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November 29, 2013 2:00 PM College Enrollments Decline. Get Used to It.

By Daniel Luzer

From the Wall Street Journal comes news that colleges just aren’t getting the tuition revenue they’re used to anymore, because fewer students are applying. According to the article:

Nearly half of the nation’s colleges and universities are no longer generating enough tuition revenue to keep pace with inflation, highlighting the acceleration of a downward spiral that began as the recession ended, according to a new survey by Moody’s Investors Service.
The survey of nearly 300 schools reflects a cycle of disinvestment and falling enrollment that places a growing number at risk. While schools for two decades were seeing rising enrollments and routine increases of 5% to 8% in net tuition, many now are facing grimmer prospects: a shrinking pool of high-school graduates, depressed family incomes and precarious job prospects after college.

Well “depressed family incomes and depressed family incomes and precarious job prospects after college” surely matter, but it’s surely that other thing, a shrinking pool of high-school graduates, that matters most. If there were enough students who wanted to go to college, after all, they would have to just get over it and pay the high tuition, though loans. But that’s not what’s going on.

Fewer students are just applying to college at all. College enrollment fell 2 percent last year. We’re likely to see the numbers fall again for the next few years.

And that’s because, according to this piece at MSN, “enrollment increased 11 percent between 1990 and 2000 and 37 percent between 2000 and 2010, when the 18- to 24-year-old population rose from approximately 27.3 million to approximately 30.7 million.” Since then, however, the college-age population has been dropping.

This is, more than the Obama administration’s efforts to evaluate colleges, an potential change in federal financial aid, and or credit hours, probably the most important trend in academia. There just aren’t very many potential students anymore.

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Due to an increased birth rate over the last 30 years, more and more high school students applied to college every year. Colleges, particularly private ones, took advantage of this increased demand by hiking tuition, building more and nicer buildings, and renovating their campuses to make them all look like resorts.

This trend is now over. It’s easier to get in to many college.

This means that schools are now in a much weaker position and will have to compete harder for students. How this all will work remains unclear, but it could potentially be very beneficial to students, who are now in a stronger position as they select colleges. Colleges can’t charge such high tuition if they’re struggling to attract students. This might finally be a way to keep tuition in check.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer

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