Enrollment figures from the past year, combined with early data for fall 2021, indicate that—with a few notable exceptions—the pressures on higher ed institutions increased significantly during the COVID-19 pandemic. Even before the pandemic struck, enrollment numbers were declining as higher education approaches the “demographic cliff”—an expected sharp fall-off in enrollments for traditional college-age students beginning in 2025, resulting from a decline in birth rates that began with the financial crisis and recession of 2008. Low birth rates during the COVID pandemic have created a “second demographic cliff,” but as noted here, this is only one of several factors that will continue to reshape higher education in the years to come.
The pandemic’s effects on enrollment offer a preview of what lies ahead across key higher education sectors:
- Overall college and university enrollment fell by more than 3% nationwide for fall 2020 term, with significant regional variations. In the Midwest, for example, enrollments were down 4.7% in 2020. Early National Student Clearinghouse data for fall 2021 indicate that undergraduate enrollment fell another 3.2%, for a total decline of 6.5% since the pandemic began.
- Impacts were unevenly spread among highly selective public and private institutions and other institutions. The preliminary National Student Clearinghouse data for fall 2021 show that highly selective institutions have returned to pre-pandemic enrollment levels, while enrollment across all other selectivity categories continues to fall.
- Two-year community colleges were hit particularly hard. Public two-year institutions experienced a 15% decline in enrollment in fall 2020, compared with fall 2019, with approximately 703,000 fewer students enrolled. Early fall 2021 data show that the freshman class at community colleges is now 20.8% smaller than the 2019 class.
- First-time graduate school enrollment was up 1.8% in fall 2020 from fall 2019; the application rate increased even more (7.3%). Graduate school enrollment increased again by about 2% in fall 2021. The underlying data show some mixed trends:
- Although undergraduate international student enrollment continues to fall, graduate international student enrollment has recovered to pre-pandemic levels.
- The number of new graduate students enrolling in full-time programs decreased by 3.7% in fall 2020, while part-time enrollment grew by 13.5%. Part-time enrollment also grew at the undergraduate level; early fall 2021 data show that at four-year not-for-profit private institutions, part-time enrollment is up 5% over pre-pandemic levels.
- Preliminary fall 2021 data show growth across all graduate degree types, with certificate programs growing the most, up 9% over 2019 levels.
- The for-profit sector experienced enrollment growth in fall 2020, with average enrollment up 3% over fall 2019, but early fall 2021 data suggest that enrollments at both for-profit and primarily online institutions may have softened.
Some impacts of the pandemic may be short-term. The picture for on-campus learning, for example, has been much brighter in fall 2021 than it was in fall 2020, although many institutions are still offering remote or hybrid courses. But other impacts will be permanent or will soon be felt again as colleges and universities approach the demographic cliff. Building off the enrollment data cited above, here are some key trends that we believe will affect higher education over the long term:
The pool of traditional students is shrinking. For most institutions, growth opportunities will lie in attracting more non-traditional students. A recent analysis of post-secondary “learners” in the U.S. across all age segments found that traditional learner segments—undergraduates attending a residential four-year institution on a full-time basis—made up less than 25% of the full universe of learners interested in post-secondary education. Students outside the traditional learner segments often will have significant family or job commitments and—as we have seen during the pandemic—will be seeking programs that offer part-time enrollment options and flexible course schedules.
International student enrollment will be less reliable. Changing immigration policies had already begun to affect international student enrollment before the pandemic struck. Despite a promising rebound in graduate international student enrollment this year, growing competition for international students from other countries will be a significant factor over the longer term even if U.S. immigration policies become more accommodating.
The divide between highly selective and other institutions will persist or grow. The value of a college education is coming under increased scrutiny, especially as the cost of higher education continues to rise. Institutions with a strong “name brand”—including highly selective private institutions and flagship public universities—will have a distinct competitive advantage.
Digital capabilities will be a key differentiator. Community colleges were expected to benefit from countercyclical enrollment trends when the economy slowed during the pandemic, but they did not. For-profit colleges, on the other hand, saw increased enrollments in 2020. Many of the for-profit institutions had robust online programs and delivery processes in place before the pandemic struck, which positioned them to increase enrollments during the pandemic shutdowns. As competition for non-traditional students seeking flexibility grows and students become more accustomed to online learning, a robust digital strategy will enhance an institution’s ability to compete.
Growth in certifications and other degree alternative programs will continue. Institutions will also face new competition from technology-driven college substitutes and degree alternatives. The strong growth in graduate certificates awarded was not just a response to the pandemic; more employers are dropping degree requirements to expand and diversify their talent pools. Certificates and other credentials demonstrating competency in specific skillsets—obtained more quickly and at a lower cost than that of traditional bachelor’s or master’s degrees—will become increasingly attractive to students and employers alike.
Most colleges and universities are vulnerable to at least some of these trends, and some already are experiencing the full force of their impact as the number of higher ed closures and mergers continues to rise. Now is the time for higher education leaders to assess the current state of their institutions and the strategic options available to them.
With this post, we are launching a new series on strategic options for colleges and universities. Next month’s post will look at key internal factors institutional leaders must assess to understand what strategic options are available to them. Such factors as current financial strength, existing infrastructure, geography, academic programs, institutional culture, and alumni and other philanthropic support will all affect the resources and time that an institution can devote to a new strategy. Subsequent posts will offer a framework for identifying and evaluating strategic options in light of an institution’s current capabilities, followed by a deeper look at several of these options.
We look forward to sharing our thoughts with you. As always, we are interested in your thoughts as well. Please reach out to us at email@example.com or firstname.lastname@example.org to share what you are seeing in your market and how your institution is responding.