The number of students heading to college is projected to be the biggest ever in the fall – before declining precipitously in the years after. For some schools, that’s more than just a demographic concern.
The term “enrollment cliff” has been around in higher education circles for more than a decade.
Nathan Grawe is a professor of economics at Carleton College and the person who coined the term.
“The phrase ‘enrollment cliff’ just refers to the idea that we anticipated a decline in the number of young people headed to college because there's been a decline in the number of births,” Grawe said.
A decline in birth rates means the potential pool of college applicants is shrinking.
“With a 17% decline in the number of young people having been born, we would have to see an increase in matriculation rate that is frankly, not realistic,” Grawe said.
This reality presents unique financial challenges for schools. If they can’t recruit enough students, some Missouri schools face significant cuts or closure.
Last March, Fontbonne University leaders announced the school would close, amid budget shortfalls brought on by a more than 70% drop in enrollment in the last 15 years.
The Scholarship Foundation of St. Louis published a watch list of schools that could potentially end up in similar positions. The foundation evaluated the financial health of institutions using scores from the U.S. Department of Education and the Forbes College Financial Health Score.
Of the 35 schools listed, 14 are in Missouri. Roughly a third of Missouri schools on the list are listed as having significant financial struggles.
Faith Sandler is the Scholarship Foundation’s executive director. She said her group wanted to better inform students of their options after seeing the impacts of abrupt closures like Fontbonne’s.
“Once the impending closure is announced, for students who especially are the first in their families to take this step, it's very difficult to regroup,” Sandler said.
The resulting report said some schools may use “aggressive marketing and selective messaging,” including announcements about admitting their largest freshman class or starting new programs.
William Woods University in Fulton said this year’s freshman class is its largest ever – but it still made the Foundation’s list. William Woods received the lowest score a school can get and still be considered financially responsible.
John Fougere is the school’s vice president of Strategic Communications. He said the score speaks more to the conditions of the last few years than the school’s viability.
“You throw in the COVID-19 pandemic in 2020, and then the overall cost of just doing business for smaller private colleges,” Fougere said.
Both Sandler and Fougere agree the pandemic was a huge blow to institutions, especially smaller private ones.
Sandler said COVID-19 relief funds helped support schools that were struggling financially. But now those are largely spent.
“We saw a financial cliff for a number of colleges and universities who were already in trouble, but had that trouble abated a bit thanks to relief funds,” Sandler said.
Fougere said William Woods has been preparing for the financial impact of the enrollment cliff with what the school calls a “professions-oriented” approach.
“We are constantly looking at our programs to make sure we are offering academic opportunities that are provided graduates who are in demand by today's employee,” Fougere said.
Still, Nathan Grawe said schools have to be proactive and consistent to avoid issues.
“If we were to see colleges and universities do better in the way of retention and persistence to degree, enrollments might be supported, even though the number of young people going to college through the front door is falling,” Grawe said.
