Two Charts Showing Additional Enrollment Pressures

The stories I am reading increasing point to ‘we have a large structural deficit that is getting worse, and we have to [shut down, merge, cut departments] now’, which match what I’m seeing privately in our consulting and market analysis work. But even for institutions avoiding such cuts and changes this year, there is an attitude of ‘academic leaders must find new sources of revenue and diversify beyond standard degrees’.

Structural enrollment declines for traditional degrees are increasing in importance, despite all of the Spring coverage that enrollments are stabilizing. I’m not questioning the data from the National Student Clearinghouse, but I am questioning the framing of the Spring results.

You can think of this as a simplified version of Maslow’s Hierarchy of Needs as applied to institutions (or systems of institutions). At the base physiological and safety needs, institutions need reliable revenue to continue to survive, largely driven by enrollment - either directly through tuition or indirectly through state funding formulas. Needs at these lower levels must be satisfied before institutions can attend to higher needs, to paraphrase and adapt the model. If a college or university is facing a structural budget deficit driven by declining enrollments, it’s not that nothing else matters, but the primary focus must be on these base issues. At best, the higher needs can occur alongside enrollment and revenue-driven initiatives, as long there is no distraction introduced. Thus generative AI is an important and even transformational higher need, but it is not primary, despite the media hype.

The number of high schoolers taking college classes has been surging for more than two decades. In what is called dual enrollment, students simultaneously earn high school and college credits from a single class. These advanced college-level courses are no longer just for gifted students who have exhausted the high school course catalog. Now they’re a tool to encourage more Americans to enroll in college by giving them an early taste of post-secondary education and a head start with a few credits.

Another reason for the rapid expansion of dual enrollment may be financial. Dual enrollment courses are money losers for many community colleges, according to Fink at the Community College Research Center. That’s because colleges receive a discounted per-pupil allotment for each high schooler who signs up. Each state funds dual enrollment differently, often through a combination of state and school district budgets. Sometimes families need to contribute too, but it tends to be a lot cheaper than a usual college course.

But colleges can turn dual enrollment programs into a modest money maker when they serve more students, according to a February 2023 analysis by the Community College Research Center. Once fixed costs are covered, each additional student means an increase in revenues. For example, adding an additional high school teacher to an existing instructor training program isn’t very costly and could open up dozens more student slots, each generating income that flows to the college.

After reading your July 12th article regarding primacy of enrollment challenges, I'm writing to share an employment trend that I believe will also affect higher ed by connecting the dots of state governors' executive orders and positions to college enrollments. I've been watching the actions of governors in 11 states regarding eliminating a bachelor's degree requirement for jobs in state government, unless needed for licensure. Maryland was the first in early 2022 with others following shortly thereafter. This trend has grown to 22% of our 50 states in one year.