Higher education in the United States has only known growth for generations. But enrollment of traditional students has been falling for more than a decade, especially among men, putting pressure both on the enrollment pipeline and on the work ecosystem it feeds.1 Now the sector faces increased headwinds as other countries catch up with the aggregate number of college-educated adults, with China and India expected to surpass the United States as the front runners in educated populations within the next decade or so.2
The demographic cliff of traditional college students that is projected to arrive in the middle of this decade is a well-known fact among higher education leaders. But that 2025 mark, when the number of high-school graduates in the United States will reach its highest point until well into the 2030s, is far from the only macro-enrollment trend buffeting the sector these days.3
Undergraduate enrollment in the United States topped out in 2010–11 at 18.1 million.4 It then began a steady slide, with a sharp drop in the first full academic year of the pandemic (figure 1). As of fall 2022, undergraduate enrollment was just under 15.1 million.5 Since 2020, some 1.23 million undergraduate students have disappeared from American colleges and universities, a 4% decline.6 This continued contraction in enrollment illustrates that the direct high school-to-college market—which had filled seats on campuses for generations and steadily grew over those decades with new subsets of students—might have finally reached its peak.
Since 2020, some 1.23 million undergraduate students have disappeared from American colleges and universities, a 4% decline.
Around six in 10 high-school graduates in the United States immediately go on to pursue some sort of postsecondary education.7 Moving the needle on that college-going rate remains challenging given the students left out are notoriously difficult to reach and serve. Today, 16.7 million young adults—around 45% of Americans aged 16 to 24—are not enrolled in any kind of schooling.8
The biggest group skipping out on college? Men. Women surpassed men in terms of mean years of schooling in the 1980s, and now female students account for 56% of undergraduates enrolled at US institutions.9 This steep decline in male participation in higher education has had ripple effects across the economy. The employment of working-aged men has reached Depression-era levels (figure 2).10
The levers that colleges and universities previously pulled to boost enrollment are either mostly tapped out or simply harder to move. Enrollment gains in the 1980s, when higher education also faced an enrollment trough caused by the smaller Generation X population, were driven largely by more women going to college. In contrast, the large demographic groups now underrepresented in higher education—students of color and low-income students—are much more likely to either not start college or stop out without a degree.11
Meanwhile, higher education leaders looking for answers to their enrollment puzzle are turning their attention to adult students. The number of people who began college but left without a credential grew to 39 million in 2020, up nearly 9% from two years ago.12 That represents more than one in five people in the United States over the age of 18, according to the National Student Clearinghouse Research Center.
For all the potential the adult student population offers, however, re-enrolling those who already have a head start toward a degree is not as easy as many leaders make it out to be. Compared to prospective 18-year-old college students, who are largely found in high schools, locating adult students who have accumulated post-secondary credits but are short of a credential is much more difficult. On top of that, persuading them to come back to college is also tough when tuition costs are high, good-paying jobs are bountiful, and the payoff of the degree is either unclear or something that seems far into the future.
No matter how American higher education reverses these enrollment headwinds and begins to reimagine its operating model to attract millions of learners left out of the system right now, doing so is critical to the nation’s future and its place in the global economy. At a time when population growth is slowing around the world, higher education has evolved as the newest natural resource to keep up with the demands of the labor market. The remarkable ascent of China and India, along with other middle-income countries, has upped the competitive pressure on nations everywhere to improve access to postsecondary education. China and India, according to Nicholas Eberstadt of the American Enterprise Institute, are on track to overtake the United States in the percentage of working-age adults (aged 25 to 64) with postsecondary education in the next 10 to 15 years.13
The United States can no longer assume its pole position as the dominant source of higher education across the globe, which has widespread ramifications for the operating model of colleges, the future of the American workforce, and global security. The challenge for American colleges and universities is to set themselves apart as whole institutions rather than to stake their future on a handful of new academic programs, a revised recruitment strategy, or a bolstered set of online offerings. Change around the margins is no longer enough to reverse or even slow down these enrollment trends.
Higher education in the United States has only known a growth mindset for much of the nation’s history. The issue facing higher education now is not adequate demand among learners; it’s a mismatch of supply focused on a segment of students where demand is no longer growing. Figuring out how to continue to grow by reaching new populations of learners is a necessity not only for the financial sustainability of the sector in general but also for the nation as a whole.
To navigate these headwinds and seize opportunities, each institution should first define its target audience and present a clear value proposition for this audience, assessing if this population has the scale to sustain the institution. With a sustainable “raison d'être,” institutions should intentionally identify areas of strength on which to focus while scaling back on areas that are not aligned and/or are underperforming. Successful institutions will develop innovative academic offerings (not just degrees) that are integrated across the institutions to serve their learner population and design lifelong learning opportunities for re/upskilling.
Eberstadt, “The changing global distribution of highly skilled manpower.”
View in ArticleThe authors would like to thank the following colleagues for their sizeable contributions to the report: Tiffany Dovey Fishman, Pete Fritz, Cynthia Vitters, and Jake Braunsdorf. They would also like to thank the participants in Deloitte’s inaugural Forum on the New Era of Higher Education, whose perspectives and insights helped shape the contents of the report.
Cover image by: Sonya Vasilieff and Sofia Sergi
