Fall 2020 higher ed’s enrollment decline, an update

American college and university enrollment declined this semester. In this post I’d like to update you with the latest developments on the trend.

To start with, let me explain why this matters.

The vast majority of American colleges and universities strongly depend on students for their income.  Fees, room and board, and especially tuition flows from students who take classes and/or their families and/or their external scholarship sources.  State governments fund only about two thirds of United States campuses, and generally at historically low levels, as in a minority of revenue.  Only a vanishingly small handful of campuses have endowments large enough to matter.

So enrollment is crucial for the typical college or university’s survival.  If the number of students drops, a school can try to make up for the loss by recruiting wealthier learners, since college pricing is actually variable.  But competition for the children of the 1-5% is incredibly fierce.

Now, total enrollment – not how many students are enrolled at one campus, but the number of students taking classes at all American campuses – grew from the 1980s through a historical peak at 2012, and has declined every year since.

Got it?  Please leave questions in comments.  Now for the latest data.

First, the National Student Clearinghouse Research Center has updated their fall 2020 findings (see here and here for earlier versions).  Overall, total enrollment dropped 3.3% from fall 2019 to 2020.  Undergraduate numbers show a steeper decline, 4.4%:

enrollment US undergrad 2020 Nov 18 Clearinghouse

That’s across all sectors, including 2- and 4-year institutions.  For-profits are nearly stable, while community college losses mounted to nearly 10%.

Grad programs are a study in contrast, now hosting 2.9% more students than last year:

enrollment US grad 2020 Nov 18 Clearinghouse

The undergrad decline struck across all ages and both genders:

enrollment undergrad by age and gender 2020 Nov 18_Clearinghouse

Although male numbers dropped more than women’s, which should strengthen the established female majority in America’s cumulative study body.

Declines and rises similarly played out across race:

enrollment US degrees by race_2020 Novv 18_Clearinghouse

Note the serious drop in international students (“Non-Resident Alien”).  More below.

A crucial dimension in the Clearinghouse data is the sharp decline in first-year* undergraduates.  That population dropped 13% or more than 1/8th.  Again, that was across all races:

enrollment changes by ethnicities

Three more things to note.  There are still more undergrads than grad students, so the former’s decline overpowers the latter’s in terms of total effect.  Then there are wild differences between types of degree:

enrollment US credential types 2020 Nov 18 Clearinghouseenrollment US credential types 2020 Nov 18 Clearinghouse

BA/BS degrees are only down a little, while associate’s and undergrad certificates plunged 9% apiece.  Graduate and post-bac certificates are growing more than master’s or PhDs.

And results play out interestingly in terms of space.  The decline pattern holds out across national regions.  The midwest is suffering the largest total undergrad enrollment drop, 5.7%, while the south is dropping the least, at just 3.8%.  Meanwhile, urban campuses declined less than those located in rural areas or small towns:

enrollment by space 2020 Nov 18_Clearinghouse

Second, a new survey from the Institute of International Education (IEE) reveals that international student numbers fell dramatically this term.  Julie Baer and Mirka Martel found that “[t]otal international students at higher education institutions in the United States and studying online outside the United States decreased by 16 percent in Fall 2020.”  A large number of international students were accepted to study, but deferred actual enrollment:

90 percent of institutions report international student deferrals. These institutions indicate that more than 40,000 international students have deferred their enrollment to a future term.

One key detail: “New international student enrollment in the United States and online outside the United States has decreased by 43 percent in Fall 2020.”

Another crucial point: 20% of international students study online.  Put another way, “80 percent of international students are studying in the United States while 20 percent of international students are enrolled online outside the United States.”

Where do international students come from?  Inside Higher Ed presents this useful map:

Top 10 Places of Origin for International Students

What can we take away from these two studies?

Very briefly, and in effort not to repeat myself too much:

Declining enrollments in general are bad for campus business models, unless the school can boost income from some other source.  This happens right after a spring semester which hit campuses hard to the extent they depended on residential students. And it occurs when state governments are tending to cut support to public higher education.

An enrollment drop means increased competition between institutions.  The obverse of that is increasing difficulty in mounting collaborations among them.

While all races have stepped back from higher ed, black, native American, and Latinx people seem to have done so in higher numbers than whites and Asians.  This is bad news for the goal of supporting more underrepresented minorities in post-secondary education.

Declining international enrollment is especially salient for two reasons.  Non-US students are much more likely to be “full pay”: paying an institution’s published tuition.  And many fulfill popular plans for increasing campus diversity, as most are not white.

The relative success of graduate programs suggests colleges and universities might be tempted to shift resources in that direction, away from undergrad degrees.

The sharp cut in first-year students in general suggests we’ll see 1-3 years of echoes, as each succeeding year’s class is that much smaller.  For international students, we might experience a version of that.

Note that China remains the largest source of international students.  We need to watch carefully to see how geopolitics shapes that.

This is one set of data for a very hard semester.  Be safe and take care, everyone.

*I abhor the word “freshmen.”  It’s clearly sexist and at best antiquated.  “First-year student” might add syllables but is worth the amendement.

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6 Responses to Fall 2020 higher ed’s enrollment decline, an update

  1. Glen McGhee says:

    We need to triangulate with FSA’s FY2020 Annual Report that just came out, showing even bigger changes.

    FSA has oversight responsibilities for more than $1.5 trillion in federal student loans, of which it directly owns and manages approximately $1.4 trillion. The remaining balance represents nondefaulted FFEL Guaranteed loans held by lenders and Federal Perkins loans held by schools, as detailed in Note 5.

    As described in Note 1 and Note 5, FSA reports its portfolio of federal student loans on its Balance Sheet, on the line item Credit Program Receivables, Net. [[TOP of page 163, internal pagination]] This is the gross amount of loans and interest receivable less an allowance for the present value of amounts not expected to be recovered (Allowance for Subsidy).

    Subsidy Expense is a factor included in the Allowance for Subsidy and represents an estimate in present value terms of the cost to the government of direct loans and loan guarantees. Subsidy Expense is recorded in the year a loan is disbursed and updated annually through a re-estimation process. It includes default costs (net of recoveries), contractual payments paid to third-party private collection agencies (PCAs), and net borrowing costs, less any origination or other fees collected.

    If the net cost to the government is greater than zero, then the subsidy expense is said to be positive. However, the subsidy expense may also be zero (break-even), or it may be negative if the estimated cost of providing loans to borrowers is less than the value of collections received as interest and fees. As of September 30, 2020, FSA reported $1.2 trillion in Credit Program Receivables, Net after deducting an Allowance for Subsidy of approximately $258.3 billion. Credit Program Receivables, Net was 0.3 percent less than the prior-year amount which resulted from a 8.9 percent decrease in FSA’s underlying portfolio of credit program receivables that was offset by adjustments that decreased the FY 2020 Allowance for Subsidy by approximately 38 percent from the FY 2019 amount. The reasons for the adjustment to the Allowance for Subsidy estimate are explained in Note 5.

    NOTE 5 is pages 180 (internal page numbers) to 191.
    See this? ($258,303 million) are updated anticipated losses? Page 180, NOTE 5.

  2. Just use the word ‘frosh’ instead of ‘freshmen’. It’s shorter, works in singular or plural, and is very clear.

  3. Glen McGhee says:

    Some really unbelievable graphs here. But I think the legend for Figure 1 should be reversed, should be p10=Top 10%, p25=top 25%, Median, p75=BOTTOM 25%, p90=BOTTOM 10% of student loan debt held over time.

  4. Pingback: More College Application Deadline Extensions – Creative Marbles Consultancy

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