The Looming College-Enrollment Death Spiral
After many decades of democratization, higher education could once again become a luxury good.
The “demographic cliff” is upon us. The number of teenagers graduating from American high schools peaked last year. It will begin declining this spring and keep falling steadily through at least 2041. The trend is more of a downward slope than an abrupt falloff, but the gradient is steep and represents a crisis to colleges dependent on filling classroom seats and dorm beds. The United States currently has about 4,000 colleges. According to a recent study from the Federal Reserve Bank of Philadelphia, about 60 are closing on average each year; that number could double in any given year if the bottom falls out of enrollment.
Over the past half century, as more teenagers have enrolled in higher education, what was once mostly a local business has become national, especially for top students, whose sense of distance has gradually shifted. Campuses that once felt far away now seem closer, thanks first to interstate highways, then to discount airlines, and then to technology. Parents in the 1980s might have talked to their college kid on a dorm-floor pay phone once every few weeks, if they were lucky. Today’s parents can text and FaceTime their kids multiple times a day.
Even so, roughly half of students at four-year colleges still attend one within 50 miles of home . The result is a market divided into two: one built on national brands that attract high-performing students from everywhere, and another that serves a local and regional population of place-bound students. Those two markets have hardened in recent years. Applications to the roughly five dozen campuses that accept fewer than 20 percent of applicants have skyrocketed, from nearly 800,000 two decades ago to more than 2.35 million today. This is largely why the admissions process feels so much more competitive to parents who went to college in the ’80s and ’90s. The pool of top students hasn’t grown that much. What’s changed is that the top students from Los Angeles and Chicago and Atlanta and Buffalo are now applying to the same schools, where the size of the freshman classes have barely budged since the ’70s. And each student is applying to more of these schools.
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