2. Students Are In Short Supply

Thanks to birth declines, we have too many college seats. Leaders must make hard choices in response.

Though there is no hint of it in glossy alumni magazines, or news stories about campus expansions and new buildings, in just a few years we will be in the midst of a 15 percent drop in the number of four-year college students. This projection is based on the number of children currently in our elementary- and middle-school pipelines. Lifetime births per American woman have been tumbling since the Great Recession, from 2.12 in 2007 (enough to replace the mother and father) to 1.77 in 2017.

Among many other consequences, this means we won’t require as many colleges and instructors in the future. In Demographics and the Demand for Higher Education, economist Nathan Grawe projects that tens of thousands of professors will soon be unneeded due to declining enrollments.

Different regions and different schools will feel these tectonic shifts in varying ways. New England and the Northeast will be hit hardest—because they are home to many colleges, a particularly serious birth dearth, and modest numbers of immigrants. College and university leaders will face different issues in states such as Texas, where immigration and a higher birth rate among Hispanics are moderating the decline in young people but yielding high levels of first-generation college attendees, who may need additional support.

Already, half of all four-year colleges are missing their admission goals. More than 80 percent of admissions directors now say they are concerned they won’t be able to fill classes. In 2017, a quarter of private colleges ran an operating deficit, and Moody’s estimates that around 15 institutions will permanently close their doors every year for the foreseeable future.

To succeed in this shrinking pool, Grawe suggests that schools will need to offer distinctive educational experiences. Colleges and universities should focus on their mission, know exactly what kind of student they serve best, prune areas where they are not strong, and innovate in remaining sectors to sharpen their services to match changing times. Donors should speed them down those paths and encourage them to be entrepreneurial in navigating market shifts—as campuses like Arizona State under president Michael Crow or Purdue under Mitch Daniels have been.

Alas, instead of focusing, pruning, and becoming more business-like and inventive, most colleges are trying to be all things to all students. In just the last six years, U.S. colleges and universities have added an astonishing 41,000 new majors and programs. That’s a 21 percent increase, pitched to a declining number of customers. And don’t think that those are all new programs in the natural sciences, history, or literature: colleges are offering new degrees in beer-making and peace education (one private liberal-arts college recently cut its math major while keeping its peace-studies major). It’s an expensive and wrong-headed response, what Robert Zemsky of the Alliance for Higher Education calls “a panic reaction….just spreading a thin broth even thinner.”

As our birth dearth unfolds across higher ed, one fundraising favorite that should become a tougher sell is new construction and campus expansion. Donors asked to fund fresh building should demand proof that new structures are needed and will be heavily utilized. Sometimes it may be smarter to invest in renovations that repurpose halls, or transform them to deepen the comparative advantages of that campus.

Colleges are going to find it harder to attract students in the future. This will often require bold change, letting go of weak programs, redoubled concentration on successful undertakings, or all of the above. Academic leaders who ignore these demands will be punished by merciless demographic realities. Donors can be influential in supporting the right kind of far-sighted approach at this moment of risk and opportunity.

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