The Great Enrollment Crash – “Students aren’t showing up. And it’s only going to get worse. …”

via taxprof:

Chronicle of Higher Education, The Great Enrollment Crash:

Students aren’t showing up. And it’s only going to get worse. …

Higher education has fully entered a new structural reality. You’d be naïve to believe that most colleges will be able to ride out this unexpected wave as we have previous swells.

Those who saw modest high-school graduation dips by 2020 as surmountable must now absorb the statistical reality: Things are only going to get worse. As Nathan Grawe has shown, a sharp decrease in fertility during the Great Recession will further deepen the high-school graduation trough by 2026. Meanwhile, the cost of attendance for both private and public colleges insists on outpacing inflation, American incomes continue to stagnate, and college-endowment returns or state subsidies can no longer support the discounting of sticker prices. …

This perfect storm has changed, and will continue to change, student and family college-choice behavior for the next decade and more. I see this playing out across three dimensions: majors, money, and mission.

[Majors]  As any number of reports have shown, students have been inexorably marching away from the traditional liberal-arts majors. One such report from the American Academy of Arts & Sciences noted that bachelor’s degrees in the humanities represented 17 percent of all degrees conferred in 1967, compared with 5 percent in 2015. …

[Money]  The handwriting was probably on the wall, as the national, first-year discount rate had already crested the 50-percent mark; according to the National Association of College and University Business Officers (NACUBO),  it was 39 percent as recently as 2008. This steep rise is significantly fueled by colleges that have adopted the airline pricing model: If the plane is going to fly anyway (and if there are still spots open), no harm in getting even pennies on an otherwise unsold ticket. For colleges discounting at or above the national figure, this is unlikely to be a sustainable strategy. However, in the meantime, they are no doubt pulling students away from colleges that expect full-pay or better-pay students to foot the true bill. In short, price sensitivity is a structural reality when supply (number of college beds and desks) is greater than demand. …

[Mission]  At the dawn of the 20th century, the railroad industry nearly collapsed. Why? Because industry leaders (wrongly) believed their primary mission to be railroading, not transportation. For too long, colleges — public and private, liberal arts and research-driven, rural and urban — have operated as if they’re solely in the higher-education business rather than in the broader postsecondary-education sector. …  Consider this comment from May 2019 by Tim Cook, Apple’s chief executive: “I don’t think a four-year degree is necessary to be proficient in coding. I think that is an old, traditional view.”

 

 

 

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