Reposted from Forbes, with permission.
In the knowable future, the pool of newly eligible college freshmen will shrink. That freshmen recession will start somewhere around 2026 and may continue for a decade or longer. That forecast is well known. Books have already been written about it.
Nonetheless, a new report out this month from the higher ed data analytics and SaaS firm Othot, puts that coming decline in stark, unusually precise and specific relief. The report is important because it’s based on institution-level data from more than 450 colleges and universities and looks at how each of them may fare when their particular pipeline of high school graduates slows down. In other words, it goes beyond the standard “schools in the industrial Midwest will suffer while the sunbelt is great” stuff.
Because this report goes much deeper, it has some very insightful headline-worthy findings such as that eight in ten schools – regardless of where they are, how big they are or what type of school they are – will see their freshmen enrollments shrink after 2025. By and large, only the most elite and those schools that recruit from high-growth states without significant competition are in the 20% that won’t face a decline. Even then, the report says, schools in that narrow 20% band will see only flat incoming classes or, at best, very modest gains.
Many schools on the other side of that, in the 80% of schools facing declines, will face steep, even terrifying droughts. Even among large public schools, the report says, one in four will see declines approaching or exceeding 10%. That should get the attention of some school leaders. Or at least you’d hope so.
There are some definite and unavoidable geographic realities to the coming demographic changes — even in surprising ways. Squeezes in Michigan and Pennsylvania may be expected. But seeing states such as California and Virginia facing enrollment contractions is new.
But the real headline of the report, the authors say, is that while geography is important, it’s not controlling. As example, the report cites two schools that not only share a state but a city – the University of Chicago (UC) and the University of Illinois, Chicago (UIC). While you may think those two schools would ride demographic waves similarly, they are not likely to. Even though it’s considered an elite school, the report says the University of Chicago will likely face an enrollment decline of 4% while UIC will have to deal with a drop of 11%.
“Of course a school’s location matters,” said Andy Hannah, co-founder and chairman of Othot. “But, in the 2020’s we will see wildly different outcomes even for schools located in the same city – a result of their current geographic recruiting strategy and expected competitor pressures.”
Competition, they say, is a significant and overlooked consideration in forecasting institutional enrollment. That’s because, as enrollments shrink nearly everywhere — at those estimated 80% of schools — schools will pivot to recruit new places in new ways. They’ll have no choice. That means, if you play that out a bit, even schools that think they’re safe because they recruit in areas expecting moderate growth may find unexpected business cards on the desks of career advisors at their local high schools.
Another takeaway from the work done in this report and analysis is that it’s possible for institutions to already know a great deal about what the future holds for them personally, not just regionally. Some smart math and applied data crunching can give a college leader an idea whether they’re facing an upcoming unpleasant dip of 5% after 2025 or a potentially catastrophic chasm of 20% or more. As noted, relying on geographic shorthand such as “we’re in California, we’re fine” or “Florida is a growth state” may be asking for trouble. Many schools in both those states will see steep declines in freshmen enrollments, and soon.
“We’ve made these projections available for the 450 schools we analyzed in this report and, in the short term, are offering to do similar, complimentary projections for any other school interested,” said Hannah. “Schools need to know the future they are facing and understand the types of data and analytics that are available. With this information, they can develop and act on strategic plans that enable them to adapt and thrive in the future.”
Knowing more about what you think you already know feels smart, especially when the stakes are this high. And for colleges, the stakes don’t get much higher than dwindling enrollments. That much we know already.