Five Reasons College Enrollments Might Be Dropping

October 30, 2012

While official national data will not be published for a while, state by state college enrollments appear to be down.  Hardest hit are for-profit universities, hurt by stricter federal regulations.  There are five possible reasons for the drop in enrollments, says economist Richard Vedder.

Possible reasons for the drop in enrollments:

  • The population of 18 year olds is in decline.
  • A stronger economy leads to more in the workforce and less in schools.
  • Federal financial assistance is not what it used to be.
  • College tuition fees are too high.
  • Lower rate of return on a college investment.

The population of 18 year olds is not declining enough to be a real factor.  While it is true that a stronger economy leads to more in the workforce and less in schools, the annual job growth has not increased enough to have an effect on enrollment.  Federal financial aid now limits Pell Grant recipients from nine years to six years and the number of recipients is down 100,000. This can have an effect on the number of enrollments.  In addition, college tuition fees are up an average of 3.9 percent for private schools and 5 percent for public schools. 

However, a lower rate of return on a college investment is a prime reason for the drop in college enrollments.  An estimate says that 53 percent of recent college graduates are either unemployed or have low-paying or low-skilled jobs.  On top of that, the number of graduates is growing faster than the number of high paying jobs.  Only two-fifths of adult Americans have associate degrees or higher and even less have the traditional jobs in the technical, professional or managerial fields.  Eventually, close to half adult Americans will have college degrees and many will be working less than degree-worthy jobs.

Source: Richard Vedder, "Five Reasons College Enrollments Might Be Dropping," Bloomberg, October 22, 2012.

 

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