During the COVID-19 pandemic, college enrollment rates declined. When schools began to have in-person classes again, the number of high school graduates who applied to college continued to drop.
According to a 2023 Fortune article, undergraduate college enrollment dropped by 8% from 2019 to 2022. Economists say the decreased college enrollment could impact labor rates as well as high school graduates’ overall perception of the value of holding a college degree.
The decrease in college enrollment has coincided with the rising costs of undergraduate school. In 1980, the annual cost of attending a four-year college was $10,231. By 2019, it rose to $28,775 — a 180% increase. Even just from February 2020 to February 2023, college tuition costs have increased 4.7%.
With decreasing enrollment rates and increasing costs, financial experts have weighed in on what they predict about the future of higher education.
The biggest reason high school graduates choose to go to college is so they can be better prepared for their future careers. According to Modern Campus CEO Peter DeVries, those with a college degree typically make more money than those without one. This is because management and higher-earning career paths often require a college degree. However, DeVries said while 58% of college graduates enroll in necessary degree programs to achieve their career goals, 41% are underemployed following graduation.
This is generally because students take on so much debt to attend their dream schools that they take whatever job they can get to begin paying down their loans, leading to underemployment cycles, DeVries said.
The rising costs of a college degree are the biggest cause of declining enrollment rates. Stephen Henn, adjunct professor of economics at Sacred Heart University, said this is one trend that is driving the declining college enrollment. The second trend is the perceived value of the payoff of a college degree.
High school seniors are savvy enough to do a cost-benefit analysis on going to college and incurring debt versus entering a trade or going directly into the workforce, Henn said. In addition, many companies have removed a college degree from the list of required qualifications and replaced this with internal training programs.
With these trends leading to fewer high school graduates pursuing college, financial experts predict several things will happen within the world of higher education.
