ExtensionEngine Blog

Winter Is Coming for Higher Education

It’s not personal it’s demographic.

College enrollments are going to seriously ebb within the next few years due to a complex set of circumstances that have more to do with demographic shifts than economic ones. That’s not to say, however, that economics are not at the root.

The great recession of 2008 impacted all the usual suspects, such as the labor market and the stock market, but its ripple effects are now reaching new territories. In response to that sweeping financial crisis, birth rates dropped by 13%, and the full impact of it will become clear when college enrollments take a serious hit beginning in 2026.

This was not entirely unforeseen, but in the recent book Demographics and the Demand for Higher Education, Nathan D. Grawe, professor of social sciences at Carleton College, paints an even bleaker picture than was previously observed.

He believes existing forecasts of high school graduates don’t project accurate numbers, which already show a decline. Using a proprietary formula, Grawe applies probability factors from demographic trends to census data to develop a more nuanced forecast.

Its sobering conclusion: The number of college-age students will drop by 15%. Those numbers tell the story fewer applicants equal a calamitous drop in applications and enrollment. This is grim news for most, but not all, colleges and universities.

The top fifty schools will continue to do well as long as they utilize their resources to prepare and adapt. However, a great number of schools around the country will need to dramatically adjust.

Competition is about to get fierce due to several factors, including:

  • the plentiful number of millennials who are aging out of their college years
  • the number of private and nonprofit institutions that are losing their recently gained online students to an increasing number of competitors with greater brand recognition
  • the aging demographics in the Midwest and Northeast, where schools draw disproportionately from their regional populations

Not only will the number of students be lower, but with Boomers beginning to retire in droves over the next decade, a tight labor market may lure prospects into starting careers early with zero school debt. Employee-starved industries like the trades and health care may also compete by dangling subsidized on-the-job training to scoop up people from the same shrinking pool.

Competing When the Stakes Are Higher

In a free and open market, the thing to do when faced with a challenge is to “up the ante” that is, increase the added value. Therefore, weathering the oncoming enrollment “winter” will require outside-the-box thinking and strategic planning to cultivate that added value.

Evolving an online presence (if there’s not one already) and finding niche revenue sources will be mission critical. For example, it will no longer be enough to simply supply online classes that are template-driven, one-size-fits-all packages.

Upping the ante means creating learning experiences that engage learners, provide opportunities to interact with professors and other students, and offer practical ways to apply that knowledge.

Combining the technology and convenience of online opportunities while still fostering that crucial relationship between educator and learner is a differentiator, and that synthesis results in vastly superior user experience and educational outcomes than online program managers (OPMs), learning management systems (LMS), and other off-the-shelf, undifferentiated distance learning programs.

Real-impact measures serve not only as instruments for promoting a school’s differentiators but also as channels for generating revenue and amplifying brand presence in the marketplace.

Grawe believes his weighted forecasts can help campus leaders plan for the future and adapt as necessary to fill seats in the coming decades both in the classroom and at home with students of all ages.


Continue reading:  At the 2018 Eduventures Summit in Boston, a panel of representatives from Harvard Business School (HBX),ArtCenter College of Design, Moravian College, and ExtensionEngine discussed the following tenet:

In a crowded market, higher ed institutions should create online learning that is differentiated, conforms to their core pedagogy, and delivers great learner experience.

You can watch the recorded discussion here.

VIEW THE DISCUSSION