TWO Demographic Cliffs? The Enrollment Case for Diversifying Revenue Streams

Scott JeffeVice President, Research (Graduate and Online)May 15, 2024

How many times have we all read about the demographic cliff? I wonder if we’ve become desensitized to its implications. Now that the anticipated starting point (2025) is at our doorstep, institutions must be ready. To that end, I’ve been working a white paper (to be published in June) that will lay out more than a dozen strategies that institutions can use to build alternative revenue (student) streams.

But, as I was working on this, I read a story in the Chronicle of Higher Education buried by all the coverage of the FAFSA fiasco that alarmed me. Revised population estimates—the first to be built on the 2020 (rather than the 2010) census data—indicate another demographic cliff in the number of 18-year-olds that will almost immediately follow the first one.

New data show two demographic cliffs

Below we present the original (dotted) and new population data (dashed) in blue and then the U.S. Department of Education (IPEDS) projections for first-year students now, in 2020, and in 2016 in orange. In each set of past projections, the Department of Education was more optimistic than what really happened. The most recent projections (red circle) do not yet account for the revised population data, so the suggested enrollment growth is unlikely, given the new insights the census data offers.  

Chart: Two Demographic Cliffs. Chart showing new enrollment projections with the number of 18-year-olds declining in sharply from 2025-2038, and freshman enrollment remaining flat through 2030
Sources: Actual and Projected College Freshmen: Digest of Education Statistics 2016, 2020, 2022. Estimated Number of 18-Year-Olds: U.S. Census Bureau 2017 estimates, 2023 estimates (first to be based on 2020 census data).
By the Numbers: Net New 18-Year-Olds Percent Change
2026-30:   -329,907 -7.3%
2030-33: 55,523 +1.3%
2033-39:   -375,790 -9.0%
Total Change (2026-39)   -650,174   -15%

Uneven change

Nathan Grawe’s 2018 book, Demographics and the Demand for Higher Education, provides the most comprehensive analysis of what is on the horizon. Among dozens of informative charts and tables, his state level projections of change among “college-going” students (calculated using data on 18-year-olds and the other hypotheses laid out in the book) are among the most important. He states, “When population figures are adjusted for the probability of college-going, the situation looks a bit worse (than just the 18-year old data) in two-thirds of the locations.”

Blog on two demographic cliffs: Image of the US showing growth in college-going students. Most states will see declines except Texas, Montana, Idaho, Wyoming, Utah, Colorado, and South Carolina
Source: Grawe, N. (2018). Demographics and the Demand for Higher Education. Johns Hopkins University Press.

A total of 26 states are projected to see more than 15 percent contraction in college-going students (9 west of the Mississippi, 15 east of the Mississippi including all of New England and most of the Midwestern “rust belt”). Six states will see more than 7.5 percent growth, all in the western half of the country and four of which are almost the states with the smallest total population). Only nine states are projected to see growth. Therefore, enrollment stability (or potential growth) will require institutions to rethink how they attract and enroll students in their programs—or lower their entrance requirements in order to fill their classes.

How can you address the “Two Cliffs” dilemma?

We will be diving into this issue in more detail in a forthcoming white paper where we will offer more than a dozen strategies institutions can implement to diversify their student populations, maximize enrollment among current populations (including traditional undergraduates), and plan for the future.

I also highly recommend attending the 2024 RNL National Conference July 23-25. We have dedicated tracks on undergraduate, graduate, and online enrollment, as well as strategic enrollment planning. Many of these sessions will offer enrollment and revenue strategies that will help keep institutions successful and sustainable in this turbulent environment. See the list of sessions and register before May 20 for the best savings.

You can also schedule a consultation today to talk with an RNL enrollment consultant about the best ways to maximize enrollment among your current student audiences and plan for the future. We will offer additional insights on what is working for other institutions.

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About the Author

Scott Jeffe

Scott Jeffe has worked with more than 200 institutions in 40+ states to apply market data to strategic decisions. With a focus on profiling the demands and preferences of nontraditional (adult, online, etc.) students, Scott...

Read more about Scott's experience and expertise

Reach Scott by e-mail at Scott.Jeffe@RuffaloNL.com.

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