College Enrollment Declines as Costs Rise: Here’s What Experts Say About the Future of Higher Education
During the COVID-19 pandemic, college enrollment rates declined. When schools began to have in-person classes again, the number of high school graduates who applied to college continued to drop.
According to a 2023 Fortune article, undergraduate college enrollment dropped by 8% from 2019 to 2022. Economists say the decreased college enrollment could impact labor rates as well as high school graduates’ overall perception of the value of holding a college degree.
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The decrease in college enrollment has coincided with the rising costs of undergraduate school. In 1980, the annual cost of attending a four-year college was $10,231. By 2019, it rose to $28,775 — a 180% increase. Even just from February 2020 to February 2023, college tuition costs have increased 4.7%.
With decreasing enrollment rates and increasing costs, financial experts have weighed in on what they predict about the future of higher education.
Why College Enrollment Rates Are Declining
The biggest reason high school graduates choose to go to college is so they can be better prepared for their future careers. According to Modern Campus CEO Peter DeVries, those with a college degree typically make more money than those without one. This is because management and higher-earning career paths often require a college degree. However, DeVries said while 58% of college graduates enroll in necessary degree programs to achieve their career goals, 41% are underemployed following graduation.
“This is generally because students take on so much debt to attend their dream schools that they take whatever job they can get to begin paying down their loans, leading to underemployment cycles,” DeVries said.
The rising costs of a college degree are the biggest cause of declining enrollment rates. Stephen Henn, adjunct professor of economics at Sacred Heart University, said this is one trend that is driving the declining college enrollment. The second trend is the perceived value of the payoff of a college degree.
“High school seniors are savvy enough to do a cost-benefit analysis on going to college and incurring debt versus entering a trade or going directly into the workforce,” Henn said. “In addition, many companies have removed a college degree from the list of required qualifications and replaced this with internal training programs.”
With these trends leading to fewer high school graduates pursuing college, financial experts predict several things will happen within the world of higher education.
What Experts Predict About the Future of Higher Education
Brandon Ashton, director of retirement security at Cornerstone Financial Services, predicts three trends for the next decade. The first is that there will be an increased focus on skills and trade-based careers.
“With the labor market becoming increasingly competitive,” Ashton said, “colleges and universities may place greater emphasis on equipping students with practical skills and competencies that are in demand by employers. This could involve closer collaboration with industry partners, internships, co-op programs and experiential learning opportunities.”
The second trend Ashton predicted is reduced costs for a college education. Ashton believes colleges and universities may find ways to reduce the costs without compromising their educational quality.
“This could involve leveraging technology for more efficient administrative processes, optimizing campus infrastructure and exploring shared services models with other institutions,” Ashton said.
The third trend that Ashton thinks may occur within the world of higher education is an increased emphasis on financial aid and scholarships for students.
“Colleges and universities may need to enhance their financial aid packages and scholarship offerings to make higher education more affordable and attractive to students. This could involve reallocating resources, fundraising, and partnering with external organizations and corporations to expand access to financial assistance,” Ashton said.
What Experts Believe Colleges Should Do
While there are several predictions for the future of higher education, there are also some suggestions from experts on what colleges and universities should follow if they hope to increase enrollment rates and make themselves more appealing to potential students.
DeVries encourages higher education institutions to emphasize the connection between education and career success.
“They need to highlight the value of the technical skills and professional skills students learn at every stage of their degree pathway,” DeVries said, “and make it clear how those skills will lead to specific jobs with specific salary bands and sustainable careers.”
Additionally, DeVries said it’s important to instill micro-credentials throughout a student’s academic career, as recognizing a student’s success at every stage of their degree pathway will better support them for future success.
“Education isn’t a binary, where either you earn a degree and are educated, or you don’t earn a degree and are therefore not educated,” he added.
Henn said colleges must focus less on the newest campus facilities and more on graduates’ success after college.
“Employment rates post-graduation, effective career centers and university-corporate partnerships will matter more to students than a new building,” Henn said.
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