How Did We Arrive Here? Exploring Negative Perceptions of College Degrees

Between 1971 and 2021, the cost of attending a private, non-profit four-year institution increased from $2,930 per year to $51,690, which was nearly five times greater than the rate of inflation during the same period (College Board, 2022). Additionally, federally guaranteed student loan debt exceeded $1.63 trillion as of March 2023 (NSLDS, 2023), making it the second-largest share of consumer debt behind mortgage debt (Center for Microeconomic Data, 2021). At the same time, median annual pay for bachelor’s degree holders declined by over 7% in 2022 while increasing by 6% for those with just a high school diploma (Federal Reserve Bank of New York, 2023). All these factors have caused public perceptions to begin to sour on the value of higher education, with 56% of all Americans believing that college is no longer worth the cost (Wall Street Journal, 2023).

Researchers have also found that higher education does not necessarily enable economic mobility (Marcotte & Bradley, 2020). Educational attainment has not necessarily translated into gains of wealth for persons of color, and the differences in the wealth gap are stark (Federal Reserve Bank of St. Louis, 2017). Even though White median family wealth increased by 29% percent and Black family wealth by 156%, there is still a $161,000 gap. Further, 82% of Black families had less median wealth than the average White family (Federal Reserve Board, 2020). While somewhat less, significant gaps also exist between White and Hispanic families in terms of median wealth. According to Michael Sandel’s Tyranny of Merit (2020), less than two percent of students from the bottom 20 percent of the income scale move up to the top 20 percent of the income quintile.

The post-COVID-19 pandemic labor market increased the negative perceptions of the value of a degree as higher wages have tempted many to forego or postpone pursuing higher education (Barroso & Scheopoulos, 2021). Many students have had to choose between going to college for four years or the prospect of earning immediate financial returns in what has been a strong job market (Barroso & Scheopoulos, 2021). Employers have had to compete for workers with low-skilled jobs, with only 0.88 workers available for every job opening (U.S. Chamber of Commerce, 2020). Dubay (2020) states: A six-figure salary at a fast-food restaurant sounds too good to be true. But in today’s tight labor market, it is a reality. Taco Bell will soon pay some restaurant managers $100,000 a year. This is great news for workers, especially those with fewer skills. In fact, wages for the lowest-paid workers are now growing faster than for higher-paid workers.

Finally, changes in the way employers view the value of a college degree are likely also driving public sentiment. IBM and other major employers, including Google, Tesla, Delta Airlines, and Apple, have announced that they no longer necessarily require applicants to have a college degree - in many cases for high-paying jobs (Axios, 2018; Wall Street Journal, 2022). By way of example, IBM has taken a “skills-over-degrees” to address a global shortage of skilled tech workers and has hired individuals from a wide range of other positions having a little technical background, including nurses, dog trainers, cooks, and firefighters (Gallup, 2021).

Impact of Declining Enrollment on Institutions Between 2009 and 2019, enrollment increased by 10 percent at four-year institutions (from 9.9 million to 11.0 million students) and decreased by 26 percent at 2-year institutions (from 7.5 million to 5.6 million students) (NCES, 2021). In recent years, there has been a gradual decline in enrollment at four-year private non-profit schools, with 3,811,176 students in 2015 and 3,776,285 students in 2021 (NSC, 2021). In total, the number of undergraduate students has decreased by 13% from 16,607,735 students in 2014 to 14,441,432 students in 2021, a decrease of 2,155,303 students (NSC, 2021). Fewer students advanced to college despite the total number of high school graduates increasing between 2015 and 2020 (BLS, 2021). According to Pew Research, at community colleges, the share of dependent students who are in poverty has doubled from 13% in 1996 to 27% in 2016 (Fry & Cilluffo, 2019). According to the 2021 Pew Research, lower-income students who enrolled in community college in the fall of 2014 were only half as likely to transfer to a four-year institution as their higher-income counterparts (24% vs. 40%), and only 10% of them earned a bachelor's degree within six years of initial entry, compared to 21% of higher-income students (NCES, 2021).

Not all institutions have seen a decline in applications or enrollments. Some flagship public and private institutions have enjoyed an increase in their number of applicants and enrollments. In 2020, the University of California, Los Angeles, reported receiving the highest number of applications in its history, surpassing all other institutions with more than 108,000 applicants (Moody’s, 2021). There has also been an increase in graduate enrollment in recent years, increasing by 10% between the fall of 2019 and 2020. On the other hand, less selective institutions have experienced decreases in enrollment overall, with a 5% decline in enrollment in a single year.

Summary

Since the Great Recession, there has also been an increase in the number of private, non-profit institutions that have closed. Additionally, the COVID-19 pandemic has further exasperated the issues facing these institutions. As a result, many colleges and universities had to close their residence and dining halls, losing significant auxiliary revenue, and it was unclear when they would resume operations. Although schools have reopened, community colleges, which traditionally placed students in four-year institutions, have seen enrollment fall by more than 26%, many attributing this to an exceptionally robust labor market with high wages for low-skill workers. Others attributed the post-COVID “jitters” to the negative perception of education, which had led many risk-averse families to wonder whether accumulating student loan debt was justified. COVID-19 also led to a significant drop in international students due to travel restrictions (Peele, 2021). Further, in recent years, the rise of micro-credentials has created a new competitive sector for traditional institutions. These factors ultimately influence the "bottom line" of schools, resulting in financial distress and anxiety that have been mounting since the Great Recession.

Abstract

Abstract The purpose of the study was to explore Rural-Serving Institutions (RSI) presidents' perceptions regarding the threats and potential solutions that can keep their institutions viable over the next decade. The study focused on presidents representing small, private, not-for-profit, four-year post-secondary institutions that had an enrollment of fewer than 2,000 students, endowments with values of less than $250 million as of 2020 and were classified as "rural-serving" as defined by the Alliance for Research on Regional Colleges (ARRC, 2022). A written online survey was sent to the presidents of all 170 institutions, of which 70 presidents responded and 35 also participated in follow-up one-on-one interviews of approximately one hour. The research questions guiding the study were focused on identifying the greatest external threats to RSIs, the most significant internal challenges facing these institutions, and the most effective strategies for addressing these challenges. To address the limitations of prior research in this area, the study relied on surveys, interviews, and publicly available data to identify and rank the most significant threats to RSIs as perceived by their leaders. The study employed Bolman and Deal’s (2017) four leadership frames as a theoretical framework to understand how RSI presidents perceive internal and external challenges to their institutions' viability and to identify strategies for addressing these challenges. The research provides practical recommendations that can help these historic institutions remain viable in the face of the challenges they face. The importance of RSIs in rural communities and the impact of RSI closures on local economies and employment are highlighted in the study. This is one of the larger research studies on rural institutions from the perspective of their presidents, and it contributes to the body of knowledge on RSIs by providing actionable insights that can inform decision-making in these institutions.