GoKawiilThe “demographic cliff” is upon us. The number of teenagers graduating from American high schools peaked last year. It will begin declining this spring and keep falling steadily through at least 2041. The trend is more of a downward slope than an abrupt falloff, but the gradient is steep and represents a crisis to colleges dependent on filling classroom seats and dorm beds. The United States currently has about 4,000 colleges. According to a recent study from the Federal Reserve Bank of Philadelphia, about 60 are closing on average each year; that number could double in any given year if the bottom falls out of enrollment.
If the harm were only to the institutions forced to close because they’re running out of customers, that would be unfortunate but not tragic. But the causality runs in the other direction too, as students who otherwise would have gone to college find themselves with no viable option in the place where they live. American higher education has long consisted of two markets: one where high-achieving, typically affluent students compete for seats at national universities, and one where mostly middle- and lower-income students stay closer to home. Members of the first group will be fine even as college closures accelerate. The second group will suffer. After many decades of democratization, higher education could once again become a luxury good.
Over the past half century, as more teenagers have enrolled in higher education, what was once mostly a local business has become national, especially for top students, whose sense of distance has gradually shifted. Campuses that once felt far away now seem closer, thanks first to interstate highways, then to discount airlines, and then to technology. Parents in the 1980s might have talked to their college kid on a dorm-floor pay phone once every few weeks, if they were lucky. Today’s parents can text and FaceTime their kids multiple times a day.
Even so, roughly half of students at four-year colleges still attend one within 50 miles of home. The result is a market divided into two: one built on national brands that attract high-performing students from everywhere, and another that serves a local and regional population of place-bound students. Those two markets have hardened in recent years. Applications to the roughly five dozen campuses that accept fewer than 20 percent of applicants have skyrocketed, from nearly 800,000 two decades ago to more than 2.35 million today. This is largely why the admissions process feels so much more competitive to parents who went to college in the ’80s and ’90s. The pool of top students hasn’t grown that much. What’s changed is that the top students from Los Angeles and Chicago and Atlanta and Buffalo are now applying to the same schools, where the size of the freshman classes have barely budged since the ’70s. And each student is applying to more of these schools.
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As they lost more and more local students to national universities, regional colleges found ways to stay afloat. They expanded access for underrepresented groups, added programs and amenities to attract students who might have skipped college otherwise, and partnered with the private sector to reach new markets online and internationally. For a long time, they could count on finding enough teenagers to fill their freshman class.
That era is over. Undergraduate enrollment nationwide has mostly been falling since 2011, even before the demographic cliff. Now, with fewer 18-year-olds in the pipeline, the enrollment machine at local and regional campuses is running out of fuel.
If you overlay a map of where colleges are located with projections of high-school graduates, you’ll notice an immediate disconnect with supply and demand. The Northeast and the Midwest have the highest density of college campuses but will also see some of the biggest declines in the number of high-school graduates by the 2040s. In all, 38 states are projected to see a drop in the number of graduates. Only 10, most of them in the South, will experience growth.
Unlike a Home Depot or a McDonald’s, colleges can’t simply relocate when the nearby population shrinks. “When local options start to disappear, it can start a downward spiral,” Nicholas Hillman, a professor at the University of Wisconsin at Madison who studies the geography of higher education, told me. Colleges come to resemble zombie malls with fewer majors and students, eventually ending up in a doom loop they can’t escape.
In 2022, Pennsylvania merged six schools in the 14-campus Pennsylvania State System of Higher Education into two new institutions. “We were built and operating as if we still had 120,000 students, when in reality we only had 85,000,” Daniel Greenstein, the former chancellor of the system who oversaw the merger, told me. The merger preserved some physical presence, but at a cost, Greenstein said. Students who wanted to be on a campus could be, but many advanced courses with small enrollments and specialized faculty would be offered solely online.
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