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The “enrollment cliff.” It’s a term that most college leaders have become all too familiar with in recent years as they plan for major demographic shifts and other factors that could impact the number of students on university campuses around the country.
The threat is real, it’s going to have immediate and long-term impact, and the hardest-hit institutions will be those that rely on traditional-age students and those in certain regions, such as the Northeast and New England, experts say. However, it is not all doom and gloom, as there are actions that schools can take now to mitigate challenges later.
“I would describe the implications for higher education enrollments as a threat rather than a certainty,” said Nathan Grawe, professor of economics at Carleton College and author of “Demographics and The Demand for Higher Education,” who wrote several blogs for HigherEdJobs on the topic in 2019. “Institutions have considerable agency in light of shrinking pools of students — in particular, improved retention or expanded recruitment would diminish enrollment contraction.”
Statistics show that fertility rates across the nation peaked in 2007 and have declined steadily since, with 43 states recording their lowest fertility rate in three decades. Fertility rates have now reached historic lows nationally.
“Because the traditional-aged college market recruits 18-year-olds, we can anticipate the front edge of the fertility decline to arrive in 2026,” Grawe said. When combined with other factors such as out-of-state migration, declines are expected to be most pronounced in the northeast quadrant of the country, along the Great Lakes and into the Middle Atlantic through New England, he added.
While the impending “enrollment cliff” presents a significant threat, it also offers an opportunity for higher education institutions to re-examine how to do business by focusing more on retention and student success, expanding into new student markets, and better aligning educational offerings with market demands.
“At a basic level, enrollment has only two levers: recruitment and retention,” Grawe said. “As the size of the fertility contraction deepens year over year, the idea of sustaining enrollment levels with recruitment alone is less and less credible. The matriculation rate would need to increase at unprecedented rates for the math to work.”
After a change in state policy that puts more focus on retention metrics, some institutions in Florida have adopted strategies to discern what students are more at risk of dropping out and intervening to keep them enrolled, allowing colleges to be more proactive, than reactive.
Pressure may also be mounting on colleges to seek out new populations other than traditional age students. Some solutions include increasing dual enrollment offerings to high school students or recruiting more international students.
Many colleges have also looked toward new markets, such as adult learners aged 25 and older, to help fill pending enrollment gaps, some of whom have never attended college and others who started a degree but never finished it. Adult learners make up 42% of higher education revenue, and can represent a big opportunity for enrollment growth. But turning to the adult learner market is not without its challenges, Grawe said.
“As the depth of fertility decline comes into focus, I often hear people point to the potential to offset losses among traditional-aged students by an expansion into the adult learner market,” he said. “But the idea is one thing, the work is another. In the decade prior to the pandemic, the number of higher ed students ages 25 and above has declined by almost 20% despite growth in the number of workers ages 25 to 54.”
The higher education sector will also have to continue to adapt to students’ increasing interest in a career-focused education by redesigning curricula to align more closely with labor market needs and offering more online and hybrid learning options. The growth of alternative education providers like Coursera highlights this demand for flexible and affordable education options outside the traditional brick-and-mortar college model and the competition traditional institutions face for a dwindling number of students.
Colleges are also facing enrollment challenges that go beyond demographics, as economic and societal factors continue to shape who seeks out higher education. A 2023 Gallup poll indicated Americans’ confidence in higher education has fallen to 36%, likely impacted by the burgeoning cost of college and perceived waning value of a college degree.
These challenges are compounded by the fact that at least 16 states and many employers, in an effort to remove barriers to fill labor shortages, are waiving bachelor’s degree requirements for many jobs in favor of skills-based credentials and hiring processes.
With demographic challenges and other changes on the horizon, colleges will need to act fast to sustain enrollments and solidify future revenue streams. But by understanding and addressing the underlying causes of enrollment declines and adapting to the evolving needs of students, colleges and universities can turn this threat into an opportunity for growth and transformation.
