An Expert Discusses the Implications of Declining College Applications and Enrollment
COVID-19 continues to disrupt life as usual for colleges and the students they seek to attract and retain.
According to recent data from the National Student Research Clearing Center, undergraduate enrollment is down 4.4 percent overall for fall 2020, with freshman enrollment showing “steep declines across all sectors, races, ages, and gender.” This decline has been especially impactful at community colleges, where freshman enrollment has dropped 18.9 percent.
Public and Private Colleges Impacted
At public four-year colleges, freshman enrollment is down 10.5 percent, and at private four-year nonprofits it’s down 8.5 percent.
In addition to declines in enrollment at various types of colleges, undergraduate international student enrollment has dropped dramatically (14.9 percent), FAFSA (Free Application for Federal Student Aid) completion rates have fallen, and Common Applications—the application that can be used to apply to over 800 colleges and universities—are down (8 percent) from last year.
Should We Be Concerned?
In a story for Forbes, Angel B. Pérez, CEO of the National Association for College Admission Counseling, said that the decrease in enrollment is a red flag. “We should worry about what this year’s decline is telling us,” he observed. “As a nation, we can’t afford to have an entire generation of young people not pursue post-secondary education. Higher education makes a big financial difference in the lives of individuals, and also benefits society.”
We reached out by email to Susan Fitzgerald, Associate Managing Director at Moody’s, and Manager, Moody’s Global Higher Education and Not-for-Profit Ratings Team, for her thoughts on the impact of these changes to higher ed.
Colleges Are Reducing Expenses
Q: What are the implications of declining college applications and enrollments for Fall 2020-2021 for four-year colleges, and for two-year colleges?
Fitzgerald: Since tuition and auxiliary revenues are the major revenue stream for most colleges and universities, the decline in enrollment and/or move to online enrollment will have significant negative budgetary implications for some. Many colleges are moving rapidly to offset revenue declines with expense reductions, which often means staff reductions or furloughs.
Two-year colleges have had more material enrollment declines but are less dependent on auxiliary revenues, like housing, dining, and athletics. In some cases, they receive revenue from taxes in addition to state support, which can help cushion the blow.
Competing Is the Name of the Game
Q: What are the implications of declining college applications and enrollments for students who are currently applying for 2021-2022?
Fitzgerald: The environment will become even more competitive among colleges, with schools aggressively recruiting both in their core markets and beyond to fill their targeted class. It’s likely that many will increase financial aid, both because of reduced ability to pay and also as a competitive pricing strategy.
Even if colleges are able to fill their class—if they do so while receiving less tuition revenue—it will likely mean continued rationalization of programs. The pandemic has had a disproportionate impact on students from lower-income and first-generation families, so colleges that serve a larger share of those students may have more significant enrollment challenges.
Analyzing Job Prospects for Students Who Don’t Enroll in College
Q: For students who choose to postpone their college education over the next few years, what are the implications for their career prospects and earnings?
Fitzgerald: Higher education is still correlated with lower long-term unemployment and higher lifetime salaries. However, those benefits typically only accrue for students who complete their degrees.
Choosing the Right Kind of Education
Q: Will trade schools benefit from the decline?
Fitzgerald: There are ongoing societal discussions around the value of the traditional four-year degree versus different types of certificates, credentials, and technical education.
The benefit to students, employers, and society, along with return on investment, will ultimately drive enrollment and government support. w
While some trade schools have positive outcomes, others have poor retention and graduation rates.
There’s No New Normal . . . Yet
Q: Are the college application and enrollment declines temporary? If so, when do you expect to see them increase, or return to normal?
Fitzgerald: Regions of the US were already experiencing demographic stagnation and in some cases declines, which means that enrollment was already under pressure for many colleges pre-pandemic.
The ultimate ramifications of the pandemic on student preparedness to go to college, ability to pay for college, and employer needs are still developing. Federal policies will also play a role in determining the future of higher education enrollment.
Until there is a successful roll-out of a vaccine nationwide, a new normal cannot take shape. In the meantime, ask questions, seek answers, and consider the quote by Greek philosopher Heraclitus: “The only constant in life is change.”
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