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from Ray Schroeder, Senior Fellow at UPCEA

A Dozen Years of Decline

For 150 years dating back to the 1800s, college enrollment in the U.S. experienced annual growth in enrollments with only a handful of short-term drops during wars and other major societal events. That record of steady increases was disrupted a dozen years ago, by the recession of 2007 to 2009 and has never recovered. Of course, the pandemic triggered a drop, but the predictions that following that drop in 2020 and 2021, enrollments would once again be on the rise in 2022 were wrong. The numbers continued their decline and have not shown a year-over-year increase for the past dozen years.

Despite the long decline in overall higher education enrollments, the percentage of students enrolled in online and distance education has vigorously grown. Yet, many institutions – particularly small and mid-sized universities depend upon on-campus, residential student enrollments for their financial well-being. Without those on-campus students, the costs of operating and maintaining housing, food services, and related revenue-intensive affordances are no longer covered, generating further deficits. The result has been a rise in recent closures and mergers. Often the media focus is on closures – and there have been plenty, with hundreds more colleges now deeply in debt – but, too often we fail to notice the number of mergers. In just the past four years, there have been 95 college mergers, that is more than four times as many as in the prior 18 years, with more on the way.

As colleges and universities suffer enrollment declines, the knee-jerk response has been to raise tuition to make up the revenue deficit. Of course, that drives up student loans. Now, we are approaching $1.75 trillion dollars in student debt. It is startling to see the chart of the rise of more than a trillion dollars in debt over the prior dozen years. At this point, the initiatives crafted to create one-time, partial relief appear to be doomed. Even if partial forgiveness initiatives were to be successful, that would not get to the real cause of the problem, instead we would continue to grow the debt at the same rate, or even faster, from that point. The staggering sum of nearly two trillion dollars stifles growth of the economy and takes an untold toll on the careers of Americans. Paying the principal and towering interest of student loans over decades depletes the spending power of professionals. That, in turn, puts pressure on employers to provide ever-higher salaries to cover the costs to retain satisfied employees.

Increasingly, employers have stepped up to try to break the cycle by no longer requiring degrees for many positions. These include corporate giants such as Google, Bank of America, IBM, and General Motors. Many are implementing skills-based hiring, according to Lucas Mearian from ComputerWorld

While some fields will still mandate academic qualifications, including the medical and legal professions, many more opportunities are now accessible to people without a degree, particularly in tech, according to new research by global HR and payroll services company, Remote. Remote’s study found that skills-based hiring is up 63% in the past year as more employers value experience over academic qualifications. In addition to giving employers a competitive edge by opening up the talent pool, the change is helping to remove career and salary barriers for over two-thirds of adults who do not have a Bachelor’s degree in the United States, the study concluded. Remote’s study is not alone. Forty-five percent of organizations report using a skills framework to provide structure around recruiting and developing their tech workforces; another 36% are exploring the idea, according to CompTIA, a nonprofit association for the IT industry and its workers. 

The move toward skills-based hiring has given momentum to the offering of a vast variety of credentials and certificates. A recent report from the nonprofit Credential Engine documents more than one million (1,076,358) post-secondary credentials being offered in the US. Some credentials are offered by higher education, some by private companies, and others by government organizations. 

There is yet another challenge on the near horizon for higher ed. The demographic cliff is expected to impact the number of high school graduates beginning in 2025. The recession that began in 2007 resulted in a drop in the number of births in the U.S. for a period of years. That drop will be seen in fewer 17-and-18-year-old high school graduates in 2025 and the next few years. With the drop will come more competition for a smaller number of prospective college students. 

All of these factors combine to make the future of higher education look far less bright than it did decades ago. We can expect more campus closures and mergers with the inevitable fallout of jobs and disruption of careers. Those colleges and universities that survive and thrive will be the ones who find new ways to offer affordable and effective programs that serve both students and employers.

Has your university addressed these challenges with a blueprint for new ways to sustain the viability of the institution? How is your career crafted to continue to grow as departments close, efficiency cuts reduce the size of the faculty/staff, and others lose their jobs around you? Will the rapid advance in artificial intelligence enhance or threaten your planned career path? It is a good time to ensure that you are prepared for continued success.


This article was originally published in Inside Higher Ed’s Transforming Teaching & Learning blog. 

Ray Schroeder 2016 Summit for Online Leadership

Ray Schroeder is Professor Emeritus, Associate Vice Chancellor for Online Learning at the University of Illinois Springfield (UIS) and Senior Fellow at UPCEA. Each year, Ray publishes and presents nationally on emerging topics in online and technology-enhanced learning. Ray’s social media publications daily reach more than 12,000 professionals. He is the inaugural recipient of the A. Frank Mayadas Online Leadership Award, recipient of the University of Illinois Distinguished Service Award, the United States Distance Learning Association Hall of Fame Award, and the American Journal of Distance Education/University of Wisconsin Wedemeyer Excellence in Distance Education Award 2016.

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