The higher education landscape is about to shift. A recent report paints a concerning picture: a college enrollment “demographic cliff” that begins this year, with a steady decline in 18-year-olds expected to start college.
This trend will create lean years for colleges and universities eager to grow enrollment amid a changing economy.
18 Years Ago: U.S. Birthrate Begins to Decline
The collapse of the U.S. housing bubble in 2007 led to an economic downturn, widespread job losses, foreclosures, and a sense of financial insecurity for millions of Americans. For many families, this meant delaying major life decisions such as having children.
Furthermore, the fallout from the housing crisis led to an economic recession, creating stagnant wages and rising childcare, education, and healthcare costs. These financial pressures disproportionately affected younger adults and resulted in a dip in birth rates that hasn’t truly recovered except for a slight bump following the COVID-19 pandemic.
The last college enrollment spike occurred leading up to the Great Recession, corresponding to the rising birthrates of the late 1980s, making a strong argument that the number of high school graduates directly impacts college enrollment.
Fewer Students, More College Closures
Higher education institutions saw a 15% decline in enrollment between 2010 and 2021. This, coupled with the projected decrease in high school graduates, could lead to a wave of college closures. Nearly 20 non-profit institutions closed just last year. Most of the colleges that closed cited declining enrollment as the leading factor. The next couple of years will create a buyer’s marketing for prospective students. Colleges need to become more creative with their enrollment strategy to stand out against the competition.
Addressing the Demographic Cliff
The college enrollment demographic cliff presents a complex set of challenges.
- Re-evaluating the Value of Higher Education: A recent decline in the perceived value of a college degree needs to be addressed. Highlighting the connection between higher education and career opportunities is critical. Job outlook experts predict that 70% of jobs will require “some form of career-connected postsecondary education and training” and over 40% will require a Bachelor’s degree. Colleges need to track their students after graduation and prove successful outcomes in their programs of choice.
- Student Loan Debt Stigma: Colleges need to address the stigma surrounding student loan debt and better support students with their repayment. There’s still a strong return on investment for a college education in in-demand career fields and student loan debt is worth taking on to work those jobs. If colleges can reassure students that their student loan payments will be manageable, more students will pursue a higher education.
- Adapting to a Changing Environment: Colleges must adapt to a rapidly evolving landscape of student learning preferences and technological advancements. The college students of 2025 and beyond will be comfortable leveraging AI and demand instruction styles that lean toward an online or hybrid experience.
Likewise, the rise of AI presents opportunities for colleges to use advanced data engineering and machine learning to build enrollment models that predict which students are most likely to attend and succeed. These models can streamline enrollment strategies so admissions teams spend time targeting prospects with the highest likelihood of conversion.
IonTuition: Your Partner in Strategic Enrollment Management
IonTuition’s LinQ Enrollment platform provides the systems and support colleges need to overcome the demographic cliff. When combined with IonTuition’s Default Aversion solution, colleges have support for the entire student lifecycle: from enrollment through student loan payoff. Contact our sales team today to get started.