Big Education Bubble Bursting? Mid-Tier College's Enrollment Falls Short

YankeeFan · Jul 26, 2013

Looks like the easy money is coming to an end for some of these schools.

Maybe we'll see some real innovation as schools have to compete for students and dollars.

The long enrollment boom that swelled American colleges — and helped drive up their prices — is over, with grim implications for many schools.

College enrollment fell 2 percent in 2012-13, the first significant decline since the 1990s, but nearly all of that drop hit for-profit and community colleges; now, signs point to 2013-14 being the year when traditional four-year, nonprofit colleges begin a contraction that will last for several years. The college-age population is dropping after more than a decade of sharp growth, and many adults who opted out of a forbidding job market and went back to school during the recession have been drawn back to work by the economic recovery.

Hardest hit are likely to be colleges that do not rank among the wealthiest or most prestigious, and are heavily dependent on tuition revenue, raising questions about their financial health — even their survival.

“There are many institutions that are on the margin, economically, and are very concerned about keeping their doors open if they can’t hit their enrollment numbers,” said David A. Hawkins, the director of public policy and research at the National Association for College Admission Counseling, which has more than 1,000 member colleges.

The most competitive colleges remain unaffected, but gaining admission to middle-tier institutions will most likely get easier.

Colleges fear that their high prices and the concern over rising student debt are turning people away, and on Wednesday, President Obama again challenged them to rein in tuition increases. Colleges have resorted to deeper discounts and accelerated degree programs. In all, the four-year residential college experience as a presumed rite of passage for middle-class students is coming under scrutiny.

The most striking signs of change came from Loyola University New Orleans and St. Mary’s College of Maryland. After the usual May 1 deadline for applicants to choose a college, Loyola and St. Mary’s each found that their admission offers had been accepted by about one-third fewer students than expected. Both institutions were forced to make millions of dollars in budget cuts and a late push for more enrollment.

http://www.nytimes.com/2013/07/26/education/in-a-recovering-economy-a-decline-in-college-enrollment.html?pagewanted=all&_r=0
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LongTimeListener · Jul 26, 2013

I don't know how much of a surprise this is. As the story notes, the birth rate is a huge factor here. The kids entering college now were born sometime around 1995, which was on the early side of a significant declining trend. The birth rate in particular among affluent people -- i.e. "college material" -- has been getting low enough that the experts are concerned we aren't achieving the replacement rate. And not as many kids applying to college would be the manifestation of that.

This chart shows birth rate by year. It crested at 4.2 million births and 16.7 per 1,000 population in 1990, which would track to a damn crowded collegiate field around 2008. By 1995 it was down to 3.9 million and 14.8 per 1,000; by 2002 it was 4 million total and only 13.9 per 1,000. That rate has held steady since then.

So, parents, if your kids were born in the mid-1990s or later, some good news!

http://www.infoplease.com/ipa/A0005067.html

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Big Education Bubble Bursting? Mid-Tier College's Enrollment Falls Short

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