Over the break, Jeff Selingo tweeted out a wish for the new year that higher ed as an industry would come to terms with the demographic changes that are already underway, and likely to accelerate after 2026. The changes -- far fewer 18 year olds, especially in the parts of the country where colleges are concentrated -- are likely to create downward pressure on enrollments, particularly for colleges that don’t draw nationally. 2026 is the cliff year because birthrates dropped drastically in 2008, and 2008 + 18 = 2026.
At one level, obviously, he’s right. We’re already seeing enrollment declines in the Northeast and Midwest. They aren’t evenly distributed among sectors, either. The elite and selective places continue to fill their classes; if needed, they can simply lower the bar a bit to fill those last few seats. (That makes a pure “flight to quality” argument hard to sustain.) Tiny, locally-known, private colleges are struggling, as are community colleges, though for different reasons. With the former, the struggle is largely driven by the cost of production. They lack the economies of scale that larger places have, but they have to compete with those larger places. Many of them have done it with escalating discount rates, but there’s a natural limit to that.
With community colleges, the struggle is a bit more complicated. It has its roots in a shift in philosophy from college as a public good to college as a consumer good. If it’s the latter, then colleges should subsist mostly on tuition, the argument goes. But, at the same time that community colleges’ operating aid has been flat or reduced, they’re also excoriated for raising tuition enough to compensate. That creates a nasty squeeze. Add enrollment decline, and a challenging situation gets worse. The enrollment decline is exacerbated by the aforementioned lowering of standards at many four-year schools; when they fish in our pond, they shift the entire weight of the demographic shift to us.
All of which means that, yes, there’s a real issue to address. But “coming to terms” can mean a lot of things, which is where my next reaction comes from.
There’s always the temptation to try to cut your way out of a squeeze. That’s what some people mean by “coming to terms.” They imagine wasteful spending finally being brought to heel, with taxpayers and students reaping the benefit. But the community college sector is by far the most parsimonious part of higher education. If we wanted to reduce spending on higher ed, we wouldn’t visit austerity on community colleges. If anything, we’d support them as the low-cost option.
On campus, “coming to terms” can get peoples’ hackles up. To the extent that it means austerity, naturally, they’re opposed. To the extent that it means trying new things, there’s both cost and risk involved. They don’t want to bear the cost -- austerity having already taken its toll -- and they fear being punished even harder if it fails. The counterargument is that the risk of success beats the guarantee of failure, which is true, but it requires getting past denial, which is a tall order.
I’m thinking that the party that needs to “come to terms” isn’t only higher ed itself. It’s the polity more broadly, and the state more specifically. If we have fewer 18 year olds ten years from now than we do now -- a near-certainty -- does that mean we can cheap out on education? Or does it mean that it will be even more important to educate those fewer students well? If it’s the latter, then the trend that needs to be reversed is the shift of cost from the polity to the student. It was never a great idea, but its true destructiveness was masked for a while by increasing enrollments. Growth forgives many sins. Now that enrollment is declining, the basic flaw in the idea is laid bare.
Yes, we need to come to terms with demographic change. Step one will be pushing back, hard, on the narrative that says that austerity is the answer.
