Looming ‘enrollment cliff’ for high school graduates threatens future of higher education

U.S. high schools will graduate a record 3.9 million students in 2025 before entering a long decline that threatens the future of higher education, a report shows.

In findings published Wednesday, the nonprofit Western Interstate Commission for Higher Education projected the headcount of public and private high school graduates will fall by more than half a million — or 13% — to less than 3.4 million by 2041, reversing decades of growth. That’s slightly above the 2009 tally of 3.3 million graduates.

The report said only the South will graduate larger classes as growing cohorts of Hispanic and multiracial students favor the region. By contrast, declines in the numbers of White, Black and Asian students will dramatically reduce graduating classes in the East, Midwest and West.

“The news for colleges and the workforce is cause for concern,” said Demarée Michelau, WICHE president. “Yet even for the more populated states that will bear most of the decline, the bottom will not fall out overnight.”

Ms. Michelau said the findings call for universities to boost admissions among “recent high school graduates who historically haven’t been well-served by our education systems, those who may be leaving college short of a degree, and adult learners, including those with previous college experience.”

President Dwight D. Eisenhower established the Boulder, Colorado-based WICHE as one of four regional interstate compacts in 1953. It has released 11 high school graduation reports since 1979.

The commission represents Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, North Dakota, Oregon, South Dakota, the U.S. Pacific Territories and Freely Associated States, Utah, Washington and Wyoming.

This year’s report cited falling birth rates as the cause of the looming “enrollment cliff,” noting that budget-conscious couples had fewer children after the 2008 recession.

Surging living costs since the pandemic suggest this trend will continue. In April, the Centers for Disease Control and Prevention reported that the U.S. birth rate slid to its lowest point in over a century last year, as the agency tallied 3.6 million newborns and 54.4 births per 1,000 women.

According to education insiders interviewed by The Washington Times, these trends will pressure hundreds of high schools and colleges to close or merge and add to growing labor shortages as most baby boomers retire by 2030.

“Almost all colleges will either need to shrink to stabilize their finances or engage in large-scale mergers, just as this country has seen in almost every other industry,” said Gary Stocker, a former university administrator who founded College Viability to evaluate campuses’ financial sustainability. “There are too many colleges and not enough students willing to pay even heavily discounted tuition.”

Regional trends

The commission report found declines in five high-population states will make up three-quarters of a 10% nationwide drop in graduating classes from 2023 to 2041: California (29%), Illinois (32%), Michigan (20%), New York (27%) and Pennsylvania (17%).

Analysts say it’s essential for struggling colleges in those states to work with high schools to improve their application pipelines and with employers to improve job prospects. They noted that Hispanic students are less likely than others to attend college and that rising education costs have discouraged many high school graduates from applying to four-year programs in recent years.

“While colleges cannot control birth rates, they can influence K-12 education to better prepare the shrinking number of high school graduates for college,” said Lance Izumi, a past president of the Board of Governors of the California Community Colleges and analyst at the free-market Pacific Research Institute.

“As the competition for tuition dollars increases, I hope a few entrepreneurial institutions will attract more students by upgrading their instruction,” added Jonathan Zimmerman, a professor of the history of education at the University of Pennsylvania, an Ivy League school.

Tuition-dependent colleges have piloted three-year bachelor’s degrees, offered direct admissions to high school students and launched dual-credit courses for teenagers in recent years to offset a decades-long enrollment decline that accelerated during pandemic restrictions.

Some have expanded low-cost online programs and short-term vocational certifications for skilled trades, hoping to capitalize on recent enrollment growth in those areas.

“Larger colleges in more desirable regions or those providing robust online learning opportunities will be affected the least,” said Melissa Loble, chief academic officer at Instructure, which makes the Canvas software that many campuses use for hybrid and virtual learning. “Small to medium-sized colleges with high price points, less flexibility, and limited online programming will face the largest challenges.”

Michael Warder, a California-based nonprofit consultant and former vice chancellor of private Pepperdine University, said rising costs have combined with a 50% decline in the U.S. birth rate since 1950 to paint a bleak picture for small colleges.

“To survive, some colleges may reduce enrollment standards to accept lesser qualified students,” Mr. Warder said. “Others may quietly transition into vocational schools.”

In the South, WICHE estimated that high school graduates will increase significantly in three fast-growing states from 2023 to 2041: Tennessee (15%), South Carolina (14%) and Florida (12%).

Graduation numbers in other Southern states will grow more slowly or stay relatively flat. That includes an estimated 1% decline in Georgia, a state that combined 18 public colleges into nine institutions between 2013 and 2018.

“Elite institutions, including many but not all flagship research universities, are relatively insulated,” said Timothy Cain, a higher education professor at the flagship University of Georgia. “Small, tuition-dependent institutions are in more precarious positions.”

Racial trends

Based on birth and immigration trends, the commission report estimated that Hispanic students will grow from 27% to 36% of public high school graduates by 2041. White students will drop from 47% to 39%, Black students will fall from 14% to 12% and Asian students will dip slightly after reaching a peak of 213,000 graduates in 2034.

As demographics change, the report predicts urban high schools will see the sharpest drop in graduates by 2041. Rural schools will see a tiny increase and suburban campuses will see a moderate uptick.

Economists say that means public high schools could start vanishing from gentrifying urban areas as the nation’s dwindling families cluster in the suburbs.

“School districts will be pressured to close schools to save costs and perhaps even merge with neighboring districts to spread their fixed costs over a reasonable number of students,” said Charles Goldman, a higher education economist at the Rand Corp.

According to the Education Department’s National Center for Education Statistics, there were about 24,000 public high schools and 8,000 private high schools in the U.S. during the 2020-2021 academic year.

Gema Zamarro, a K-12 education market researcher at the University of Arkansas, pointed to NCES estimates that enrollment in grades 9 to 12 will fall by 6% from 2022 to 2031.

“The main consequence is going to be a decline in school funding which could lead to staff layoffs, school closures, or elimination of programs,” Ms. Zamarro said.

The shrinking number of 18-year-olds is the clearest indicator the U.S. cannot sustain the roughly 4,500 colleges now eligible for federal aid, experts say.

“A recent uptick in college closures suggests the industry has already begun to feel the squeeze,” said Kyle Beltramini, a policy research fellow at the American Council of Trustees and Alumni, a liberal arts advocacy group. “It is also worth drawing attention to the rapid decline in consumer confidence.”

He pointed to a July Gallup poll that found more than two-thirds of Americans believed higher education was “headed in the wrong direction” and a May report from the Pew Research Center that showed only a fifth thought “college is worth the cost” if it meant taking out federal student loans.

On top of that, the politics of the incoming Trump administration could limit the longstanding strategy of some colleges to fill enrollment gaps by relying on China — the leading supplier of international students — or illegal immigration.

Experts say that makes it likely more colleges will gut low-enrollment humanities programs and reallocate resources to workforce training over the next few years.

“Tensions with the Chinese regime almost certainly mean the U.S. government will significantly restrict that flow in the immediate future,” said Peter Wood, president of the conservative National Association of Scholars and a former associate provost at private Boston University. “Another expedient is admitting immigrants, including illegal immigrants. But the number of immigrants qualified for college admission is nowhere close to filling the available seats.”