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Beyond COVID, a longer-term college crisis looms

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While colleges and universities have been focused on responding to the COVID-19 pandemic the last 15 months, something that will likely have a more profound impact on their future has been happening with demographics and the labor market.

🌅 Good morning, and thanks for reading NEXT. Today’s edition—a 5-minute read—looks at declining birth rates, a job market few seem to understand, new research on virtual internships, and what happens when admissions officers consider family income in their decisions.

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Announcements

🚨TODAY at Noon ET/9 a.m. PT, Julie Lythcott-Haims will be joining me for NEXT on LinkedIn Live. Julie is author of the new book, Your Turn: How to Be an Adult, a perfect topic as we’re in the midst of college graduation season.

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📢New college admissions group. My friends at Grown & Flown have started a new membership group for parents navigating the college admissions process that offers live sessions with experts and a community of parents to help answer your questions about getting in and paying for college.

🛎The student experience. I’ve written here about how a college’s value will be increasingly measured not only by outcomes but what happens on campus during the intervening years. On May 19, I’m joining Hamilton’s Christopher Jackson and Nataly Kogan, creator of the Happier Method, at the virtual Qualtrics Experience Symposium to talk about the connection between student success and the student experience.

  • Register for free here.

A Demographic Cliff or Trough?

In an admissions year that was like no other, most colleges focused on the challenges right in front of them. Few peered very far into the future because they know if they did, the outlook didn’t get any better.

What’s happening: College leaders have known for a while that a demographic cliff among traditional-age students is coming in 2026.

  • The number of high school graduates peaks at 3.93 million in 2025.
  • In 2026, the numbers of students graduating from high school starts to steadily decline, as the children born during the Great Recession come through the pipeline.
  • The downturn ends in 2031, but rather than an uptick in graduates, it’s more of a steady state for a few years before the numbers start falling again.

What’s new: Last week, the U.S. government reported that the number of births nationwide in 2020—3.6 million—were the lowest since 1979.

  • A decline in births of 4% from 2019 to 2020 is the extension of a trend since the economic downturn of 2008.
  • The birthrate has fallen by 19% since its recent peak in 2007.
  • December was a low point in births in 2020—a month when babies conceived at the beginning of the pandemic would have been born.
  • 25 states had more deaths than births last year, up from 5 in 2019, according to the University of New Hampshire

Why it matters: If kids aren’t born they don’t go to college. Higher education has been through demographic droughts before, but rising immigration, higher college-going rates among high school graduates, and more students from overseas have typically filled in the gaps. Now all three spigots have slowed.

  • The “immediate college going rate,” an official government measure that looks at students who go right from high school to college, has largely remained at around 70% for the last 5 years.

The big picture: Colleges are not only looking at a demographic cliff, but systemic demographic changes in their primary base of students.

  • The U.S. population over the past decade expanded at the second-slowest rate since the government started counting in the 18th century.
  • The decline also comes in parts of the country that are home to the highest density of colleges and universities—the Northeast and Midwest. In the map below, red indicates declines in the number of people under 15 years old; blue indicates increases.
  • Unlike Home Depot or Walmart, colleges just can’t shutter their campuses and easily build new ones where their customers are.

What’s next: White students, who traditionally have immediately enrolled in college at a higher rate than other teenagers, made up about 50% of last year’s high school Class of 2020. By 2025, their proportion falls to 46%.

  • If colleges want to continue to draw students from high school, they need to increase their share of historically underrepresented students—and quickly.

One bright spot for colleges is that the education gap of mothers has narrowed considerably in recent decades.

  • Typically, women with higher levels of education have been less likely to become mothers.
  • Now, women with more education are becoming mothers. That matters because historically their children were more likely to go to college. 

Read more from Pew Research Center.

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The Disappearing Workforce

Long-term demographic trends not only have repercussions for higher education, they also impact the job market. That, in turn, influences demand for education.

In the news: Everyone it seems is still trying to make sense of last week’s April jobs report which showed considerably slower growth than expected.

  • Last year at this time, everyone was expecting a deep Covid-recession. Now, everywhere you look there are “Help Wanted” signs. But where are the workers?

“We have all these open jobs, and no one is applying.” – Rob Sentz, chief innovation officer at Emsi

By the numbers: Emsi, a labor-market-analytics company, released a report last week that uncovers what it calls three “pre-existing conditions both revealed and exacerbated by 2020”:

  1. The mass exodus of baby boomers from the workforce.
  2. The kids and grandkids of those baby boomers who have opted out of the workforce.
  3. And the low birth rate (as outlined above).

What’s happening: As The Washington Post’s Heather Long outlined last week after the jobs numbers were released, “there is a great reassessment going on in the U.S. economy.”

  • Lots of people want to do something different with their lives than they did before the pandemic.
  • The problem is a mismatch in skills. “You can’t train a one-time courier on a bike to become an IT specialist overnight,” Bernard Baumohl, chief global economist at the Economic Outlook Group, told Long.
  • Economists describe this phenomenon as “reallocation friction.” That’s when jobs are changing and workers take awhile to figure out what they want—or what skills they need.

The bottom line: The adult market has long been the beacon of hope for colleges hoping to survive the coming demographic trough. But except for a few outliers, most colleges haven’t or don’t want to figure out how to serve this huge market. Others from LinkedIn Learning to Google to Pluralsight realize the opportunity and threaten to leave legacy players in higher education far behind if colleges can’t figure this out.

Virtual Internships

Much like education went remote last year, so did many internships for college students. But perhaps not as many as we thought.

Early look: Soon-to-be-released findings from Center for Research on College-Workforce Transitions at the University of Wisconsin at Madison found in a survey of nearly 10,000 students on 11 campuses that most didn’t take an internship during COVID-19 (78%).

  • Of those who did take an internship, a surprising number (48%) were in-person. 45% were online; the rest were hybrid.

The big takeaway: Online interns reported lower satisfaction with their internships. (I’ll dive deeper into this research when it’s released.)

  • Internships are the ultimate in hands-on, experiential learning that develops the soft skills.
  • But online interns reported being engaged in high-skill supervised work les than in-person interns (32% to 40%).
  • The researchers also found online interns had more difficulty acquiring critical “soft skills” and found less growth in their professional networks compared to students with in-person internships.

SUPPLEMENTS

Vaccines and Visas
Vaccines and Visas

On the latest episode of Future U, Michael Horn and I are joined by higher-ed reporters from The Washington Post, NPR, and Open Campus to talk about the past year and what the future will hold for campuses—including the stories that they believe aren’t being discussed nearly enough.

How Family Finances Sway Admissions Decisions
How Family Finances Sway Admissions Decisions

In an excerpt from Who Gets In and Why, I look at how one college weighs financial need in the admissions process and how academically strong students are denied in lieu of students from higher income families.

What's a College Degree Worth?
What’s a College Degree Worth?

A new analysis suggests a person’s race and where they go to school can predict their earnings. (Inside Higher Ed)

Until next time, Cheers — Jeff

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