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Has College Lost Its Luster?

a woman demonstrating the declining value of college degrees

In the past, the traditional route to securing a well-paying job required a trip to college. But in recent years, there has been a major shift in this mode of thinking. Fewer and fewer high school graduates are choosing to attend college with many entering right into the workforce. The perceived declining value of college degrees is leading to falling college enrollment. Of course, there is not a single reason for this shift but in fact several. And the culmination of these effects could spell the demise for many of the nation’s colleges.

debt causing the declining value of college degrees
The prospect of debt plays a big role in the declining value of college degrees.

(Want a big salary after you graduate college? Bold has a list of the worst majors for that here.)

It’s no secret that the cost of a college education has increased substantially in recent years. Strapped with massive amounts of student debt, many high school grads simply choose a different strategy. Some take advantage of the hot job market that currently exists while others take apprenticeships. But these are just a few developments that account for falling college enrollment. Not only do many students see a declining value of college degrees, but there are also fewer in the potential student pool. This spells trouble in the near-term for colleges that could be a much more lasting change long-term.

College Enrollment by the Numbers

Most statistics that examine college attendance poll numbers from students between the ages of 16 and 24 years. In this regard, roughly two-thirds of this age group decided to go to a university of college in 2019. But this figure declined to only 62% by 2022. Looking back over a longer period of time, college enrollment peaked in 2009 when 70.1% of high school grads advanced to a university. Since then, there has been a noted falling college enrollment that has coincided with a declining value of college degrees. Statistics now show that there has been a cumulative 15% decline in enrollment over the last decade.

If high school grads aren’t attending college, then what are they doing? On the one hand, many are choosing to work right out of high school. With an unemployment rate of only 9.2 percent for 16-19-year olds, it’s been easy to get employment. This is especially true in restaurant and hospitality sectors. But in addition, many are choosing apprenticeships in industries like construction, the trades, banking and insurance. While the see declining value in college degrees, they see potential in internships and apprenticeships. This has also contributed to the falling college enrollment rates.

“The pandemic disrupted college to such a degree that many people delayed going. Once they delay, they get hooked on earning and working and don’t come back” to college.” – Julia Pollak, ZipRecruiter Chief Economist

a bunch of graduates polluting the sky
Twenty years ago, this picture would have a lot more graduates throwing their caps in the air…

Contributing Pandemic Effects

Like many sectors, the college education system has been significantly impacted by the recent COVID pandemic. With lockdowns and quarantines, students were forced to switch to online educational platforms. In the process, many found this to be preferable as online coursework offered many conveniences. In addition, online courses were less costly, which was also appealing given the high costs of universities today. But this wasn’t the only pandemic effect that caused falling college enrollment. Immigration policies created during the pandemic also reduced the pool of available students for universities. Naturally this meant that colleges had fewer students to fill vacancies. Thus, the pandemic negatively affected the demand-side for colleges and universities in the process.

(Since the pandemic, there’s been a greater online presence for college classes–read more in this Bold story.)

These pandemic-related developments were certainly the most notable ones affecting universities. But other trends during the pandemic also resulted in the perception of a declining value of college degrees. Specifically, labor markets changed greatly with many companies trying to retain talent. This created a very favorable situation for high school grads with well-paying jobs accessible without a college degree. Waitstaff enjoyed wage earnings of $14 an hour while machinists and carpenters could earn up to $25 an hour. With such jobs available, taking on student debt and attending college seemed much less attractive. Falling college enrollment can also be attributed to these job-related shifts.

Contributing Demographic Effects

student aid and falling college enrollment
Student aid doesn’t seem to be stopping the falling college enrollment.

Falling college enrollment rates have been on the decline for a while. The triggering event that seems to have had the biggest impact was that of the Great Recession. Hit with high unemployment threats and economic uncertainty, couples decided to not have children. And even after economic recovery, birth rates continue to stay low thereafter. Often referred to as the “enrollment cliff,” fewer births are now resulting in fewer college applicants. This combined with declining value of college degrees is having a double impact in enrollment. In fact, many smaller colleges are already closing their doors due to these demographic effects.

A decreasing birth rate is not the only demographic shift affecting college enrollment. On the other end of the spectrum, the workforce is aging, especially in some fields. Nursing is experiencing a high rate of retirement of its aging workforce with fewer entering the field. Likewise, the same is true for many blue-collar jobs. This has resulted in job opportunities in these fields that pay well and often do not require a college education. If on-the-job training and apprenticeships are available, this is a more attractive option for some students. Being able to learn while earning and avoiding debt is a triple win. Not surprisingly, this is contributing to the perceived declining value of college degrees.

“The near future of higher education is one of decline, and its consequences will reshape the American landscape.” – Kevin Carey, Vice President at New America, a think tank in Washington, DC.

What This Means for Colleges

Unfortunately, each of these factors combined spell trouble for the college landscape moving forward. With fewer students available, there will continue to be falling college enrollment rates. With the high cost of education, students will continue to see a declining value of college degrees. This is especially true when ample jobs are available and when alternative routes of learning exist. The exception may be white collar jobs, which will still require university education. Jobs in engineering, computer science, IT and advanced medicine will also continue to demand higher-level learning. In all likelihood, these programs will be offered by a shrinking number of institutions in larger cities. Those in smaller towns and rural regions will suffer as enrollment further declines. Indeed, college has lost its luster. And a major readjustment in the number and types of universities looks to be inevitable in the years to come.

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