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While the Great Recession of 2007 is a chapter that many Americans would prefer to leave behind, its impact continues to resonate, particularly in the realm of demographics. The recession catalyzed a significant decline in birth rates, a trend that has not rebounded since that time.
This decline signals an impending reduction in the number of 18-year-olds entering the higher education system. Given that these young adults constitute a critical demographic for colleges and universities, enrollment figures are anticipated to plummet, leading to potential campus closures.
This article will not only explore the implications of these shifts for students and their families but also address the potential economic challenges that may arise, particularly as the aging baby boomer generation begins to retire, creating workforce shortages.
Meet Brody Scully, a high school junior contemplating his college options. “There’s a lot of pressure on me. I know I must decide on a specific college in the next two years,” he shares. Join us as we attend a college fair where admissions representatives vie for prospective students, and insights come from enrollment experts, economists, and the president of an already shuttered institution.
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TRANSCRIPT
[Kirk] This is College Uncovered. I’m Kirk Carapezza.
[Jon] And I’m Jon Marcus. We begin this new podcast season with a look back at a challenging period in recent history.
[Archival news footage] On Monday, September 15, 2008, Lehman Brothers filed for the largest bankruptcy in U.S. history, marking a turning point that precipitated a global financial crisis. The Dow Jones Industrial Average plummeted more than 500 points.
[Jon] The fallout from the Great Recession commenced in 2008 and sent shockwaves through economies worldwide.
[Archival news footage] At this time, more than two million traditional mortgages were in delinquency, indicating considerable economic distress.
[Jon] While the immediate effects were painful, the subtle long-term consequences may be even more profound, affecting demographics in ways few anticipated.
[Archival news footage] U.S. birth rates fell to the lowest levels seen in 30 years, impacting nearly all demographics of women. Individuals began to reassess their life choices, with many postponing marriage and parenthood during times of economic uncertainty.
[Jon] Economic downturns often lead to decreased birth rates, a significant but overlooked result of the Great Recession nearly 18 years ago. This trend raises concerns about what has been labeled as a demographic cliff.
So, Kirk, can you clarify what this demographic cliff entails?
[Kirk] Absolutely. The demographic cliff represents a sharp decline in the number of traditional-age college students. Experts liken it to tumbling down a mountain with no chance of recovery.
[Jon] The implications of this demographic cliff are the primary focus of this season’s podcast. While there are some unexpected positives for students and their families, the larger repercussions for colleges and the economy are concerning.
[Nicole Smith] We are bracing for a future where it may become increasingly difficult to fill positions that will soon be vacated.
[Wes Butterfield] Many institutions are at a critical juncture, and they’ll need to innovate to survive.
[Rachel Sederberg] Challenges will be felt across every industry and profession, leaving no one unscathed.
[Jon] Those are perspective from experts closely monitoring this emerging crisis, akin to lookouts tracking approaching danger.
[Telephone ringing] What do you see?
Iceberg! Dead ahead!
[Jon] We engage with these metaphors as we navigate this upcoming demographic cliff and its impact.
[Kirk] This is College Uncovered, a partnership between GBH News and The Hechinger Report, shedding light on the realities of higher education. I’m Kirk Carapezza with GBH.
[Jon] And I’m Jon Marcus from The Hechinger Report.
[Kirk] Colleges typically don’t reveal their inner workings, but GBH…
[Jon] …along with The Hechinger Report, is here to demystify those processes.
[Kirk] In our fourth season, we’ll delve into the myriad shifts occurring within higher education today and their implications. Today’s discussion centers on “The Demographic Cliff.”
[Sound from college fair] Welcome, everyone, to the college fair. If you’d like a bag…
[Kirk] To visualize the demographic cliff in action, I attended a national college fair in Edison, New Jersey.
[Sound from college fair] Students, prepare your barcodes for scanning.
[Kirk] Within an expansive convention center, juniors and their families awaited in anticipation before navigating through turnstiles to engage with college representatives.
[Sound from college fair] May I have your scan card so I can collect your information?
[Kirk] The scene resembled speed dating, where colleges actively marketed their offerings.
[Sound from college fair] We’re excited to announce our new College of Business building, which will enhance your educational experience at FSU.
[Kirk] Rows of colleges pressed in on eager students, leading to an apparent imbalance as more institutions participated than students attended.
[Sound from college fair] We are just a short distance from London Heathrow Airport, making it highly accessible for international students.
[Kirk] As the event progressed, attendance began to drop off significantly.
Welcome to a transformed landscape in college admissions.
When attending a fair like this, Brody, what are you specifically seeking?
[Brody Scully] I’m interested in environmental sciences and eco-engineering.
[Kirk] Brody Scully, a junior from West Milford, New Jersey, describes what he seeks in a college: a lively environment where he can be active and perhaps ski, ideally at a smaller institution.
[Brody Scully] A smaller setting works better for me; I learn best in smaller groups.
[Kirk] Is navigating this process leading to anxiety for you?
[Brody Scully] Yes, it’s definitely stressful and time-consuming.
[Kirk] What makes it so challenging?
[Brody Scully] The pressure is immense; I need to pinpoint a college within the next two years.
[Kirk] Luckily for Brody, he is entering college at a time when the admissions landscape is shifting favorably, due to the downturn in birth rates that commenced in 2008. As Jon pointed out earlier, this downturn will lead to fewer applicants. For most institutions outside of the elite tier, acceptance odds are increasing. Currently, public universities accept 80% of applicants, while private colleges extend offers to 70%, a rise nearly 8 percentage points higher than a decade prior.
Brody’s reaction to this revelation was one of surprise and relief.
[Brody Scully] I wasn’t aware of that, and I’m pleased to hear it!
[Kirk] As the fair draws to a close, college representatives, some of whom remain alone at their booths, maintain their optimism in hopes of attracting even one last student.
The reality reveals fierce competition among colleges, presenting students with a landscape increasingly favorable to their needs.
Consider Rider University, which actively seeks to distinguish itself in this crowded marketplace. Representatives focus on presenting the unique qualities and location of the school.
[Susan Makowski] We are a small private institution located in Lawrenceville, New Jersey, just a short drive from Princeton.
[Kirk] Susan Makowski, director of admissions at Rider, has organized this fair for two decades.
It certainly has an energetic feel.
[Susan Makowski] That’s an apt description!
[Kirk] Approximately 300 colleges participated in this event, each paying $700 for booth space. They consider it worthwhile for the chance to connect with nearly 3,000 prospective students while collecting data for follow-ups.
[Sound from college fair] Are you all set? I’m collecting scans…
Yes, I have one.
[Kirk] This year, Makowski informed me that Rider is taking a unique approach.
[Susan Makowski] In a bid to stand out, I reserved two booths to ensure visibility tonight.
[Kirk] So you enhanced your presence.
[Susan Makowski] Yes, that was intentional; I wanted to capture the attention of students who might otherwise overlook us.
[Kirk] Looking ahead into a future shaped by the demographic cliff, Makowski expresses awareness of the impending changes in applicant numbers.
[Susan Makowski] It’s a natural outcome; the demographic cliff is imminent.
[Jon] Kirk, the roots of this issue for colleges trace back to 2008.
[Archival news footage] Financial markets faced severe turmoil, resulting in widespread uncertainty.
[Wes Butterfield] We experienced a profound crisis, and its effects linger today.
[Jon] That’s Wes Butterfield from a consulting firm aiding colleges in student recruitment. He remarks…
[Wes Butterfield] Economic downturns commonly result in declines in birth rates, as individuals reconsider their ability to start families amidst financial concerns. This hesitance can take years to influence student demographics meaningfully.
[Jon] The drop in birth rates that began 18 years ago is poised to culminate in a reduction in the number of students graduating high school and enrolling in college. By 2039, statistics indicate 15% fewer 18-year-olds than currently exist.
This situationaffects higher education significantly. It compounds existing enrollment declines witnessed over the past decade as concerns about the value of a college degree grow alongside a strong job market pulling many graduates directly into employment.
Emily Wadhwani, senior director at Fitch Ratings, oversees assessments of institutions’ financial health.
[Emily Wadhwani] Demand for undergraduate enrollment has notably decreased, reinforcing trends we’ve observed.
[Jon] The pandemic further exacerbated these challenges, and now the demographic cliff looms large.
[Emily Wadhwani] Emerging from the pandemic, institutions face intensified challenges compared to before, particularly as demographic trends have worsened.
[Jon] This is prompting some colleges to shut down. According to Fitch, projections for the higher education sector are grim, with abandoned campuses reflecting this reality.
[Bob Allen] The environment resembles a movie-set college, a sentiment expressed by many who visit.
[Kirk] That’s Bob Allen, the last president of Green Mountain College in Vermont before its closure in 2019. He recalls visiting the now-quiet campus.
[Bob Allen] Be careful in this area; it typically would be well-maintained.
The intimacy of a small school creates familial bonds. While I may not remember every student’s name, I knew most—and they called me Bob, which was appreciated.
[Kirk] Surrounding Allen were the empty dining hall and lodging facilities alongside a deserted swimming pool—a stark reminder of dwindling enrollment.
[Bob Allen] Degrees of popularity have shifted as students increasingly gravitate towards urban centers and away from rural campuses. Poultney is quite a remote locality.
[Kirk] Allen expressed a desire to navigate these grounds with students present.
[Bob Allen] Tours were far more enjoyable with students around.
At its peak, Green Mountain College boasted around 800 students, but that figure dwindled to just over half by the late 2010s, prompting the decision to close.
[Bob Allen] This was one of the toughest tasks I ever endured. To dismantle a 185-year-old institution was incredibly challenging.
Demographics present formidable challenges for all colleges, particularly small rural ones, impacting local economies too. The annual payroll alone was $6 million, creating a substantial economic footprint.
[Jon] Kirk, the demographic cliff foreshadows numerous closures in higher education. This is corroborated by predictions from the Federal Reserve Bank of Philadelphia, which notes that 21 colleges faced potential defaults on their bonds last year—a troubling increase. Here’s Emily Wadhwani again.
[Emily Wadhwani] The rate of college closures has accelerated in recent years, and we anticipate this trend to persist. Most at risk are small, private liberal arts and some religiously affiliated institutions with enrollments under 1,000.
[Jon] It is crucial for prospective students to conduct thorough research on schools beyond just academic programs and athletics; financial health is equally essential.
[Emily Wadhwani] Evaluate the institution’s fundraising capabilities, which often reflect its financial stability and ability to fund scholarships without depending heavily on tuition revenues.
[Jon] We have previously discussed the warning signs of colleges in financial trouble, and resources will be shared in the show notes.
While the closure of colleges brings sadness to students, employees, alumni, and local communities, there are some glimmers of hope for prospective college students and their families.
[Kirk] Indeed, John. This situation reflects a fundamental economic principle: supply and demand. With a diminishing student pool, fewer universities will demand applicants. Consequently, most colleges are easing admission requirements. Furthermore, tuition rates have begun to decline.
[Jon] It’s essential to clarify that college remains a costly endeavor, with some institutions raising costs for housing and dining to offset tuition reductions. However, when adjusted for inflation, tuition increases finally appear to be slowing after years of escalating costs compared to other living expenses.
[Kirk] Correct. Additionally, students may find opportunities to negotiate for financial aid. We provided valuable insights into this process in previous episodes, and links will be available in the show notes as well.
[Jon] Upcoming episodes will delve deeper into the changing admissions landscape, so stay tuned.
[Kirk] There’s promising news for future scholars and their families amidst this challenging scenery. However, we can’t overlook the wider implications for both the economy and society. The impending shortage of graduates with essential skills needed by the workforce looms large, alongside a decrease in the overall number of available workers.
[Jon] This is particularly pressing in light of the baby boomer generation’s retirement wave.
[Rachel Sederberg] The transition is already unfolding, with numerous retirements occurring in recent years.
[Jon] Rachel Sederberg is a senior economist at Lightcast, a labor market analytics firm, highlighting that approximately 10,000 baby boomers reach 65 every day. Sederberg emphasizes the insufficient number of upcoming workers to fill the void left by retiring seniors.
[Rachel Sederberg] The younger generations following the baby boomers are comparably smaller; therefore, they cannot statistically compensate for this decrease.
[Jon] Such shortages are already being felt.
[Rachel Sederberg] Workforces across every sector are dwindling. The need for employees is evident, yet we lack an adequate supply.
[Kirk] To connect the dots, we consulted the Georgetown University Center on Education and the Workforce, which investigates the relationship between education and the economy. Chief Economist Nicole Smith shared her insights.
[Nicole Smith] College leaders might see declining student numbers as a pressing issue, yet as economists, we must also consider the broader economic consequences. Young workers represent a vital resource in our society.
[Kirk] Smith noted that the anticipated decline in traditional college-age students will extend far beyond mere closures.
[Nicole Smith] The number of individuals completing college at a pace which matches the economy’s demand for skilled labor remains insufficient.
[Kirk] This applies not only to bachelor’s degrees but also covers trades and vocational training.
[Nicole Smith] In the coming decade, 72% of all job openings will require some level of education or training beyond high school. Even if a full bachelor’s degree isn’t necessary, individuals will need enhanced qualifications to remain competitive in the labor market.
[Kirk] As we confront the impacts of the demographic cliff, some regions are already experiencing workforce shortages.
[Nicole Smith] Various communities are already feeling the effects, especially rural locations struggling to fill medical professional roles. They’re implementing various incentives to attract healthcare talent. We are already witnessing these trends.
[Jon] As our experts have indicated, the demographic cliff presents a crucial inflection point for higher education, coinciding with growing scrutiny of the value of college and a reduction in high school graduates pursuing further education.
[Kirk] Indeed, and this backdrop is exacerbated by substantial political pressures on our institutions and funding constraints in recent years.
[Jon] Throughout this season, we will explore the far-reaching consequences of this unprecedented phase in higher education, touching on trends in admissions, the diminishing male student population, and the emergence of new training pathways beyond traditional college degrees, among others.
[Kirk] So stay tuned for future episodes aimed at uncovering what colleges and universities may not convey in their curricula.
This is College Uncovered. I’m Kirk Carapezza from GBH.
[Jon] And I’m Jon Marcus from The Hechinger Report.
[Kirk] This episode was produced by Jon Marcus…
[Jon] …and Kirk Carapezza, with editing by Jonathan A. Davis. Our executive editor is Jennifer McKim.
[Kirk] Fact-checking was overseen by Ryan Alderman.
Mixing and sound design were managed by David Goodman and Gary Mott. The theme music and original compositions were created by the college band Left Roman from MIT, alongside selections from the Stony Brook University Orchestra.
Sound effects representing the demographic cliff were provided by James Trayford of the Institute of Cosmology and Gravitation at the University of Portsmouth, England.
Mei He serves as our project manager, and Devin Maverick Robbins leads GBH podcasts.
[Jon] College Uncovered is supported by the Lumina Foundation and produced by GBH News alongside The Hechinger Report, with distribution facilitated by PRX.
Thank you for tuning in.
Further Reading on Topics Discussed in This Episode:
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