USA: Las nuevas condiciones postpandemia de la economía política universitaria
Enero 23, 2023

The Shrinking of Higher Ed

In the past, colleges grew their way out of enrollment crises. This time looks different.
By  Karin Fischer, AUGUST 12, 2022


Nearly 1.3 million students have disappeared from American colleges during the Covid-19 pandemic, raising alarms that the enrollment emergency projected to arrive a few years from now is already here.

High-school seniors uninterested in studying online chose to defer. Working parents strained by the demands of full-time pandemic child care put their studies on hold. International students couldn’t get visas. Those in majors with hands-on practicums or lab work found they couldn’t register for courses required for their degrees.

Enrollment numbers continue to look bleak as the pandemic drags on, even though in-person classes have become the norm and consulates have reopened. College attendance among undergraduates has fallen almost 10 percent since Covid emerged in early 2020; this spring, enrollment dropped 4.7 percent from the year before, according to the National Student Clearinghouse Research Center, a deeper-than-expected decline.

The persistence of the enrollment contraction has sparked fears that many students are not simply missing but gone for good. Research shows that if students stop out, or take a leave of absence, they may not continue with their studies, and that’s particularly true for those from disadvantaged backgrounds. “We have to act now,” said Courtney Brown, vice president for impact and planning at the Lumina Foundation. “This is a crisis moment.”

The pandemic enrollment slide has heightened worries at colleges about finances, especially among those dependent on tuition revenue to meet their bottom lines. Even before the Covid outbreak, the financial resiliency of a third of American colleges was poor, according to a new report from Bain & Company.

Inflation is driving up colleges’ operating costs, and a volatile stock market is eating into endowment returns. Small private colleges, regional public universities, and rural institutions all face strong headwinds, according to the bond agency Fitch Ratings. Federal stimulus funds that helped many colleges avert closures are running out. The outlook, said Emily Wadhwani, senior director and sector lead for higher education at Fitch, is “weak getting weaker.”

Of course, doomsday scenarios have been floated before. Time and time again, in recent decades, American higher education has grown its way out of crises. Colleges have expanded access to underrepresented groups, added academic programs and amenities to attract students and charge them higher tuition, and struck private-sector deals to tap new markets.

Public confidence in college is sinking, and students and parents think tuition is too high. Skepticism is mounting toward the idea that a college education should be the prerequisite for well-paying jobs, and in a tight labor market clamoring for workers, some people are landing them without a degree. Already, nearly seven in 10 high-school graduates immediately go on to pursue, although not necessarily complete, some sort of postsecondary education, and the remainder may be difficult to recruit. The students left out of higher education have been notoriously difficult for colleges to reach and serve. And then there’s the looming demographic cliff created by the sharp drop in birth rates that began in 2007.

“There really is an arithmetic problem here,” said Anthony P. Carnevale, director of the Center for Higher Education and the Workforce at Georgetown University. “There aren’t going to be enough students to go around.”

In many ways, the pandemic’s effects on enrollment have been specific and unique. Higher education is typically countercyclical; that is, people enroll in college when the economy goes south, to get skills or because they can’t find a job. Despite a small recession in 2020, enrollment has fallen throughout the pandemic, bucking that tendency.

Although the trend line has been consistently downward, there has been variation in who is missing from college. In the first year of the pandemic, enrollment drops were greater among men and traditional-age students. A big chunk of the gender disparity, at least at the two-year-college level, researchers have found, was because of men’s higher enrollment in hands-on programs like welding and auto mechanics, which were harder to teach online or in socially distanced ways in the pandemic’s early months.

This spring, the patterns were reversed, and enrollments of women and students older than 25 fell more sharply, as the number of new freshmen picked up.

Nonetheless, the pandemic offers “painful” lessons for colleges’ continuing efforts to attract students, said Nathan D. Grawe, a professor of economics at Carleton College. Enrollment losses were particularly deep in areas with larger low-income and minority populations, groups colleges have lagged in admitting. “Covid damaged the relationship between colleges and underrepresented groups, and it could make it harder to recruit,” Grawe said.

Likewise, community colleges and less-selective four-year institutions, already struggling for students, sustained a greater hit during Covid. Grawe said he is heartened by some early signals about fall enrollments, such as a rebound in applications for federal financial aid, but only cautiously so. “Even if you have success in recruitment,” he said, “you’ve only won last year.”

Grawe knows better than most the daunting demographic challenges facing American colleges. In a pair of books, Demographics and the Demand for Higher Education and The Agile College, he has outlined the impact of an abrupt drop in high-school graduates, beginning just a few years from now, in 2026. Certain types of institutions and certain regions of the country will feel the scarcity of prospective college students more acutely. Grawe projects that over the following decade, the pool of applicants for two-year and regional four-year institutions could contract by 10 percent.

Still, the demographic cliff has been looming for years, ever since birth rates fell during the recession of 2008-9. Like the dust on the horizon stirred up by a horseback rider in a classic western, future population bubbles and busts can be seen far out, as groups of students move through elementary and secondary school, said Patrick Lane, vice president for policy analysis and research at the Western Interstate Commission for Higher Education, or Wiche, which also studies enrollment trends. “These effects show up in the data and stick around for a long time.”

Given that, should colleges have been better prepared for an enrollment contraction?

If higher ed was caught unprepared, the reason might be rooted in the past. This isn’t the first time demography has appeared to hold colleges’ destiny. In the past, higher ed has always managed to grow its way out. This time, were colleges overconfident that past solutions would work again?

The decades following World War II saw an energetic expansion of higher education: Teacher-training schools became full-fledged colleges, community colleges sprang up across the country, and grand state-university systems, like those in California and New York, welcomed waves of students, first returning GIs and then the children of the baby boom.

But by the early 1980s, the last of the baby boomers were moving through college. The group of students then coming of age were from a period in which birth rates had dipped; they would later be dubbed Generation X.

Because of the Gen X baby bust, Wiche projected that the number of new high-school graduates in the United States would drop by one-quarter between 1979 and 1994. In certain Northeastern states, the fall-off was predicted to be far steeper — by more than 40 percent in Connecticut, Massachusetts, and New York, and by nearly 50 percent in Rhode Island.

Earl Cheit, an economist who served as dean of the business school at the University of California at Berkeley, warned that American colleges were on the brink of a “new depression.” Other forecasts suggested that between 10 percent and 30 percent of colleges could be forced to close by the mid-1990s, thanks in part to declining tuition revenue.

“The tone of the Golden Age of the 1960s was one of euphoria, of expansion, of new endeavors,” the influential Carnegie Council on Policy Studies in Higher Education wrote in a sobering 1980 report. “The new tone of the advancing demographic depression is now more one of concern and even despair, of concentration on contraction.”

“Excellence was the theme,” the Carnegie authors added. “Now it is survival. Institutions were trading up; now they are trading down.”

Let us save you the suspense: The collapse did not occur. While the number of high-school graduates did decline, college enrollments did not. Over the next 15-year period, in fact, they climbed by 23 percent, according to data collected by the National Center for Education Statistics.

The Gen X enrollment crisis was averted by two factors, according to Paul E. Harrington, director of Drexel University’s Center for Labor Markets and Policy. First, more women, including adult learners returning to school, enrolled in college. In the late 1970s, men and women attended college in roughly equal numbers. By the mid-1990s, women accounted for 55 percent of enrollments.

The period also coincided with a historic shift in the American economy, away from one driven by manufacturing. It had previously been possible to earn solid, middle-class wages without a college degree — or even a high-school diploma. In New Britain, Conn., then the “hardware capital of the world,” the high school held “exit” ceremonies in the 1960s for teenage boys who left before graduation to take skilled-trades jobs in local factories; by their early 20s, many of them had saved enough to buy a house, Harrington said.

In the new service-and-knowledge economy, the salaries of college graduates began to rise, while earnings of those with a high-school diploma or less fell. In 1980, young college-educated Americans made 23 percent more than their high-school-graduate counterparts, and by the end of the decade, the college-earnings premium had doubled. By 2019, recent bachelor’s degree graduates out-earned young high-school grads by 77 percent.

The changing economy provided a clear financial incentive to go to college. Even as the number of high-school graduates declined, the share who enrolled in college right after graduation shot up, from 51 percent in 1980 to 61 percent in 1990. “The opportunity costs for going to college kept falling,” Harrington said, “while the gap between those with a college degree and those without kept growing.”

If higher-education experts were skittish about a potential dip in enrollments entering the 1980s and 1990s, it was because they had only recently experienced a contraction. In that case, the culprit was the draft.

With the Vietnam War raging, the most sure-fire route to a deferment from mandatory military service was to enroll in college. As a result, college numbers swelled in the late 1960s and the early 1970s, with young men who might have otherwise entered the work force. A pair of researchers, David Card of Berkeley and Thomas Lemieux of the University of British Columbia, estimated that conscription avoidance raised college-attendance rates by 4 percent to 6 percent during that period and the share of draft-age men with a college degree by 2 percent.

In early 1973, President Nixon ended the draft, reducing college’s attractiveness as a safe haven. But as the bulge in enrollments moved through the system, the supply of college-educated workers exceeded demand for them, at a time when manufacturing employment was at its peak. That oversupply depressed graduates’ wages, further dampening the appeal of a higher education. For the first time in decades, enrollments fell.

John R. Thelin, a professor emeritus at the University of Kentucky and author of A History of American Higher Education, said declining enrollments weren’t the only pressures colleges, and their financial model, faced. High inflation and skyrocketing oil prices hit college budgets hard. Thanks to campus expansions, institutions had hundreds and hundreds of new buildings to heat and light. Some colleges found themselves in the red.

Nor did college leaders feel confident that elected officials, in Washington or in the statehouses, would help alleviate their financial distress. Widespread campus protests over Vietnam, civil rights, and free speech had soured public opinion. The Carnegie Council, in a retrospective report with resonance for today’s college leaders, said the unrest had “shattered confidence on campus and support in the community.” Some officials, like Gov. Ronald Reagan of California, had even successfully run for office vowing to “clean up the mess” on campuses.

But the U.S. Congress ended up taking action that helped reverse the enrollment decline. In 1972, lawmakers approved the creation of a direct, need-based student financial-aid program. The Pell Grant helped expand access to a new group of students who might previously not have been able afford college — by 1976, nearly one in five students got an award. “Financial aid became key to admissions,” Thelin said.

And admissions, along with other campus student services, began to become more professionalized during this period, focused on strategies to attract, recruit, and retain students. Having stumbled into an enrollment downturn, colleges became more deliberate to dig themselves out.

Enrollment declines haven’t always been the chief cause of colleges’ financial distress.

During the recession of 2008-9, student numbers actually rose; at some community colleges, demand was so great that they offered classes before dawn.

But college budgets took a body blow: Endowment returns bottomed out. As unemployment rates rose, fewer families could afford private-college tuition. In public-college systems, spending per student plummeted, falling, on average, 18 percent between 2008 and 2011. Nearly a decade and a half later, support has never rebounded to pre-recession funding levels in more than half the states, according to the State Higher Education Executive Officers Association.

Again, for many colleges, the answer was to grow, this time online and overseas. Online education had typically been seen as the realm of for-profit institutions, but now more nonprofit colleges pushed into the space, hoping to leverage national, or even regional, reputations to reach a fresh crop of students. Some, notably Purdue University, struck deals with private companies to expand their reach, while others sought outside help in administering their virtual-course offerings.

By going online, they hoped to take the college classroom to students who lacked the time or flexibility to make it to campus.

The other new market was international students. American graduate programs had long drawn the best and brightest from around the world, but the recession coincided with a new global demand for undergraduate education. The hunger was especially great from China, which had a burgeoning middle class with the means to pay for a top American degree.

Between the recession and the pandemic, international enrollments soared by 76 percent, to nearly 1.1 million. Two-thirds of that growth was at the undergraduate level, where the majority of students pay the full costs of their degree.

The influx of international tuition revenue was a life-saver, at least for some colleges. Research published by the National Bureau of Economic Research found that as states spent less of their budgets on higher education, international enrollments rose. At public flagships and other research-intensive institutions, a 10-percent decrease in state appropriations over a decade and a half was accompanied by a 17-percent increase in foreign enrollments. At some institutions, international students accounted for 40 percent or more of new tuition revenue.

Not all colleges benefited, however. Bachelor’s and master’s-level institutions did not see tuition gains from enrolling international undergraduates, according to a study by Brendan Cantwell, an associate professor of education at Michigan State University. And a 2015 analysis by The Chronicle found that over a 10-year period, just 10 percent of colleges absorbed 70 percent of the international-student growth.

Likewise, not all colleges have the high profile or the special niche to attract students to online programs, said Jeffrey Selingo, a senior fellow with the University Design Institute at Arizona State University and a former editor of The Chronicle. “These are not levers that all colleges can pull.”

And international enrollments, which fell sharply during the pandemic, had already begun to soften before Covid struck. Because of fierce global competition, the establishment of good universities in students’ home countries, and an unwelcoming American political climate, few experts expect foreign-student numbers to return to the days of double-digit growth.

With brand names and mega-universities like Southern New Hampshire University, which have a broad reach and sophisticated strategy for attracting students, already crowding the online-education market, there may not be space for new entrants. Government scrutiny of colleges’ deals with third-party online-program managers could increase.

Women, too, may be tapped out as a growth market. After all, they now account for 57 percent of the students at American colleges and an even higher share of the degrees earned.

Looking around, what’s the next new thing?

“Colleges are mining strategies of earlier generations,” said Thelin, the higher-ed historian, “and they’re running out.”

The pandemic could extend colleges’ challenges beyond the looming demographic cliff. A 2021 study of public-school enrollments by Wiche found that while high-school-graduation rates actually went up early in the pandemic, primary- and middle-school grades saw steep enrollment declines. There were 4 percent fewer sixth graders in the fall of 2020, for example, than in the previous year. It’s unclear if such declines are permanent or temporary, but they could affect the pool of future college students. Learning loss during the pandemic could also have an impact on college readiness.

Much like the 2008-9 recession, Covid appears to have caused a baby bust, accelerating already declining birth rates. That could affect the college pipeline well into the next generation. “Ten, 15 years from now,” Lane, the Wiche vice president, said, “we’ll be coming back to the pandemic.”

To stop further backsliding, colleges will need to recruit and retain the very students they’ve historically struggled to attract, including students from low-income and minority backgrounds. College-graduation rates for Americans in the lowest income brackets have barely budged over the last 50 years. The share of Black, Hispanic, and Native American adults with a high-school diploma or less is much higher than for the population as a whole.

Although nearly half of all undergraduates are now students of color, achievement gaps remain, especially for Black students. During the pandemic, the share of students coming from high-poverty high schools or those with large minority populations dropped sharply, and many of these students have been slower to return to college.

Anthony Carnevale, of Georgetown, noted that colleges could face an additional handicap in recruiting minority students if the U.S. Supreme Court further limits, or even strikes down, affirmative action. The court agreed to hear arguments in two cases that could have major implications in how colleges consider race in admissions.

So who’s left to enroll? This year, Selingo invited three college presidents from three very different institutions — a large public university, one of the nation’s few work colleges, and a women’s college with a diverse, low-income student body — to share their predictions for the next five years on a podcast he co-hosts called FutureU. All three answered the same way: a focus on nontraditional students.

Adult learners are a huge potential pool of students — some 39 million Americans alone have attended college but left without a degree. Enrolling even a portion of these students could help soften the impact of the demographic cliff, or make up pandemic student losses.

Some of these former students may be open to returning. A recent survey by Gallup and Lumina found that 56 percent of one-time students who stopped out before the pandemic would be open to re-enrolling. In addition, 40 percent of adults surveyed who had never attended college said they would consider going to college, with most interested in an associate degree or certificate.

But interest is one thing. Action is another. In the Gallup-Lumina survey, adults cited work and family obligations as major hurdles to returning to college. And many colleges lack the administrative structures to re-enroll and retain adult learners, although a number of states and nonprofit groups have begun efforts to help support nontraditional students.

Major efforts to enroll adult students have struggled. An online-only community college in California meant to serve the 2.5 million state residents between ages 25 and 34 without a degree had awarded certificates to just 70 students through its second year of operation.

The biggest barrier to attracting new students or luring back those who have left, though, is cost. More than half of the respondents in the Gallup-Lumina survey said it was why they had not enrolled. A third of current students who have considered dropping out also cite cost as the cause.

For colleges that have not been able to tap new markets to expand their enrollments, their growth strategy has been tuition. Over the past four decades, the average cost of an undergraduate education has increased by 175 percent, according to the U.S. Department of Education.

Cantwell, the Michigan State professor, said tuition increases may no longer be feasible. Families are maxed out — only a third of the youngest Americans, including current college students and recent graduates, said it was possible to get an affordable education beyond high school, according to a survey by New America; less than half of millennials and Generation X-ers agreed. With inflation rising, small tuition increases will no longer cover colleges’ increased costs, Cantwell said. “It’s just off the table.”

The New America survey found that a majority of Americans would like the government to pay more of the costs of college. But the future of political proposals to help defray costs is uncertain, and Carnevale points out that efforts like free college wouldn’t help maintain or expand access and enrollments at all colleges — just at public institutions. Recent legislative proposals have focused only on making two years of community college tuition free.

Meanwhile, Carnevale said, elected officials may be sending a mixed message on college. Infrastructure legislation passed by Congress last year will create nearly eight million jobs, at least temporarily, that don’t require a college degree. And every time a ribbon-cutting ceremony is held for a new infrastructure project or work-force-training program, a local reporter will ask the assembled politicians whether people need to go to college to get a good job, he said.

The answer is, as it has been since the decline of the manufacturing era, that a college degree is the most sure-fire way to economic security. Of the 35-million job openings in the next decade, according to estimates by Carnevale and his Georgetown colleagues, 40 percent will go to workers with college degrees, and another 30 percent to people with at least some postsecondary training.

When it comes to “good jobs,” defined by the Georgetown center as those paying a salary of at least $45,000 at midcareer, three-quarters of those held by college graduates qualify. Only a third of workers with a high-school diploma or less have a good job.

Yet, that message is not getting through. Two-thirds of respondents in the New America survey said it was possible to find a stable, well-paying job with just a high-school diploma or GED.

In fact, Americans may be hearing the opposite message — that college is not the golden ticket to a good job in the new, high-demand labor market. Governors in Maryland and Colorado have told state agencies to drop four-year-degree requirements in hiring for state jobs. Under a new law in Arizona, public-school teachers no longer need to have earned a degree, just be enrolled in college.

And a new national advertising campaign is urging employers to look beyond the “paper ceiling” of a bachelor’s degree when hiring. Instead, job seekers could gain necessary skills through apprenticeships, boot camps, credentials, and certifications.

Of course, colleges, particularly two-year institutions, offer badges, microcredentials, and other short-term training. But they face competition from companies, nonprofit groups, and other educational providers.

The rise of alternative educational models is “challenging the connection between higher education and the economy,” and not just in the United States, said Simon Marginson, a professor of higher education at the University of Oxford and an expert on global and comparative education. “Our understanding of the relationship is shifting.”

That shift could be away from college, just as institutions need to attract new students.

If higher education cannot grow, does it shrink?

That will not be so easy to do. You can’t unbuild buildings. Administrative structures — many of which have been put in place to support the nontraditional students who are seen as a way out of enrollment woes — are difficult to dismantle. Although colleges have hired more adjunct instructors in recent years, the strictures of tenure work against making cuts in the faculty ranks.

Over the past decade, in fact, there has been a mismatch between faculty hiring and enrollment trends. Even as the number of students enrolled in public colleges declined, by 6 percent, faculty ranks increased by 3 percent, according to a Chronicle analysis of U.S. Department of Education data. Private nonprofit colleges gained students — enrollments between 2009 and 2020 increased by 9 percent — but hiring increased faster, by 18 percent.

While community colleges lost nearly a third of their faculty work force during that period, the enrollment decline was even steeper, 35 percent.

Administrative overhead has also increased over time, with colleges adding nearly 110,000 administrators over a decade. In 2010, there were 78 full-time undergraduate students for every full-time management staff member. By the fall of 2020, the ratio had dropped, to 38 undergrads per manager.

College boards hire presidents and chancellors for their ambitions, not to make subtractions, said David F. Labaree, a historian of education and a professor emeritus at Stanford University. “You don’t compete by cutting costs. You compete by adding special services and new programs and fancy dorms,” said Labaree, author of A Perfect Mess, about American higher education. “As a university president, you don’t make your name and fortune by preparing for the decline.”

But at least one campus leader is volunteering to be the president of retrenchment. At Henderson State University, in Arkansas, Charles Ambrose, the president, cut 25 degree programs, eliminated 57 administrative positions, and laid off 67 faculty members, 44 of them with tenure, after declaring financial exigency. The college will focus its curriculum around academic programs with demonstrated student and employer demand.

“We’re now having to deconstruct the things that we once invested in because they don’t offer returns to students,” Ambrose said in an interview.

Ambrose acknowledges that Henderson State’s situation was dire — the college wouldn’t have been able to make its next payroll without the emergency measures. But at many other colleges, he said, the financial model simply is no longer sustainable, especially at small private and regional public colleges like his.

“This next generation of leaders isn’t going to have the option of kicking the can down the road,” he said, “because we’re out of cans.”

Yes, there are a privileged few institutions that can still keep growing. Highly selective colleges will be touched less by the demographic contractions in Grawe’s analysis, their pedigree and profile attracting applicants from across the country and around the world. And large public universities, the flagship institutions, will be able to pull in students. You can already see the bifurcation this fall, as some colleges worry about meeting enrollment targets, while for the others, the headache is how to house all their new students.

Thelin has seen it at his own institution, the University of Kentucky. Even though overall college-going rates in the state have declined slightly in recent years, the student body has grown over the past two decades. There is one more lever to pull, after all, and the growth market is students who might have gone to college elsewhere. “It’s almost like social Darwinism,” Thelin said.

Back in the beginning, in the 19th century, American higher education grew wildly and unchecked. Many colleges were founded by religious groups, and every denomination had its own institutions. In a frontier society, colleges stood for legitimacy and civilization, and communities sought them out, to put themselves on the map. By 1880, Labaree said, Ohio had more colleges than in all of France.

It’s in American higher education’s DNA, then, this growth mind-set. And now the growth may have reached its peak.



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