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Industry News and Information

Why is higher education enrollment dropping so fast?

Photo courtesy of Shutterstock.
Photo courtesy of Shutterstock.
Steven Rothberg AvatarSteven Rothberg
January 20, 2022


A recently published study by the National Student Clearinghouse Research Center shows a massive 3.5 percent drop in undergraduate enrollments from 2020 to 2021 and an even more massive decline of 7.8 percent from 2019 to 2021. For many schools, that’s the difference between them balancing their budget and losing a lot of money. For some schools, a couple of more years like this and it will be the difference between staying in business and closing their doors.

I see the decline in enrollment as being temporary and partly as a result of some short-sighted and, quite frankly, greedy decisions taken by the schools and partly a function of a job market that is probably the most favorable to candidates that it has ever been. Starting in January 2020 and, certainly, by February, C-suite leaders at the schools should have seen that Covid was going to necessitate a major change to how they delivered their services. Instead of being proactive, they chose to be reactive and not transparent with students who were deciding whether to enroll for the fall.

I suspect that the schools knew that a significant minority and perhaps even majority of students would choose to pause their education until they could again live on or near campus and attend classes in-person and so the schools required the students to pay their tuition in full as if classes would be in-person and then went virtual, so the schools chose to deliver less than full value but charged as if they were delivering their services normally. Given that the students were not receiving full value for what they were paying, many chose not to allow the schools to do the same thing to them again and so did not re-enroll for the 2021-22 year and probably won’t again for the 2022-23 year. 

The job market this year reminds me of the job market for information technology and computer science majors in 1998 and 1999 when the Internet was starting to boom and Y2K was a huge concern for almost every organization. There were far more job openings than there were candidates, and so employers started to aggressively court students well before graduation and encourage them to drop out of school so they could work full-time for those employers. That seems to be happening again now, except across all occupational fields. Some employers are so desperate for talent and so unconcerned about the long-term well-being of their employees that they’re encouraging students to drop out of school for a paycheck that may be nice for months or a few years but not for the long-term careers of those employees. 

How are these two issues connected? Well, on the one hand you have schools charging for one product (in-person learning) and delivering a vastly inferior product (hybrid or even fully virtual) while, on the other hand you have employers finally paying well, treating their employees well, or even both. Who can blame a 19-year-old for deciding that it makes little sense to spend a lot of money on an inferior college education that they only wanted in order to get the kind of job that they can now get without incurring tens or even hundreds of thousands of dollars of student loans?

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