Brian Wallace, Founder & President, NowSourcing
Attending college has been ingrained into American society. In order to be successful, college is a must. It is the clear next step after high school. But now this seemingly plain next step is beginning to waver. There has been a trend in colleges and school campuses closing, and in some cases, permanently shutting down. From 2016 to 2019, 86 colleges shut down or merged with other schools, and even more, 53 colleges closed permanently during the 2019-2020 school year.
In 2022, more than 1 million fewer students are enrolled in college than before the start of the pandemic. It is clear the pandemic accelerated the decline in enrollment. In 2020, 56% of US college students said they could no longer afford their tuition, as they needed to figure out a new way to pay because of the impact of COVID-19. While the pandemic has undoubtedly contributed to fewer enrollments, there are other non-COVID related factors that have steadily become larger issues prior to 2020.
To begin, the rise of college costs has continuously increased and outpaced both inflation and family income growth, up until the pandemic halted tuition increase. There is also greater interest in attending community colleges which offer more affordable options. 36% of students said they would attend a community college over a 4 year college, which is 8% higher than before the pandemic. Also, students are seeing a lower return on investment. 99.5 million Americans have a bachelor’s degree or higher yet 73% hold a position unrelated to their major. Furthermore, there is just an overall lack of interest in attending college. Only 48% of high schoolers show a desire to go to a 4 year college, a decline from 71% in 2019.
The financial strains are not only on the shoulders of students but on the colleges themselves. 74% of higher education professionals say their institution is facing significant financial constraints. The struggle is even greater for smaller schools. Colleges and universities are forced to compete for students in order to maintain their tuition revenue, making them operate at a small margin. Ivy leagues and other highly selective schools have a competitive advantage since they have access to larger endowment funds which can attract students with generous financial aid.
It behooves the young people of America to be aware of the financial health of colleges before enrolling. When applying to colleges, students should be aware of a variety of determinants including endowment reports, tuition discounts, financial responsibility composite score, and other reports documenting frequent changes in leadership, declining enrollment as well as accreditation issues. If a college does shut down, keeping records of course syllabi, transcripts and important conversations with school officials is imperative. Also, some colleges have transfer agreements with nearby universities and students can obtain the details of how these credits will transfer but should be wary of high pressure tactics to accept these agreements.
In a nation that holds attending college to one of the highest standards, there is no doubt the landscape of American universities and colleges will change. With an increasing amount of uninterested students and trying times for colleges to maintain enrollment, getting a higher education does not necessarily fit the bill anymore.
About the Author: Brian Wallace is the Founder and President of NowSourcing, an industry leading infographic design agency in Louisville, KY and Cincinnati, OH which works with companies ranging from startups to Fortune 500s. Brian runs #LinkedInLocal events, hosts the Next Action Podcast, and has been named a Google Small Business Adviser for 2016-present. Follow Brian Wallace on Linked