Fewer People Are Going to College (And That's Not So Good)

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Concerns about college affordability and student debt as well as a strong labor market for unskilled workers are apparently keeping some prospective students away from getting a college degree as they question whether it is worth it.

College enrollment has declined?for the third school year in a row, and with each passing school year of declining enrollment, "a path back to pre-pandemic enrollment levels is growing further out of reach," says Doug Shapiro, executive director of the National Student Clearinghouse.

"After two straight years of historically large losses, it is particularly troubling that numbers are still falling, especially among freshmen,” Shapiro said in a press release.

Increasingly, high school students are rethinking the value of college, with a growing number of them questioning the return on investment. Some have decided against a four-year degree.

Enrollment in undergraduate and graduate programs has been trending downward since around 2012. The pandemic turbocharged the declines at the undergrad level. Now, the decline has resumed at a steadier pace.

Graduate program enrollment, which saw an increase in the fall of 2020 but a decline in 2021, continued to decline this fall, though numbers are still above pre-pandemic levels.

Total undergraduate and graduate enrollment combined declined 1.1 percent between the fall of 2021 and 2022, leading to a total two-year decline of 3.2 percent since 2020, per the nonprofit.

Freshmen enrollment declined by 1.5 percent overall, with numbers dropping in all four-year sectors. Highly selective institutions saw the largest drop in freshmen enrollment, with a 5.6 percent decline compared to a 10.7 percent gain in fall 2021.

Historically Black Colleges and Universities and primary online institutions were among the few schools to see enrollment increases. Their enrollment grew 2.5 percent this fall and at primarily online institutions, undergraduate enrollment grew by 3.2 percent from last fall, per the report.

Community colleges posted a 0.4 percent enrollment loss compared to fall 2021. That's good news as those institutions dropped by 9.5 percent during the spring of 2021, with a loss of 476,000 students.

While a lot of recruiting focuses on high school students, many colleges might do well to look at another pool of potential students: adults returning to college. New research shows there are about 36 million Americans who have some college and no degree. These students offer a huge opportunity for colleges, and in some communities, they are far more prevalent than seniors in high school.

?Low Unemployment and Soaring Costs Do Not Help

A strong economy and soaring college costs have made it even more difficult for colleges to persuade students to enroll. When unemployment is down — it's currently at 3.5 percent — more people leave college, or postpone it, and head to work.

During the recession of 2007 to 2009, many people, especially older adults, returned to college. That bump in college enrollment set records. The last time U.S. college enrollment went up was in 2011.

Also, the number of high school graduates is flat — and in some cases declining — because of lower birth rates about 20 years ago. Those numbers are also projected to decline, so the trend of fewer students coming from high school isn't going away anytime soon.

Finally, many states are putting less money into higher education, which has led to an increased reliance on tuition. As tuition goes up, and grants and scholarships don't keep pace, that's pushed the cost of college down to students and their families.

The higher cost of borrowing for college comes as tuition has increased by an average of 3 percent to 5 percent this fall, according to research by Fitch Ratings, a credit rating company, and as inflation has increased the cost of essential items such as food and housing.

Increased costs mean many students have to borrow more money at higher rates, further exacerbating the student debt problem the Biden administration set out to address.

President Joe Biden announced last month that he would forgive $10,000 in federal student loans for individuals who made less than $125,000 a year in 2020 or 2021, or $250,000 for couples who file taxes jointly.

But Mr. Biden made it clear that the debt cancellation was a one-time event and his plan did not address the underlying issue around the rising cost of college.

At public four-year institutions, average annual tuition and fees were $9,400 in 2020–21, ?about 10 percent higher than they were in 2010–11 ($8,500), according to the National Center for Education Statistics.

Questioning the Value of a College Degree

Between sky-high costs and hefty student loan debt, more students and their families are questioning the value of a college degree.

While about 81 percent of college-bound juniors and seniors still see college as a worthwhile investment, only 42 percent of families feel confident about covering the cost, according to a report by Sallie Mae.

As a result, a growing number are opting out entirely. The number of undergraduates enrolled in college is now down 5.1 percent compared to two years ago, according to a?separate report by the National Student Clearinghouse Research Center — a loss of nearly 1 million students.

In fact, getting a diploma is almost always worth it in the long run, according to “The College Payoff,” a report from the Georgetown University Center on Education and the Workforce.

But it’s not a guarantee. Although workers with more education generally earn more, a good number of those without a college diploma are making more than college graduates.

Roughly 16 percent of high school grads earn more than half of workers with a bachelor’s degree, according to a 2021 report?by the Georgetown University Center on Education and the Workforce.

Likewise, 28 percent of workers with an associate’s degree earn more than half of workers with a bachelor’s degree, and 36 percent of workers with a bachelor’s degree earn more than half of workers with a master’s degree.

Employers Need Skilled People

But whether it's a profession that requires a four-year degree, other jobs that require an associate degree, or skills or trades that need certificates or credentials, employers need skilled workers. If fewer people are getting those credentials, those jobs often sit empty.

My personal take: Students attending a four-year university typically will graduate and then will leave in search of their first jobs, often in larger metropolitan areas. But community college students tend to be more vested in a community. They are usually rooted there for the long term.

For that reason, I place a higher premium on those community colleges that see their principal role as "skilling up" people by offering associate degrees in technical and high-demand fields. Sadly, enrollment at community colleges is down about 100,000 students from the fall of 2018.

There is a Payoff to a College Degree

Many people believe as long as they have a job, they don't need to go to college, but the earnings potential remains substantially higher for those people who do have college degrees.

Bachelor’s degree holders generally earn 84 percent more than those with just a high school diploma, according to a recent Sallie Mae report — and the higher the level of educational attainment, the larger the payoff.

Getting a Bachelor's degree adds another large increase in lifetime earnings. With median earnings of $56,700 ($27.26 per hour), or $2.3 million over a lifetime, Bachelor's degree holders earn 31 percent more than workers with an Associate's degree and 74 percent more than those with just a high school diploma, according to a Georgetown University study.

In addition to increased earnings over time, research shows that having a college degree means you are less likely to be unemployed and more likely to weather uncertain economic conditions, such as a recession.

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