Rising tuition costs. Falling birth rates. Shifting attitudes. Changing career goals. The challenges to recruit and retain higher education students are real. Numerous studies and reports provide insights about changing behaviors, attitudes, and socioeconomic influences that have higher education institutions alarmed.

Fortunately, there may be a bright spot for innovative colleges and universities focused on adapting to young people’s expectations and for emerging CTE programs. This includes building reliable online learning experiences and taking meaningful steps toward digital transformation.

The Perils

The higher education enrollment landscape shifted seismically due to the pandemic. In its aftermath, growth indicators are not sunny—particularly for two-year colleges and four-year institutions not considered “top-ranked.” The numbers don’t lie.

Nationwide, undergraduate college enrollment dropped 9% from 2009 to 2022, according to National Center for Education Statistics (NCES) data. Unsurprisingly, the pandemic had a massive impact on those numbers. NCES reports, “In 2020—the first year in which fall enrollments were impacted by the coronavirus pandemic—female enrollment was 2 percent lower than in 2019, while male enrollment was 7 percent lower.” Those drops have not rebounded since the pandemic, with postsecondary enrollment down approximately 1.23 million undergraduates compared to fall 2019.

The National Center for Education Statistics does not anticipate the 9% losses from 2009-22 will be regained by 2030. In fact, it anticipates there will be an overall 1% loss in enrollment once we reach 2030. Even more foreboding, McKinsey & Company predicts college enrollment will begin a steady decline from 2025 onwards, pointing to declining birth rates and uncertainty in the international student market.

Declining Birth Rates

Americans are having less children. Beginning in 2007, the Great Recession sparked a decline in birth rates, and those numbers have not rebounded. This means fewer high school graduates preparing to enter higher education institutions.

The Higher Education Demand Index (HEDI), developed by Nathan Grawe, a professor at Carlton College, predicts that between 2012 and 2029, four-year schools will see a drop of 9 percent in enrollment. Two-year schools fare even worse, with a 13 percent drop. It’s a better story for the Top 50 National Colleges and Top 50 National Universities named by U.S. News &World Report. These institutions are expected to have higher enrollment by 2029 than in 2020.

Interestingly, geography matters—especially for two-year schools and regional four-year institutions that are not top-ranked. Most of the U.S. is experiencing population declines; however, states like Montana, Idaho, Wyoming, Colorado, Oklahoma, Minnesota, and South Carolina have varying degrees of population growth. This means higher education institutions in these states may be less impacted.

Fewer International Students

In previous tough enrollment times, higher education institutions, particularly four-year universities, often looked to international students to fill the gap. Those days may be over. McKinsey reports while international students have increased by 68 percent since 2005, that growth has stalled and may be declining as of 2018.

McKinsey gets straight to the point on the bottom-line impact for institutions noting that “While international students make up just four percent of the overall undergraduate population, they pay, on average, two or three times more in tuition and fees than domestic resident students, making them an important financial base for some schools.”

A Shift in Attitude

Higher education is an expensive investment. The reality of student loans and long-term debt has many young people and their parents rethinking the perceived “value” of a college education. Many high school students choose to take gap years after graduation or enter the workforce straightaway.

Colleges and universities must do more to convince graduates and their parents of the advantages an investment in higher education offers. According to the Georgetown University Center on Education and the Workforce, individuals with bachelor’s degrees will make approximately 75 percent more money over their lifetimes than high school graduates. On average, those who earn a 2-year associate’s degree, which can be dramatically cheaper than a 4-year degree, earn 400k more over their lifetime than a high school graduate. That’s still a winning bet.

The Promise

Other Routes to Success

While lifetime earnings typically rise with each additional level of education, there are significant exceptions. A 4-year degree is not the only way to see lasting lifetime returns. In fact, The College Payoff: More Education Doesn’t Always Mean More Earnings finds that 16% of high school graduates, 23% of workers with some college education, and 28% of associate degree holders earn more than half of workers with a bachelor’s degree.

According to The College Payoff report, much of the variation in earnings within education levels results from differences in the field of study and occupation. Students who concentrate on increasingly popular Career and Technical Education (CTE) pathways, for example, that are often dedicated to high-paying fields in STEM, engineering, cybersecurity, and computer science, have the opportunity to out-earn some 4-year bachelor’s degree holders.

Often starting a CTE education while still in high school—for free— students are able to complete either certifications or degrees for less after graduation. About 8.3 million high school students—nearly half the U.S. high school population—were enrolled in one or more CTE courses in 2016-17. This growing higher education niche is a promising opportunity in a changing landscape.

An investment in technologies for efficiencies and accessibility

Proving higher education is a smart choice may require stronger marketing and communications efforts from schools. But colleges also need to back up those messages with a strategic investment in technologies aimed at delivering digital campus efficiencies and greater accessibility to educational opportunities for students.

McKinsey reports that more and more students are turning away from on-campus learning and towards hybrid and online approaches. This is especially true for adult learners earning their degree while working full- or part-time. McKinsey writes, “Institutions able and willing to develop new learning models are opening themselves to a vast market of prospective students, including adult learners … Private for-profit universities especially seem to benefit from adult learners’ willingness and preference for online modes of learning.”

The future is brighter for higher education institutions willing to adapt to and invest in the changing student landscape with the help of technology. Long-term strategic planning for a stable hybrid- and remote-learning solution and reliable partners to support those institutional goals are necessary.

While there will always be competing priorities and stretched resources, higher education must prioritize digital transformation to remain competitive and successful. Adopting a student-first approach to enrollment, financial aid and online learning experiences will lead to better student recruitment, retention, and outcomes.

Is your campus struggling with the challenges of new student enrollment? Removing the burden of paper-based processes can be a huge first step toward reaching your institution’s goals. Request an Etrieve demo and let us show you what’s possible.