution of higher education, and one-quarter (22%) said they had “very little” confidence in higher ed – a 144% increase since 2015.
Meanwhile, student opinions are also transforming, particularly in professional, skills-focused disciplines like business, marketing, and STEM. Some students in computer science and engineering find that traditional degree programs do not align with their career goals. These students want to be in laser-focused, really purposeful programs and a liberal arts education is no longer acceptable. Some students also express concern over the value of degrees in engineering and computer science when compared to commercially available alternatives.
A 2024 Harvard Business Review article highlights that alternatives like online courses, vocational training, and apprenticeships are gaining popularity. Google’s career certificates are a great example of this. These courses often focus directly on the skills you need for certain jobs, and they can help get you into the workforce faster.
3. Fewer Employers Require a 4-Year Degree
The concerns of many current and prospective students are not unfounded. Skills-based hiring is on the rise, especially for IT and managerial roles. Many primary employers have reduced degree requirements by as much as 46% in recent years. For example, IBM only requires degrees for 29% of its IT-related job postings. One of its top competitors, Accenture, requires degrees for just 26%.
For students hoping to be employed by tech companies that require skills-based testing – like Shopify, Facebook, and Microsoft – alternative options like coding boot camps may seem more valuable than a typical degree program.
With evidence to suggest that four-year degrees don’t carry the weight they once did, students are weighing their options and finding ways around hefty tuition bills.
4. Economic Factors Drive Students to Seek Alternatives
With college tuition clocking in at historic highs – and still on the rise – Gen Zers are watching Millennials struggle to pay back student loans, and many have started to question the value of a college degree. Particularly when the wider college expenses such as room and board, transportation, and daily expenses also continue to increase and add to overall higher education debt.
No matter the category, tuition has more than doubled in the last 20 years. The State of Higher Education 2023 report by the Lumina Foundation, surveyed 6,000 U.S. students currently enrolled in a postsecondary education program, 3,000 adults who started but stopped out, and another 3,000 individuals who have never enrolled in higher education. The survey showed that cost was the number one reason 55% of high school graduates skip college. In fact, the top three reasons are all financial — inflation comes in second at 45% and work obligations at 38%.
High school students are also less likely to enroll in college immediately after graduation than they were a decade ago. Instead, many take advantage of the competitive labor market and intense wage growth by delaying college. And a growing number opt for non-traditional college experiences, like remote learning and trade school.
Areas of Higher Ed Enrollment Success
While overall freshman enrollment is down at four-year institutions, some schools – community colleges, online courses, and trade schools – see enrollment increasing. Additionally, nontraditional, first-generation, and minority students seek higher education at a higher rate than other students.
Here are some sectors seeing success:
- Remote learning: Online colleges and universities enroll nearly 2.79 million students—almost 15% of all U.S. postsecondary learners.
- Trade schools and apprenticeships: The U.S. Department of Labor reported a 64% increase in apprenticeships from 2012 to 2021. And in 2022, enrollment in trade programs increased 11.5% from the previous year.
- Community colleges: For first-year students, community colleges prove to be an attractive alternative to a four-year institution – enrollment grew 4.4% this fall. Tuition is also more appealing with more modest increases compared to four-year schools.
- Nontraditional, first-generation, and minority students: The National Student Clearinghouse Research Center reports gains in enrollment for undergraduates over the age of 30 (~3%); undergraduate certificate programs (9.9%); Black (2.1%), Latinx (4.2%), and Asian (4%) students; and HBCUs (6.1%).
Responding to the "Enrollment Cliff"
To respond to the enrollment cliff, traditional four-year colleges and universities may need to take a look at strategies that could help keep them relevant and worthy of incoming students' time and money.
Here are four key focus areas:
1. Be Unique
Higher education institutions might want to focus on strategic elements that both encourage freshmen enrollment and keep students pursuing their education through the completion of their degrees such as unique educational offerings and reduced cost options. For example, students want more than a generic college experience. Nearly one-quarter of today’s college juniors say all colleges look and sound the same.
2. Align Academic Programs with Workplace Skills
Higher education in the U.S. does one thing well: academic research. When stacked against other nations, our universities do well. However, academia has been slow to prepare students for the actual workplace. Universities may want to consider adding programs that better prepare new graduates with employable skills or specialties that fill important gaps in the labor force.
3. Delineate Degree Paths
Traditional degree paths and career-oriented ones are not mutually exclusive, and universities may want to consider clearly delineating degree paths based on desired outcomes.
Some smaller colleges, technical schools, and community colleges excel at this, which is why their enrollment is rebounding. But, overall, it’s not happening fast enough. In the last decade, 25% of job-related skills have changed. That number will double by 2027.
4. Upskill Academics
In the absence of sweeping curriculum changes, individual programs and instructors can consider adding experiential and work-based learning opportunities. But more importantly, academics may want to look for upskilling opportunities of their own:
- Professional development sabbaticals for learning about the workplace.
- University-owned businesses run by students under instructor supervision.
- Hands-on instruction that gets students immersed in their field sooner.
Upskilling in these areas could provide students with valuable professional experiences.
The Takeaway
As the enrollment cliff approaches, there are many successful strategies that four-year colleges and universities may want to consider pulling from community colleges and online learning to help entice recent grads, including offering ways to reduce tuition costs and providing high-value courses. This may help higher ed institutions reassure prospective and current students that their education can be tailored to their needs and that a degree is still worth the price.
