Is the Higher Education Pipeline Shrinking or Just Taking a Nap?

The phenomenon of our shrinking school-aged population is well documented. People have been choosing to have fewer children, and that decline has significant implications for educational institutions worldwide. As birth rates decline and populations age, the effects on enrollment numbers, funding, and institutional sustainability become increasingly pronounced.

The ongoing conversation about student debt and the value of a college credential exacerbates the issue for higher education institutions. At a time when as many as one in three bachelor’s degree recipients in the U.S. do not feel their education was worth the cost, colleges and universities have to work harder and smarter to recruit, enroll, and retain students.

Let’s explore how these two factors impact higher education and the potential strategies institutions can adopt.

How is the perceived value of a college degree changing?

One of the immediate consequences of a shrinking population is a decline in the number of prospective students available to enroll in higher education institutions. With fewer young individuals entering the age cohort traditionally associated with college attendance, institutions face the risk of lower enrollment rates.

The reality is that the higher education pipeline is even smaller than what demographic statistics show. Today’s students see high tuition costs, increased demand for skilled labor, and a decline in degree requirements for open positions. Some well-paying jobs only require trade school or technical education programs, and those certifications take far less than four years to earn. This leaves students questioning if they can make more money more quickly—and avoid student debt—by entering the workplace with a certificate instead of a college degree.

While studies show that workers with bachelor’s degrees have higher lifetime earnings and lower poverty rates than those without, technology has changed the workforce. Innovations in artificial intelligence (AI) and machine learning happen rapidly, and students may wonder if delaying real-life work for four or more years to pursue a degree is the best way to prepare for their futures. Can higher education keep up with such precipitously evolving demands?

What are the financial implications of declining enrollment?

One implication of a shrinking pipeline is more time, staffing, and money dedicated to recruitment efforts. The cost of recruiting undergraduate students increased by 32% for private institutions in just two years. For some tuition-dependent schools, that increase necessitated cuts in academic programs and personnel and created an inability to backfill positions when tenured faculty retired. Colleges and universities may need to shift their revenue strategies to reduce their tuition dependency and diversify their revenue through new fundraising tactics, partnerships, online courses, flexible programs for non-traditional students, and hard skills training.

Declining enrollment leads to not only decreased tuition revenue but also diminished government funding and reduced philanthropic support. Some government funding hinges on full-time enrollment numbers, and fewer full-time students means less subsidy. Donors may see a dwindling student population and feel their money could be used better elsewhere. Reduced funding makes maintaining academic programs, investing in infrastructure, and attracting high-quality faculty members more challenging. This could limit the resources available to enhance the education, research, and extracurricular opportunities that attract students, resulting in fewer revenue streams and subsequent financial challenges.

Colleges and universities that historically relied on their reputations may have to adapt their models to attract and retain different student populations, such as adult learners, online students, or individuals seeking tangible professional development opportunities. They may have to rebrand themselves to appeal to students who value real-world earning potential more than a prestigious degree. They will need to make financial incentives to attend—especially grants and scholarships—more robust and communicate how an education at their school prepares students for the future.

What are the geographical and regional implications?

Shrinking populations can also exacerbate existing geographical and regional disparities in higher education and income potential. Areas experiencing significant population decline may face reduced demand for educational institutions. At least 45 colleges and universities have closed or consolidated since 2019. This can leave certain regions with limited access to higher education, worsening inequalities in educational opportunities and contributing to population decline as talented individuals relocate to areas with more options.

In some communities, higher education institutions are the center of the economy. Colleges and universities offer good-paying jobs, produce new talent for the area, and attract other businesses. “College towns” often generate robust tourism that fuels local restaurant, retail, entertainment, and hospitality industries. As student enrollment declines, economic opportunities in those communities may follow suit.

What can schools do to innovate and adapt?

Higher education institutions must explore innovative approaches and adapt strategies to mitigate enrollment challenges. Here are some ideas to rejuvenate a shrinking pipeline:

Collaborate.

• Partner with major employers in your region to create programs that go beyond technical education and develop high-level talent pipelines between your school and their industries. Students may choose to attend your school if they know their odds of getting a job with that partner are higher than if they graduate from another institution. These programs attract not only younger students but also adult learners who didn’t finish college or want to advance their careers.
• Work with local, state, and federal programs. Partnerships between higher education institutions and governments can be instrumental in addressing the consequences of a shrinking pipeline. Sharing resources, pooling expertise, and creating joint programs can help institutions achieve efficiencies and increase their attractiveness to students. For example, the U.S. provides federal incentives and policy support to encourage workforce development.
• Get engaged with your local or regional affiliate organizations like NACAC or AACRAO to brainstorm on best practices, generate ideas, and gain insights that could empower your institution’s strategy.

Adapt your marketing.

• Re-evaluate your messaging. Does it convey a unique advantage to potential applicants? How is your institution a better choice for their future? What makes you stand out? Focus on differentiation.
• Ensure your marketing, website, and social media appeal to a broad audience and reflect an ever-changing student population.
• Check out HubSpot’s 2023 Marketing Strategy & Trends Report for ideas on how to pivot and focus on what will have the most impact.

Leverage student and alum relationships.

• Involve current students in recruitment outreach, whether digitally or at in-person recruitment events. Peer-to-peer communication resonates more strongly with prospective students and establishes a rapport that increases your institution’s relatability.
• Tout your graduates’ success on your website and in recruitment efforts. What is the rate of post-graduation employment in sought-after fields? What percentage are in advanced positions after five years? What about their average earnings compared to others of similar age in your region?
• Survey your recent alums to discover what life benefits beyond employment they attribute to their college experience and share those widely. Use video storytelling!

Re-examine admissions and tuition practices.

• Are your admissions practices inadvertently excluding talented individuals by focusing too much on test scores, essays, or other elements that tend to favor a small subset of prospective students? The Social Mobility Index may provide insight.
• Calculate tuition with an eye toward affordability and priorities. Are there expenses you can cut without compromising the quality of education you provide? Do you need new dorms if more learners commute from their homes or attend online?
• Streamline your application and re-enrollment processes by connecting your enrollment, student information, and learning management systems on one software platform.

Diversify your pipeline.

• Expand online education, corporate partnerships, and research collaborations.
• Build stronger relationships with local and regional high schools, especially those serving less affluent neighborhoods. Make college more attainable for those students.
• Streamline your transfer process and create more feeder schools by partnering with community colleges throughout your region and meeting with students.

Talk to your donors.

• Work with donors to redesign longstanding agreements to better fit a changing student population and ensure full fund utilization.
• Meet with alums in those sought-after fields and ask them to sponsor students who want to pursue similar careers. Promote those partnerships. You can also use higher education software to make alumni outreach more efficient.
• Invest in scholarship management software that consolidates all available awards in one place to make funding more accessible to students and that offers data-driven insights to help administrators match students with scholarships.

Conclusion

By adopting innovative strategies, fostering collaborations, and diversifying revenue sources, colleges and universities can navigate these challenges and ensure their sustainability. Adapting to demographic and economic changes will be crucial for higher education to continue fulfilling its role as a catalyst for societal progress and individual advancement. It is up to higher education institutions to communicate their value in ways that engage traditional and non-traditional prospective students and appeal to the visions they have for their future selves.

This blog was co-written by Christin Grissom and Kimberley Martin. View more of Kimberley’s work here.