fbpx
Connect with us

Executive Voice

Colleges and the Effect of Falling Enrollment

Published

on

colleges are going out of business

Between 2016 and 2019, 86 colleges have either merged with other schools or shut down completely. In fact, 53 colleges closed permanently during the 2019-2020 school year. From 2019 to 2021, colleges saw a 7.8% drop in enrollments. In 2022, more than 1 million fewer students are enrolled in college compared to before the pandemic. 

 

What is causing the fall in enrollment? The rising cost of education outpaced inflation and family income growth until the pandemic affected tuition increases. The lower return on investment, as 73% of people who have a bachelor’s degree or higher are in a job unrelated to their major, also contributes to the low enrollment rate. 

 

It is predicted that college enrollments will fall by around 15% between 2025 and 2029 due to a smaller candidate pool. Currently, less than 50% of high schoolers want to go to a 4-year college, which is significantly less from 2019 when 71% of high schoolers aimed for college. 

 

The pandemic has affected the declining enrollment as well. More than 50% of college students in the U.S. have said they could no longer pay tuition in 2020. Half of these people had to find a new way to pay due to the financial impact of COVID-19 while about 7% had decided to unenroll in order to work full-time or find other alternative education options. 

 

70% of college students said affordability affected their education plans in 2021, leading to almost 500,000 undergraduates deciding to drop out in 2021 fall semester. Financial strains due to the pandemic impacted plans after high school as well with 36% of students deciding to attend a community college (up from 28% before the pandemic), 15% thinking of going to a public rather than private college, and 27% willing to take a gap year to save for college. 

 

Colleges are essentially competing against each other for business. From 2019 to 2021, while community college enrollment fell 15%, enrollment at highly selective colleges increased by 3.1%. Smaller schools with less than 5,000 students have also typically struggled more than schools with more than 30,000 students. Nonetheless, many universities are operating with a small margin even with rising costs. 

 

Compared to other colleges, Ivy Leagues and other highly selective schools have a competitive advantage due to the most popular degrees being considered more valuable at these schools than at public and community colleges. Highly selective schools also usually have large endowments that allow them to offer beneficial financial aid to new students. 

 

How do endowments work at colleges? They are financial assets obtained through donations and are used to create a permanent pool of investments that don’t come with a lot of risk. Universities usually use endowments to fund activities from general operations to research and fellowships. Although schools that spend around 5% of their endowment each year experience less risk for the future market value of their investments, only 106 universities currently have endowments worth $1 billion. 

 

College is a great investment, so it’s best to know whether your choice is ultimately financially viable. Research is useful for determining the financial health of your chosen college before you begin attending. You can look for tuition discounts, read endowment reports, understand the school’s financial responsibility composite score, or review news reports. 

 

It is also important to be prepared in case your college closes. If this does happen, some colleges may have transfer agreements with surrounding universities to help students get their degrees, but it’s a good idea to get as much information as possible about transferring credits. You can also research possible federal loan discharge choices or contact local legal aid offices for guidance. 

 

Investing in the right college can be beneficial in the long run. 

Brian Wallace is the Founder and President of NowSourcing, an industry leading content marketing agency that makes the world's ideas simple, visual, and influential. Brian has been named a Google Small Business Advisor for 2016-present and joined the SXSW Advisory Board in 2019-present.

Become A Crypto Expert

Categories

Recent Stories

Trending


Copyright © 2022 Disrupt ™ Magazine is a Minority Owned Privately Held Company - Disrupt ™ was founder by Puerto Rican serial entrepreneur and philanthropist Tony Delgado who is on a mission to transform Latin America using the power of education and entrepreneurship.

Disrupt ™ Magazine
151 Calle San Francisco
Suite 200
San Juan, Puerto Rico, 00901

Opinions expressed by Disrupt Contributors are their own. Disrupt Magazine invites voices from many diverse walks of life to share their perspectives on our contributor platform. We are big believers in freedom of speech and while we do enforce our community guidelines, we do not actively censor stories on our platform because we want to give our contributors the freedom to express their opinions. Articles are not commissioned by our editorial team, and opinions expressed by our community contributors do not reflect the opinions of Disrupt or its employees.
We are committed to fighting the spread of misinformation online so if you feel an article on our platform goes against our community guidelines or contains false information, we do encourage you to report it. We need your help to fight the spread of misinformation. For more information please visit our Contributor Guidelines available here.


Disrupt ™ is the voice of latino entrepreneurs around the world. We are part of a movement to increase diversity in the technology industry and we are focused on using entrepreneurship to grow new economies in underserved communities both here in Puerto Rico and throughout Latin America. We enable millennials to become what they want to become in life by learning new skills and leveraging the power of the digital economy. We are living proof that all you need to succeed in this new economy is a landing page and a dream. Disrupt tells the stories of the world top entrepreneurs, developers, creators, and digital marketers and help empower them to teach others the skills they used to grow their careers, chase their passions and create financial freedom for themselves, their families, and their lives, all while living out their true purpose. We recognize the fact that most young people are opting to skip college in exchange for entrepreneurship and real-life experience. Disrupt Magazine was designed to give the world a taste of that.