In the past few years, colleges have experienced a decrease in enrollment rates that has ultimately led to several colleges merging with other schools or shutting down for good. In fact, undergraduate enrollment decreased by about 8% between 2019 and 2021, the greatest 2-year drop in enrollment in the last 50 years. In this year alone, colleges have experienced 1 million fewer enrollments compared to even before the pandemic began.
There are several reasons why enrollment is currently falling at colleges. One is the rising education costs that have increased faster than both inflation and growth in family income. More people have also acknowledged that a college degree sometimes doesn’t exactly translate into a job related to the major. An overall lack of interest in attending a 4-year college as well as a predicted smaller candidate pool have led to worries about the continuing fall of college enrollment.
The pandemic has also contributed to the overall enrollment decline. In 2020, 56% of U.S. college students could not pay their tuition anymore, so many of them had to find a new way to pay for costs or ultimately drop out in order to find full-time employment. With more than 30% of parents using their child’s college fund to pay for finances during the pandemic, some high schoolers have to change college plans after graduation. This includes choosing community or public college instead of a private one or considering a gap year before going to college.
Colleges are now seriously competing for students due to the declining enrollment so they can maintain their revenue from tuition. However, highly selective colleges have been faring better than community colleges during this time. For example, community colleges have seen enrollments fall by 15% in two years while highly selective universities experienced an increase in enrollment by 3%. Schools with fewer numbers of students have also struggled more than those with larger student capacities.
Schools like Ivy League universities also have the advantage of having degrees considered more valuable by the public than those at other colleges. Great endowments from charitable donations provide these schools with generous financial aid options for students as well to help with paying tuition.
Endowments can further help colleges fund school operations, student aid programs, research, fellowships, and public service missions. Schools that are able to use a small portion of their endowment every year can reduce the risk for the future market value of their investments. Interestingly enough, only a little over 100 universities have endowments that are worth more than $1 billion.
There are a few ways you can determine whether your college is at risk. These include researching possible tuition discounts, looking over the financial responsibility composite score, or reading through endowment and news reports. However, if your college does eventually close, you can get help or advice from local offices that provide legal aid or figure out whether you qualify for a full refund of payments and garnished wages.
The decrease in college enrollment is affecting schools throughout the country, so it’s important to keep this in mind when planning for your future.