Looking Beyond the Enrollment Cliff

By Howard Teibel and Sam Gilden, Teibel Education Consulting

While this past year has been one of the most difficult in the history of higher education, there is beginning to be a growing light at the end of the tunnel. The emergence of the COVID-19 vaccine has brought a renewed sense of optimism. University leaders around the country are planning for a majority of their students to be vaccinated by the end of the summer or earlier, and fully reopening their campuses come fall.

Despite this optimism, though, it is important for these leaders not to let their guard down. The pandemic and subsequent recovery effort is not the only crisis these institutions will need to navigate and address in the coming years. Combine the lingering effects of COVID-19 with a major demographic shift coming in the next five years and it may be another entire decade until nationwide college enrollment is back on the rise. We are in an unprecedented time that calls for unprecedented action.

Whether a bust, a crash, or a cliff, the bottom line was the same: the enrollment crisis was coming. Prior to March 2020, the emerging story was the narrative surrounding a looming derailment of enrollment. This was the crisis that institutions were beginning to plan for. Back in 2018, the American Association of College Registrars and Admissions Officers, the leading authority in academic and enrollment services, made a bold prediction: over a 5-year period starting with the class of 2025, the number of college-going students would decline by 15%.[1]

Nathan Grawe, an economist at Carleton College in Minnesota, provided a geographical breakdown surrounding the future of enrollment and the anticipated changes in demographics around the country:

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Grawe projected that each of the largest states and metropolitan areas in the Northeast and Midwest would experience at least a 15% decline in college-going students by 2029.[2] While the implications for schools in these regions was obvious, colleges on the West coast may have dismissed this forecast as an “East-coast” problem. However, institutions draw students from all over the country, so a downturn in one geographical area would mean a smaller recruiting pool for everyone.

This anticipated decline in students was forecasted to hit us somewhere in the mid-2020s, unprecedented in its scope and magnitude, forcing all but the most elite institutions to adjust their strategic thinking and positioning. Unfortunately, another crisis hit first.

The COVID-19 pandemic has asked tough questions of both for-profit and non-profit industries, and higher education was no exception. Would currently enrolled students be willing to shift online at a similar tuition rate? Would incoming freshman be willing to enter college during this crisis? The National Student Clearinghouse Research Center’s (NSCRC) COVID-19 update from November 2020 provides us with some grounding to explore these questions:

1. “Postsecondary enrollment is down 3.3% compared to November 2019”

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While nationwide enrollment remained at a similar level through most of the 2010s, there was a slow and steady decrease in the years before COVID-19. The pandemic has accelerated this trend in ways we could not have anticipated.

Nearly every sector of higher education, from small private colleges to large public research universities, has experienced diminishing enrollment in the last year. Community colleges saw waves of new students pour in during the financial crisis of 2008 but are now experiencing severe enrollment declines. In fact, compared to the fall of 2019, “community colleges have shown the steepest decline among all sectors of higher education, almost 19 times the pre-pandemic loss rate.” [3] This crisis is unique because each sector is experiencing enrollment declines the likes of which they have rarely seen before.

Historical Perspective

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The 3.3% decline in postsecondary enrollment observed over this past year is a significant historical moment. The only times there have been single year declines this large was during the Great Depression, World War II, and the Korean War.[4]

Following each of these historic downswings, higher education saw commensurate rebounds – enrollment peaks in the years that followed the steep valleys. For example, the GI bill that was passed following World War II led to nationwide postsecondary enrollment more than doubling between 1943 and 1947.[5]

2. “Freshman enrollment has declined 13% from fall 2019”[6]

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Freshman enrollment is especially crucial to the future success of colleges and universities, as it represents four or more years of revenue in the form of tuition, room & board, and other expenses. 

This past year’s monumental dip in first-time freshman enrollment is especially alarming when you combine it with the fact that over the past decade, freshman enrollment declined every single year in succession. It is hard to imagine this number rebounding to pre-pandemic levels this fall even with a vaccine widely available and the high school class of 2020 returning from an unplanned “gap” year. Without the same level of new, incoming students arriving on campus, universities around the country may find themselves in a financial shortfall for years to come.

A Path Forward

There are already early signs that the trends observed last fall won’t be turning around anytime soon. The NSCRC, in their latest update released on March 11th, reported that there is “no quick turnaround in sight for undergraduate enrollment decline… spring enrollment appears to be showing the same level of enrollment losses overall as the fall 2020 trend.” Six weeks into the spring semester “undergraduate enrollment declined by 4.5 percent compared to last year.”[7] These early findings provide more evidence that we are not yet out of the woods when it comes to this crisis, and that it will be years until higher education fully recovers from the effects of COVID-19. While there have been surges in enrollment immediately following historical crises, we should not expect the same type of rebound this time around.

Prior to the pandemic, college executives thought they had years to address a looming enrollment crisis. They may have believed it to be a faraway problem or something that would only affect other institutions. The pandemic has brought this crisis to a head years before original enrollment cliff projections came to pass. This year should be seen as a test run for the looming and potentially larger decline in enrollment coming around the corner.

You can listen to Howard’s conversation with Nathan Grawe on Looking Beyond the Enrollment Cliff by visiting Teibel Education. In this conversation, we focus on the question “how will we navigate back to what Georgia Tech is framing as a return to better?”  The conversation with Nathan covers many important topics, including his most recent analysis of enrollment trends, issues of shared governance, and how we need to think about work as we come out of this pandemic.

In order to address a problem so impactful, leaders must think boldly and strategically. The obstacle standing in their way of making the changes this crisis demands is not a lack of capability. Their followers are willing and able to buy into ideas that will move their institutions forward. The problem is a deficiency that is embedded in university culture: The academy, administration, and their boards have competing interests, and as a result, are not focused on the same goals. These leadership bodies don’t collaborate authentically because they don’t believe themselves to be on the same team.

At Teibel Education, helping your institution overcome cultural obstacles is what we do best. We provide the facilitation of the most important and difficult conversations that your teams need to move forward. This is the work that will guide your organization on the path towards a culture that embraces positive change and innovation at every level.

To learn more about how Teibel Education can help your institution prepare for the future, reach out to Elise Kietzmann at ekietzmann@teibelinc.com.