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MANAGEMENT UPDATE.

HIGHER EDUCATION "ENROLLMENT CLIFF"

For at least a decade the so-called “enrollment cliff,” has been causing heartache throughout higher education around the country.  While the “cliff” doesn’t affect every state and institution evenly, the impact of a dramatic drop in the number of 18- to 24-year-olds following the Great Recession is a challenge to the stability of colleges and universities in every state. This portion of the population is continuing to shrink.  Between 2025 and 2029, the number of 18- to 24-year-olds is expected to drop by 15%, with enrollment declines expected to continue. 



Another reason for the decline in new students for colleges and universities is that high student debt loads appear to diminish general faith in the value of higher education. For example, a Wall Street Journal-NORC poll from March 2023 found 42% of those surveyed still believe in the value of a four-year-degree, but 56% of respondents did not.


Since states and local governments depend on higher ed to support economic development, workforce readiness and local economies, the way this decline is managed is of critical importance.  


A March report from the New York Comptroller’s Office “Higher Education in New York,”  details the challenges of this hazard to higher ed and – perhaps more importantly – some ways to adjust. The significance for New York can’t be overstated. As the report points out, just in 2022, New York higher ed directly and indirectly supported 295,985 jobs and $25.3 billion in wages.  


The decline in the numbers of new students has many ramifications as outlined in the report.  For example: 


  • The enrollment cliff sets up significant competition between states to support higher ed, particularly within their own public institutions. 

  • Mounting costs can result in curriculum cuts and even the potential shutting of campuses, which may result in further enrollment declines.

  • Weakening revenues set up a battle for funding between higher education and other state needs, such as potentially rising state Medicaid costs. The New York report notes that the State University of New York (SUNY) system “would face $1.1 billion in annual budget gaps at the end of the State’s current financial plan.”. 


The New York report cites ways that it, and potentially other states, can address the situation through management initiatives. This includes a concerted effort to improve state transparency on costs and the different kinds of fiscal assistance and grants available to students for tuition and non-tuition expenses. It also means making the application process easier with more automatic high school acceptances, fee waivers, financial aid expansion and more seamless ways to transfer credits.


In addition, a major push is needed to develop industry partnerships and workforce development programs that combine higher ed and paid work, including an expanded focus on registered apprenticeships, which are increasingly available in a broader array of fields.


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