Understand the IT Implications for the Enrollment Cliff
What is IT’s role in this top priority?
- Closures are becoming common due to increased competition, with more prestigious universities attracting students away from the less prestigious.
- Governments are encouraging consolidation between institutions to save costs and support a changing demographic.
- Institutional leadership may not be aware of the technology implications of their strategic initiatives to address the downturn in enrollment.
Our Advice
Critical Insight
The decline in enrollment threatens closure of the institution. IT must align itself with institutional efforts to increase a competitive advantage.
Impact and Result
- Plan for cost reduction both internally through centralization efforts and externally through partnerships with other institutions.
- Assess the external context of your institution; interview key stakeholders on their priorities; and determine how IT can support the competitive advantage of the institution.
Understand the IT Implications for the Enrollment Cliff
Technology's role in the institution's survival.
Analyst Perspective
Support the competitive advantage of the institution.
The enrollment cliff refers to the projected significant decrease in enrollment in higher education institutions in the United States (US), particularly among traditional undergraduate students. The term "cliff" implies a sudden drop-off, which is expected to occur after 2025 or 2026.
This decline is due to several factors, including declining birth rates, increasing tuition costs, and a strong job market that may incentivize young people to enter the workforce instead of pursuing higher education.
The COVID-19 pandemic has also contributed to the enrollment cliff, as it has disrupted many traditional education models and raised concerns about the value of higher education. This decline in enrollment poses a significant financial challenge for colleges and universities that rely on tuition revenue. The risk of closure and consolidation is very real.
Mark Maby
Research Director for Education, Industry Practice
Info-Tech Research Group
Executive Summary
Your ChallengeIn the United States, enrollment is expected to decline due to a lower birth rate. The pandemic has turned students away from higher education and the trend appears to be continuing. Government funding for higher education has been largely flat for the last 20 years and it is dependent upon student numbers. Higher education is entering a period of contraction following years of growth. |
Common ObstaclesClosures are becoming common due to increased competition, with more prestigious universities attracting students away from the less prestigious. Governments are encouraging consolidation between institutions to save costs and support a changing demographic. Institutional leadership may not be aware of the technology implications of their strategic initiatives to address the downturn in enrollment. |
Info-Tech’s ApproachThe IT department needs to be proactive in its response to the enrollment cliff. Plan for cost reduction both internally through centralization efforts and externally through partnerships with other institutions. Assess the external context of your institution. Interview key stakeholders on their priorities. Determine how IT can support the competitive advantage of the institution. |
Info-Tech Insight
The decline in enrollment threatens closure of the institution. IT must align itself with institutional efforts to increase a competitive advantage.
The enrollment cliff is fast approaching in the US
Lower Birth Rate
The enrollment cliff is caused by a drop in the fertility rate, primarily in the US, which is expected to continue to decline by 1–2% per year after 2029 (Copley and Douthett, 2020).
The pivotal year will be 2025, when the number of high school graduates is expected to peak. Institutions will need to have strategies in place to support the demographic change.
The pipeline of 18-year-olds from high school is expected to remain stagnant and then decline in 2028.
Changing Ethnic Demographics
Soon, no single ethnic group will comprise a majority. While non-Hispanic Black and non-Hispanic white 18-year-olds are expected to decline, Asian and Hispanic students are expected to increase in numbers.
The geographic areas of Mountain and West-South-Central United States have the most resilient rates. Other areas are looking at a decline.
Sources: Grawe, “Demographics and the Demand for Higher Education.”; Boeckenstedt, 2022.
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