A dozen years of decline

For 150 years, beginning in the 18th century, college enrollment in the United States has experienced annual growth, with only a handful of short-term declines during wars and other major social events. That record of steady increases was shattered a dozen years ago by the 2007-09 recession and has never recovered. Of course, the pandemic triggered a drop, but projections said that after that drop in 2020 and 2021, enrollment would pick up again in 2022. You were wrong. The numbers continued their decline and showed no year-on-year increase in the last twelve years.

Despite the long decline in general college enrollment, the percentage of students enrolled in online and distance learning has grown sharply. Still, many institutions—particularly small and medium-sized universities—rely on on-campus student enrollment for their financial well-being. Without these students on campus, the costs of operating and maintaining housing, food, and related revenue-intensive offerings are no longer covered, leading to further deficits. The result has been a surge in recent closures and mergers. Often the media focus is on closures – and there have been many, with hundreds more colleges now heavily in debt – but too often we overlook the number of mergers. There have been 95 college mergers in the last four years alone, more than four times the number in the previous 18 years, and more are on the way.

As colleges and universities suffer from enrollment declines, the knee-jerk response has been to increase tuition to make up the revenue shortfall. This, of course, drives up student loans. Now we’re approaching $1.75 trillion in student debt. It’s chilling to see the chart of more than $1 trillion in debt increasing over the past 12 years. At this point, initiatives to create a one-off, partial relief seem doomed to failure. Even if partial forgiveness initiatives were successful, it would not reach the true cause of the problem; Instead, we would let the debt grow at the same rate, or even faster, from that point on. The staggering figure of nearly $2 trillion is stifling economic growth and taking an immeasurable toll on Americans’ careers. Decades of paying the principal and high interest rates on student loans reduces the purchasing power of professionals. This, in turn, puts pressure on employers to pay higher and higher salaries to cover the cost of retaining happy employees.

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Employers are increasingly trying to break the cycle by no longer requiring degrees for many positions. These include corporate giants like Google, Bank of America, IBM and General Motors. According to Lucas Mearian, many employ a competency-based approach computer world:

While some fields still require academic qualifications, including medical and legal professions, many more opportunities are now open to those without a degree, particularly in the technical field, according to a new study by global HR and payroll service provider Remote. Remote’s study found that skills-based hiring has increased by 63% over the past year as more employers prioritize experience over academic qualifications. The change not only gives employers a competitive edge by opening up the talent pool, but also helps remove career and salary barriers for over two-thirds of adults who do not have a bachelor’s degree in the United States, the study found. Remotes study is not alone. Forty-five percent of companies report using a competency framework to provide a structure for recruiting and developing their technical staff. Another 36% are exploring the idea, according to CompTIA, a nonprofit association for the IT industry and its workers.

The shift to a competency-based attitude has boosted the offering of a wide variety of credentials and certificates. A recent report by the nonprofit Credential Engine documents more than one million (1,076,358) post-secondary credentials on offer in the United States. Some certificates are offered by universities, some by private companies and others by government organizations.

There is another challenge on the near horizon for higher education. The demographic cliff is expected to impact high school graduation numbers beginning in 2025. The recession that began in 2007 led to a decline in the number of births in the USA for years. This decline will be seen in 2025 and the years ahead with fewer 17- and 18-year-old high school graduates. With the decline will come greater competition for smaller numbers of incoming college students.

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All of these factors combine to make the future of higher education far less rosy than it was decades ago. We can expect more campus closures and mergers, with the inevitable consequences of job losses and career disruptions. The colleges and universities that survive and thrive will be the ones that find new ways to offer affordable and effective programs that serve both students and employers.

Has your university addressed these challenges with a blueprint for new ways to maintain the viability of the institution? How is your career shaped to continue growing as departments close, efficiency cuts reduce faculty/staff size, and others in your area lose their jobs? Will the rapid advances in artificial intelligence help or jeopardize your planned career path? It’s a good time to make sure you’re set for continued success.