This report focuses on the decreasing enrollment in the US higher education. The report discusses the latest higher education enrollment statistics by the US Census Bureau, along with statements by various higher educational institutions and organizations, mentioning decreasing enrollment trends. The report further analyzes the reasons behind the decrease in college enrollment, followed by the steps that higher education institutions to are taking, to increase their enrollment.

1. DECLINE IN THE US
COLLEGE ENROLLMENT
NOVEMBER 2013
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2. Decline in the US College Enrollment
T ABLE OF C ONTENTS
About the report ........................................................................................................................................... 2
Decrease in college enrollment in the US ..................................................................................................... 3
Reasons behind decreasing college enrollment ........................................................................................... 5
Decrease in adult education enrollment .................................................................................................. 5
Improvement of economy ........................................................................................................................ 7
Falling number of high school graduates .................................................................................................. 8
High cost of financing................................................................................................................................ 9
How are colleges improving their enrollment? .......................................................................................... 11
Reducing Tuition Fees ............................................................................................................................. 11
Reaching out to school students............................................................................................................. 12
Communicating value proposition to students ...................................................................................... 13
Use of analytics and research ................................................................................................................. 15
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3. Decline in the US College Enrollment
A BOUT THE REPORT
This report focuses on the decreasing enrollment in the US higher education. The
report discusses the latest higher education enrollment statistics by the US
Census Bureau, along with statements by various higher educational institutions
and organizations, mentioning decreasing enrollment trends.
The report further analyzes the reasons behind the decrease in college
enrollment, followed by the steps that higher education institutions to are taking,
to increase their enrollment.
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4. Decline in the US College Enrollment
D ECREASE IN COLLEGE ENROLLMENT IN THE US
As per the latest statistics by the US Census Bureau released in September 2013,
country’s colleges have witnessed a decrease in their enrollment. The college
enrollment in fall 2012 has decreased by 467,000, reducing from 20.40 million in
fall 2011 to 19.93 million in fall 2012.
F IGURE 1: C OLLEGE ENROLLMENT STATUS IN THE US — O CTOBER 2008–O CTOBER 2011 ( MILLIONS )
20.28
20.40
19.93
19.76
18.63
2008
2009
2010
2011
2012
College Enrollment
Source: US Census Bureau; Indalytics Advisors
Though the published figures are of 2012, colleges and universities across the
country are still facing decrease in enrollments.
In Arkansas, the University of Arkansas at Pine Bluff has witnessed a 7.5% decline
in enrollment in fall 2013, while University of Arkansas at Little Rock has
witnessed a 3.6% decline. The trend is same at State University at Arkadelphia
(5% decline), Arkansas State University at Jonesboro (2.4% decline), University of
Arkansas at Fort Smith (2.4% decline), and University of Arkansas at Monticello
(1.2% decline).
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5. Decline in the US College Enrollment
Loyola University is expected to have a budget shortfall of US$9.5 million in its
next fiscal year. The university was able to enroll approximately 30% less
students, than expected, by July 2013. The shortfall accounts for approximately
6% of Loyola’s total budget.
Credit rating business of Moody's Corporation, Moody’s Investors Services, has
further stated in its January 2013 report that 18% of private and 15% of public
universities across the US are anticipating a decline in their net tuition revenue
for the fiscal year (FY) 2013 — because of decreased enrollment.
Moody’s has also stated that a third of private and public universities anticipate
a less than 2% growth or even a decline in their revenues in FY 2013. Since the
growth rate will be less than the inflation, the universities might find it difficult to
operate, and will have to go for cost cutting. The situation will be worse than the
one before the global financial crisis in 2008 — when only 11% of private and 9%
of public universities had a growth rate of less than 2%.
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6. Decline in the US College Enrollment
R EASONS BEHIND DECREASING COLLEGE ENROLLMENT
There are several reasons behind the decrease in college enrollment. The
enrollment decrease in 2012, as depicted by the US Census Bureau statistics, was
primarily due to decrease in adult education enrollment.
However, the decrease that the colleges and universities are witnessing at
present, is also due improvement in economy, decrease in number of high school
graduates, and high cost of financing education through student loans.
D ECREASE
IN ADUL T EDUCA TION ENROLLMENT
Primary reason behind decline in college enrollment is the decrease in adult
education enrollment. As per the US Census Bureau statistics, 89.7% of the total
decline was caused by decreased enrollment by the age group 25 years and
above. Enrollment by the group has reduced by 419,000 from 2011 to 2012.
F IGURE 2: D ECLINE IN COLLEGE ENROLLMENT — S TUDENTS ABOVE AND BELOW 25 YEARS OF AGE — 2011–2012
Below 25 Years,
10.3%
25 Years and
above, 89.7%
Source: US Census Bureau; Indalytics Advisors
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7. Decline in the US College Enrollment
F IGURE 3: C OLLEGE ENROLLMENT GROWTH RATE 2011–2012 (%)
55 years old and over
-11%
45 to 54 years old
-1%
35 to 44 years old
-17%
30 to 34 years old
-7%
25 to 29 years old -53%
22 to 24 years old
2%
20 and 21 years old
22%
18 and 19 years old
-49%
16 and 17 years old
9%
14 and 15 years old
4%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
Source: US Census Bureau; Indalytics Advisors
Majority of the enrollment decline (53%) was caused by the age group 25 — 29.
It was followed by 49% decline by the age group 18 — 19, which represents the
undergraduate education.
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8. Decline in the US College Enrollment
I MPROVEMENT
OF ECONOMY
Another reason behind the decline in college enrollment is the improvement in
the US economic and employment conditions. With the improved job
opportunities, the nontraditional students are choosing employment against
higher education.
As depicted in the figure below, college enrollment growth rate has a strong
negative correlation with GDP (gross domestic product) growth rate, and
employment growth rate. It implies that improvement in GDP and employment
is associated with decline in college enrollment.
F IGURE 4: R ELATIONSHIP BETWEEN COLLEGE ENROLLMENT , GDP, AND EMPLOYMENT IN THE US — 2008–2012
8%
6%
4%
2%
0%
2008
2009
2010
2011
2012
-2%
-4%
-6%
College Enrollment Growth Rate (%)
GDP Growth Rate (%)
Employment Growth Rate (%)
Source: US Census Bureau; International Monetary Fund; Indalytics Advisors
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9. Decline in the US College Enrollment
T ABLE 1: C ORRELATION COEFFICIENT BETWEEN C OLLEGE E NROLLMENT G ROWTH R ATE (%), GDP G ROWTH R ATE (%),
E MPLOYMENT G ROWTH R ATE (%)
AND
College Enrollment Growth Rate (%)
GDP Growth Rate (%)
-0.86
Employment Growth Rate (%)
-0.94
Source: US Census Bureau; International Monetary Fund; Indalytics Advisors
F ALLING
NUMBER OF HIGH SCHOOL GRADUA TES
US is witnessing decrease in number of high school graduates. As per the data by
National Center for Education Statistics, number of high school graduates is
expected to decrease by 0.3%, from 3.4 million in 2011 to 3.39 million in 2012.
The number is further expected to reduce at a negative compound annual growth
rate of 0.85% from 2012 to 2015, reaching 3.31 million.
Decrease in high school graduates will in turn decrease the number of applicants
and enrollment at colleges.
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10. Decline in the US College Enrollment
F IGURE 5: H IGH S CHOOL GRADUATES IN THE US — 2008–2012 ( MILLIONS )
3.40
3.39
3.38
3.38
3.35
3.31
3.31
2008
2009
2010
2011 (E)
2012 (E)
2013 (E)
2014 (F)
3.31
2015 (F)
High School Graduates (millions)
Source: National Center for Education Statistics; Indalytics Advisors
H IGH
COST OF FINANCING
College enrollment is also decreasing, as high cost of financing is deterring
students to enroll in higher education. US currently has more than US$1 trillion
worth of student loans — which is facing an increase in default rate.
As per the latest data by the US Department of Education, released on September
30, 2013, there have been more than 475,000 defaults, by the borrowers in two–
year cohort — whose loan repayments started in the FY 2011, and they defaulted
before September 30, 2012.
Similarly, in the three–year cohort — where first payments began in the FY 2010
and defaults started before September 30, 2012 — out of more than 4 million
borrowers, approximately 600,000 defaulted.
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11. Decline in the US College Enrollment
Increasing cost of higher education, along with initiatives to check the defaults is
making it difficult for students to enroll in colleges. The financing is expected to
become tougher in future, as some federal laws have also raised the bar for
students to qualify for educational loans. The federal Parent PLUS loan program,
which allows parents, instead of students, to take on debt to pay for their
children's education — has tightened the qualifications an instituted credit
checks.
However, there is some respite from the government to reduce the burden.
President Barack Obama, in August 2013, has signed a new law, which will reduce
interest rates on student loans. The law ties the loan’s interest rates to the
market, and locks it for whole of the tenure. For the forthcoming academic year,
the loans will be available for undergraduate studies at 3.86%, and for
postgraduate studies at 5.41%
President Obama is also stressing on college affordability since 2012. He has
recommended a college rating system, which would help students analyze
various colleges, in terms of return on their tuition dollars.
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12. Decline in the US College Enrollment
H OW ARE COLLEGES IMPROVING THEIR ENROLLMENT ?
Colleges and universities across the US are adopting several approaches to
improve their enrollment. The approaches range from reducing tuition fee to
using analytics and research, and communicating their value proposition to
students in unique and innovative ways. Some of the approaches being followed
by colleges and universities in improving their enrollment are as follows:
R EDUCING T UITION F EES
In order to attract students, several colleges are reducing their tuition fee.
Illinois–based private liberal arts college, Lincoln College has reduced its tuition
fee to attract more students. Similarly, Minnesota–based Concordia University
has reduced its tuition fee by US$10,000, and South Carolina–based Converse
College is planning to reduce its tuition fee by 43%.
University of Iowa College of Law is also reducing its tuition for nonresident Juris
Doctor applicants in the fall of 2014, from US$47,252 to US$39,500. In order to
compensate for the reduction, the college is also planning to undertake several
cost cutting measures, which can improve its bottom–line.
However, the exact correlation between reduction in tuition fee and
improvement in enrollment cannot be determined. As per Moody’s some private
colleges have witnessed an increase in applications when they increased tuition
fee — as students and their parents’ equated higher prices with quality.
Though reducing tuition fee might help colleges and universities to increase their
enrollment rate, it might also lead to the problem of maintaining intake quality.
The institutions will have to keep a check on their cut–off point in applications,
which might reduce the average ACT and SAT scores.
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13. Decline in the US College Enrollment
R EACHING
OUT TO SCHOOL STUDENTS
Another effective enrollment method being followed by the higher education
institutions is reaching out to prospective students, while they are still in schools.
It helps the higher education institution to create an image and brand among the
students, and interact with them while they are in college. The process helps
through brand recall, when students apply for undergraduate courses.
Texas A&M University’s College of Geosciences runs its Fall Weekend Program —
iGeo — to bring its prospective students closer to the college, and create an
interest for geology among them. The three–day program invites high school
juniors and seniors from under–represented communities to explore educational
opportunities in the field of geosciences. Under the program, participants live on
Texas A&M campus, attend classes, and group activities, and tour the College of
Geosciences. They are also mentored by university professors on various career
choices. The program is sponsored by Texas A&M University’s College of
Geosciences, and Minority Recruitment and Retention Leadership Team — and is
effectively helping the college increase the enrollment and retention levels of
highly qualified black and Hispanic students.
The University of Texas at Tyler is planning to reach out to school students and
connect with them, before they are ready for college. The University agreed to a
memorandum with Waxahachie Independent School District in Texas, to provide
dual credit courses — also known as advance–credit programs (ACP) — to
Waxahachie Global High School students in science, math, engineering and
technology. The courses help students to obtain both high school and college
credit at the same time, thereby saving their time.
The University is further collaborating with several community colleges to enroll
their students. It has partnerships with Houston Community College and San
Jacinto Community College — wherein students, after earning an associate
degree, can join the UT Tyler Houston Engineering Center or the Tyler campus,
and earn a Bachelor of Science degree.
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14. Decline in the US College Enrollment
University of Missouri–St. Louis (UMSL) is also running similar advance–credit
programs. The dual–credit courses, which are taken by high–school students,
helps the university in connecting with them, and further attracting them to the
university. Besides the courses, UMSL also provides a US$12,000 scholarship to
ACP students, who enroll in UMSL full–time after high school graduation. The
university’s Advanced Credit Program has helped in approximately 25% increase
in enrollment since 2008.
Several universities, such as Brown University, Duke University, Georgetown
University, Ouachita Baptist University, and the University of Pennsylvania have
partnered with KIPP (Knowledge Is Power Program) — a network of openenrollment, college-preparatory public charter schools — to interact with
students at school level, and enroll them into full–time courses. The universities
connect with students at school level, and provide them the required mentoring,
support, and financial assistance, long with an opportunity to enroll for higher
education.
C OMMUNICA TING
VALUE PROPOS ITION TO S TUDEN TS
Universities and colleges are reaching out to students with customized solutions
and propositions, to enroll them. There are also several service providers that
help colleges in communicating their messages in a better way.
Student Aid Services, Inc. — a subsidiary of Rezolve Group, Inc. — is one such
company that provides customized information booklets, fee calculators and
planners, enrollment prospectus, and other solutions to prospective student, on
behalf of its clients. The customized solutions help prospective students in
assessing the college and enrolling in it. The company caters to more than 700
campuses, which use its products and services.
Besides customized prospectus, colleges are also finding text messages as an
effective enrollment tool. Research scholars at Harvard University — Benjamin L.
Castleman and Lindsay C. Page — have conducted experiments to use text
messages for increasing enrollment.
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15. Decline in the US College Enrollment
The scholars selected students who have applied for colleges, and communicated
with them through text messages. The messages included information on tasks
that students had to complete, such as required paperwork, details about
colleges, meetings with counsellors, and introduction to peer–mentor groups.
The cost–effective trials helped scholars increase student enrollment rates. As
per the paper submitted by the scholars in April 2013, students in the experiment
group — who received the messages — were found to be 7.1 percentage points
more likely to attend college, than the ones in the control group.
Another effective way of approaching students is use of recruiting companies.
The University of Texas at Tyler is investing in student recruitment activities to
enroll more students. The university, which has witnessed a 9.6% increase in
enrollment from fall 2012 to fall 2013, is using student recruitment to attract
national, as well as international students. The recruitment activity has helped
the university attract students from Houston, the fourth most populated city in
the US.
Rather than going the traditional ways, some higher education institutions are
creating their own unique selling propositions. Louisiana State University at
Alexandria (LSUA) and Louisiana College (LC) are using athletics to attract new
students. Both the university and college have sports teams, and are encouraging
more participation through sports scholarships. This attracts students — who
want to continue their sports and athletic career beyond schools — to enroll for
higher education courses at LSUA and LC.
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16. Decline in the US College Enrollment
U SE
OF ANALYTICS AN D RESEARCH
Educational institutions are doing analytics and research to understand decision
making among students, and predict enrollment. The processes involve defining
and studying patterns in the process of course and college selection by the
students.
The University of Maine is using data–mining software — that tracks visitor
activities on the university’s websites. The data helps the university to follow–up
with leads, and send them personalized letters that reflect their interests. This is
followed by university’s recruiters that promote it in college fairs.
Economists are also promoting use of data and research in the enrollment
process. Stanford University economist — Caroline M. Hoxby — has proposed a
national plan, aimed at encouraging deserving, low-income students to apply to
and attend selective colleges. The plan, proposed in June 2013, recommends
providing targeted and customized information about the college application and
selection processes to low–income students, and help them attend an institution,
which they are qualified for.
The plan also calls for various other initiatives, such as partnerships with the
College Board and ACT, and providing researchers with better access to data. The
proposed plan is based on the Expanding College Opportunities (ECO) Project,
and also has inputs from Dr. Sarah Turner of the University of Virginia.
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17. Decline in the US College Enrollment
L IST OF ORGANIZATIONS MENTIONED IN THE REPORT
ACT
Rezolve Group, Inc.
Arkansas State University at Jonesboro
San Jacinto Community College
Brown University
Stanford University
College Board
State University at Arkadelphia
College of Geosciences - Texas A&M
Student Aid Services, Inc.
Concordia University
Texas A&M University
Duke University
University of Arkansas at Fort Smith
Georgetown University
University of Arkansas at Little Rock
Harvard University
University of Arkansas at Monticello
Houston Community College
University of Arkansas at Pine Bluff
Knowledge Is Power Program
University of Iowa College of Law
Lincoln College
University of Maine
Louisiana College
University of Missouri–St. Louis
Louisiana State University at Alexandria
University of Pennsylvania
Loyola University
University of Texas at Tyler
Moody’s Investors Services
University of Virginia
Moody's Corporation
UT Tyler Houston Engineering Center
Ouachita Baptist University
Waxahachie Global High School
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18. Decline in the US College Enrollment
D ISCLAIMER
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without the prior permission of the publisher, Indalytics Advisors Private Limited.
The information contained in this report is of a general nature and is not intended to
address any particular individual or entity’s circumstances. Although proper care has been
taken to provide accurate and timely information, there can be no guarantee that such
information is accurate as of the date it is received or that it will continue to be accurate
in the future. The publisher should not be held liable for any discrepancy in the
information. No one should act upon such information without appropriate professional
advice after a thorough examination of the particular situation.
Publication Volume: GCIX-13-US–03
Publication Date – November 2013
© 2013 Indalytics Advisors Private Limited
For further information, please contact info@indalytics.com
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19. Decline in the US College Enrollment
N OTES
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