As Birth Rates Decline, Students Get a Leg Up
Decreasing enrollments pose challenges for colleges, but students may gain leverage as schools compete for them.

Nathan Grawe is a professor of economics at Carleton College, in Northfield, Minn., and author of Demographics and the Demand for Higher Education and The Agile College.

What demographic shifts are occurring in the U.S. population? In a longstanding trend, we’ve seen a reshaping of our population’s composition. Geographically, we see young families moving out of the Northeast, and to some degree off of the West Coast, and moving toward the South and South-Central U.S. We’re also seeing differences in fertility across races and ethnicity groups, and the share of the population that is non-Hispanic white has been declining. For colleges and universities, this has been proceeding at a faster clip than in the population at large because younger generations are more diverse.

More recently, a decline in fertility that seemed to coincide with the Great Recession started in 2008, and it has persisted more or less ever since. We’ve seen a decline in total births by more than 15%.

How are these changes affecting colleges and universities? Nationally, we won’t see the impacts of the fertility decline directly until 2025. But the Northeast quadrant of the country—including New England and the Rust Belt—was experiencing low fertility even before 2008. Closures and mergers among institutions have disproportionately occurred in that region. Institutions that remain open often report that they are struggling with declining enrollments, and they were doing so long before the pandemic. So we’re starting to see in one geographic region some stresses that result from declining numbers of young people at the same time that the rest of the country is concerned about what might be on the horizon.

How are institutions responding? We’re seeing more attention on retention. If institutions lean in to student success and persistence, enrollments actually could go up despite the fact that we have fewer students coming through the front door.

Expanding the footprint of higher education is another approach. For example, Drake University, in Des Moines, Iowa, has added a two-year associate’s degree program. Drake identified a student group in its community that wasn’t being well served.

In an example of creative thinking about financial aid, Queens University of Charlotte, in Charlotte, N.C., has partnered with some local employers. In essence, the employers are paying for the educations of local undergraduate students and providing externships along the way, with the hope that they will be able to hire these students when they graduate. Employers are going to be starved for talent as the number of young people declines, so there might be more creative partnerships between employers and higher ed.

What are the other potential advantages for students? In general, students are going to be a scarce commodity in the next few decades. Students may have a little bit more leverage in conversations with institutions about what they expect the institution to provide. We may see institutions nudged to being more student-centered, whether that’s in advising, in teaching or in the financial-aid office, as institutions become more aware that they need students more than students need the institutions, at least relative to where we were 15 years ago.

Can students make moves to maximize financial aid as colleges compete for them? As we move into a more competitive environment, students who are interested in local institutions may find that by applying to more institutions, they’ll get more financial aid offers, and some of those aid offers may differ significantly. The potential return of submitting one or two more applications becomes greater.