Higher Ed Enrollment Crisis—Strategic Solutions and Expert Analysis
Release Date: 01/14/2025
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info_outlineHigher Education Enrollment Decline 2024-2040: You Can’t Recruit Your Way Out of a Declining Market
The enrollment cliff is no longer a distant threat—it’s here, and institutions must act decisively to adapt. In this episode of Changing Higher Ed, Dr. Drumm McNaughton hosts Bill Conley and Bob Massa of Enrollment Intelligence Now to explore the demographic shifts, financial realities, and strategic imperatives reshaping higher education.
With over 80 years of combined experience from institutions including Johns Hopkins, Bucknell, Dickinson College, and Columbia University, these enrollment experts provide insights into the demographic and enrollment decline.
The latest Western Interstate Commission on Higher Education (WICHE) report projects significant declines in high school graduates, signaling major challenges for higher education institutions. After peaking at 3.9 million graduates in 2025, numbers will decline to 3.6 million by 2030 and below 3.4 million by 2040—a 13% drop over 15 years. Five states (California, Illinois, Michigan, New York, and Pennsylvania) will account for over 75% of this nationwide decline.
Key Demographic Shifts (2025-2040)
- White student population: 26% decrease (1.6M to 1.2M)
- Hispanic student population: 16% increase (940K to 1.1M)
- Black student population: 22% decrease
- Asian student population: 10% decrease
- Growing gender gap: 2025 projection shows 52% female vs. 42% male degree holders
Market Segmentation Impact
- Elite/Selective Institutions (Minimal impact)
- Institutions with <15% admission rates and strong endowments
- Major public flagships remain stable
- Mid-Tier Institutions (Highest risk)
- Weakening admission rates
- High discount rates (60-70%)
- Particularly vulnerable in Midwest and Northeast
- Open Enrollment/Community Colleges
- Significant enrollment pressure
- Post-COVID challenges
- Overhead cost struggles
Financial Reality Current average net price ($16,500/year) is actually lower than in 2006 ($19,000/year in 2024 dollars), but institutions struggle to effectively communicate this value proposition.
Strategic Solutions
- Target 36 million adults without degrees
- Implement academic realignment and program prioritization
- Develop flexible scheduling and dual enrollment programs
- Consider three-year degree programs
- Focus on career outcomes and practical skill development
- Right-size operations to sustainable levels
- Make strategic cuts in personnel and programs
- Shift messaging beyond traditional "liberal arts" branding
Three Takeaways for University Presidents, Boards, and Enrollment Executives
- Be Realistic: Recruitment alone cannot solve systemic enrollment declines. Institutions must analyze their unique situations and focus on actionable data. Leaders should localize their strategies to fit regional contexts, rather than relying on generalized solutions. "Don't think that you can recruit your way out of a declining market."
- Focus on Strengths: Differentiate your institution by leaning into what it does best. This involves identifying areas where your institution has a competitive advantage and leveraging them to stand out. Trim inefficiencies and focus resources on high-value programs and initiatives.
- Act Decisively and Proactively: Waiting to make necessary adjustments only exacerbates challenges. Institutions must take bold steps to ensure long-term sustainability, including program prioritization, exploring strategic partnerships, and right-sizing budgets and staffing levels. "Shrinking is going to be painful, but it's less painful than closing."
As emphasized by Dr. McNaughton, citing Jack Welch: "If the rate of change outside your institution is greater than the rate of change inside, you're headed for the cliff." The demographic challenges are real and require immediate action, not hope for an unlikely turnaround.
Read the podcast transcript: https://changinghighered.com/higher-ed-enrollment-crisis-strategic-solutions-expert-analysis/
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