Is The Higher Ed Bubble Deflating?

The beginning of the fall?

Bryan Alexander started grappling with the idea of “peak higher education” in 2013—inspired by the notion of “peak car,” “peak oil,” and other so-called “peaks.” At the time, there were signs that the industry was already struggling. The number of students enrolled in higher education had dropped by a little over 450,000 after years of booming growth, the proportion of part-time faculty—more commonly referred to as adjuncts—had steadily become a more significant part of the professorship, and there was a general skepticism about the skyrocketing costs of college and concerns over whether a degree was worth it. Taken individually, he said, each sign was troubling enough. But when looked at together, they represented the outlines of a bleak future for higher education. Alexander, a self-described higher-education futurist and a former English professor, came to the conclusion that after nearly a half century of growth, higher education might be as big as it could get. It would, he reasoned, only get smaller from there.

Now, five years on, he says the “depressing” hypothesis is playing out. In the spring of 2013, there were 19,105,651 students enrolled in higher ed; this spring, there were 17,839,330, according to recently released data from the National Center for Education Statistics. That represents a roughly 7-percent decrease—and is driven largely by declining enrollments in the for-profit and community-college sectors, as well as stagnant enrollments among four-year non-profit public and private institutions. And the trend of declining enrollment in higher education is likely to continue, he argues, for a couple of reasons, but most notably, a declining birth rate means that there will be fewer 18-year-olds entering academe, and there are fewer international and immigrant students to fill those seats.

A lot of universities have bet a lot of money on ever-increasing enrollment. I don’t know what happens if things really do go in this direction. Non-elite private schools would be the hardest hit, I would imagine and it’s not out of the question to see a lot of them collapse. I’m not sure about state universities.

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13 thoughts on “Is The Higher Ed Bubble Deflating?

  1. The University of Denver recently announced (PDF) their plan to do major restructuring of the campus and surrounding area. Of course, they’re probably the most elite private school within 250 miles, at the center of an area where the population is still growing at a relatively insane pace.

    How much of the “fall” in higher ed is regional in nature?

    (Full disclosure: I have an MA in Public Policy from DU, both my kids went to four-year public schools in Colorado, and my wife took some IT classes at one of the local community colleges as a refresher when she started looking for outside work again.)

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    • My guess is maybe a little bit regional but more city vs not. I bet urban schools are in a much better place than state directionals and countryside liberal arts schools.

      Some of it is university specific, of course. The University of Montana is losing student population while Montana State is growing fast.

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    • “Of course, they’re probably the most elite private school within 250 miles”

      I’d concede 100 miles. Or “that isn’t committed to keeping enrollment startlingly low within 250 miles”.

      But our admit rate has gone from 23 percent in 2012 to something under 13 percent last year, and we (embarrassingly enough) have more students in the top 1 percent of income-earners than the bottom 20…

      So I don’t think it’s just the rivalry that makes me think your 250 number is dubious.

      Bigger picture, of course, our falling admit rate makes me agree with your premise *more*, not doubt it.

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      • Absolutely right, my bad, sorry. I forget about you because I almost always forget small liberal arts schools. (I probably need to extend the apology to as well.) In hindsight, “elite” was the wrong word anyway. What’s the generic term for “well-known in the region, falls into the U.S.News ‘National University’ category, ranks well regionally in that category, and comes with the cachet of private rather than public”? Combine that with ridiculous population growth and you get a school that keeps building new buildings and adding programs.

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  2. I wouldn’t worry too much about the state schools. You might see some satellite campuses shutter or consolidate with the community colleges, but overall they will be fine. I would be more worried about poor administrative decisions, like prioritizing student amenities over attracting and retaining quality faculty.

    Now the low end for-profits and the SLACs and the HBCUs, those could be in trouble.

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    • I teach at a regional state school. I’m sure our “flagship” schools are safe, but I worry about us. (I have 10 years until retirement. Before 2016, my plan was “teach until I’m 70, as long as my health holds out” (which would be in 21 years) but now, I’m just praying things can eke along until 2029.

      The thing is – we provide what I think is a valuable service; a lot of my department’s graduates wind up in jobs in their field or in professional school, and making better money than they would otherwise. But with reduced state appropriations and increased things-we-must-do, the budget’s stretched awfully thin. (some “administrative bloat” is because of Federal mandates about things like tracking financial aid and ADA/Title IX/Title VII compliance more closely)

      There’s also a push to go heavily to online teaching, which is okay for some things, but which I consider to be bad for two groups in particular:

      a. Students wanting a lab/field science background (“virtual” labs are a pee-poor substitute for actually going in and getting your hands dirty, and having to deal with stuff that goes wrong, like in real labs)

      b. Students with weak backgrounds from high school or who don’t have highly-developed study skills or time-management skills (which is a large number of our students). Friends here who teach a lot online say they are constantly barraged by people who missed a deadline and want the exam or assignment or whatever opened back up for them, or people who fail because they keep putting off doing anything until the last week of classes.

      It’s like some in the administration looked at U of Phoenix and went “We gotta be just like that” instead of thinking about “what are our real strengths” (small class sizes and personal attention from faculty) and “what are the challenges our students face?” (a lot are first generation students, many are from rural high schools that aren’t the greatest….)

      So I don’t know. I really don’t want to retool (at nearly 50) for another career, and I don’t want to move (I own my house outright – bought a fixer-upper and fixed it up). But depending on what happens in the next couple budget cycles….maybe I have to.

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      • It’s like some in the administration looked at U of Phoenix and went “We gotta be just like that” instead of thinking about “what are our real strengths” (small class sizes and personal attention from faculty) and “what are the challenges our students face?” (a lot are first generation students, many are from rural high schools that aren’t the greatest….)

        This is what I mean by ‘poor administrative decisions’.

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      • The Benedictine University in town closed a couple of years ago; I think many of the issues were particular to Catholic education, but its my understanding that consultants were advising small schools like it (1,000 students) to aggressively grow, or face slow, but steady declines. On-line programs were recommended as a less expensive tool of expansion. If a fish isn’t moving, it’s dying. I recall a letter to the editor complaining that demographic projections don’t support that view, and urging the school to concentrate on its strengths, not absolute numbers.

        In any event, a vote to close was taken. We found out about the vote before it was public because husband-and-wife neighbors both taught there and asked us not to let our kids know or at least tell them not to mention it to their kids, who they didn’t want to worry. The both found jobs the next year, one at the community college and the other at the public university.

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  3. The university where I work has told those of us who work there that their plan is to keep bringing in more students from China and India, who are already a sizeable chunk of the student body.

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    • Yeah, we’ve got something similar planned, with the added idea of shipping some profs over to China for a summer to teach THERE.

      the money is good, but I think that’s one of the things I will say “I am sorry but I am too old for that” if it develops. (I have enough weird minor health issues that the idea of being in a country where I didn’t speak the language fluently scares me; the thought of landing up in an ER in rural China – where the school we’d be going to is – and not being able to explain my various allergies makes me unsettled.)

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  4. Perhaps this is just a blip driven by declines in the for-profit sector that will correct itself, or the consequence of a growing economy in which more people choose jobs over school.

    Not perhaps. This is exactly what’s going on.

    The only institutions that are actually experiencing an existential crisis are the SLACs (which the HBCUs that are also struggling are a subset). The SLACs have no, um slack, in their enrollment numbers – and more importantly, the enrollment that’s paying full fare.

    If the employment picture gets worse, more people will hide out in college. And if ou immigration system ever gets unfished, more international students will bump the numbers further.

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