A Long Way Down the Demographic Cliff

For years, projected declines in American high school graduates have loomed over the future of higher education. The metaphorical demographic cliff, as it’s been described ad nauseam, undergirds sectorwide fears of massive program cuts, college closures and inadequate workforce capacity.

Next year, that cliff will become more than a metaphor, according to a new report from the Western Interstate Commission for Higher Education. The number of 18-year-old high school graduates will peak in 2025 at around 3.9 million, the report projects, followed by a 15-year decline. By 2041, the number of traditional-age incoming college students will be down 13 percent.

That harsh new reality could be a shock for many higher ed institutions. College closures have been mounting for years, and officials are making drastic cuts to degree programs to counter falling head counts. But even as college enrollments dropped over the past few years, high school graduation rates steadily increased. When graduation rates are also on the decline, how much worse will enrollment trends get?

Patrick Lane, WICHE’s vice president for policy analysis and research, said that will depend on how higher ed leaders and state policymakers respond to the changes.

“Demography need not be destiny,” he said.

The report found that demographic trends will vary by region, but declines are expected across the country. Western states are in for a steeper decline than WICHE previously predicted, a 20 percent drop over 15 years. In the Midwest and Northeast, where the youth population has already been falling for a few years, declines will continue until they reach 16 percent and 17 percent, respectively.

The number of high school graduates will increase in a handful of states, but only a few significantly: Florida can expect a 12 percent positive projection, Idaho and North Dakota 13 percent each, North Carolina 14 percent, and Tennessee 15 percent. Many more are facing steep downturns in college-going demographics: a 17 percent decline in Pennsylvania, 23 percent in Wyoming, 27 percent in New York, a surprising 29 percent in California and a 32 percent decline in Illinois.

The racial makeup of high school graduates will also change substantially by 2041, the report predicts. The number of white students is projected to fall by 26 percent, Black students by 22 percent and Asian/Pacific Islanders by 10 percent. Meanwhile, the number of Hispanic students is projected to grow by 16 percent and multiracial students by 68 percent.

The report is the first to distill the long-term effects of the COVID-19 pandemic on high school graduation rates. While there was a slight dip four years out from students’ first term on Zoom, the impact was more muted than expected.

“It was really not as bad as it could have been,” Lane said. “The decline is within the typical range of fluctuation, and our projections remained relatively stable.”

Cliff, Valley or Gentle Slope?

Nathan Grawe, an economist and professor at Carleton College, is widely credited with coining the term “demographic cliff,” though he isn’t quick to claim credit.

“If I did, I might regret it,” he told Inside Higher Ed.

Grawe, the author of Demographics and the Demand for Higher Education (Johns Hopkins University Press, 2018), worries the image is “too final,” promoting the notion that an enrollment nosedive is inevitable. At the same time, he wouldn’t call it a “valley,” either; that would imply there’s some hope of recovery on the other side, which he said is highly unlikely. He hopes higher ed leaders, families and policymakers confront it as it is: a gradual, if significant, decline in the traditional college-going population.

“People shouldn’t wish away the real challenges of the situation,” he said. “But while resignation is not the right response, neither is fear.”

Some significant enrollment decline is inevitable. The WICHE report projects a 17 percent overall contraction in the total number of 18-year-olds in the U.S. by 2041—a massive decrease. Even if institutions bolster their recruitment of nontraditional students and vary degree offerings, it likely won’t be enough to fill the matriculation gap.

But the drop could be manageable, Grawe said, if higher ed leaders embrace the change rather than reject it. That means putting more resources into retention and persistence efforts and boosting access initiatives to get more high schoolers on a path to college.

“If we choose to continue as if it’s just business as usual, I don’t know how colleges could expect to not see major enrollment declines,” he said. “The good thing about higher education is we have an enormous lead time to try doing things differently—it’s not as if birth rates dropped 17 percent in one year. We just have to choose to put ourselves on a new path.”

‘Hope Is Not a Strategy’

The demographic drop-off could also force institutions to adjust their strategic plans, adapting to a leaner future. Dick Startz, an economics professor at the University of California, Santa Barbara, said that’s likely to be the biggest challenge for institutions.

For decades, colleges have operated according to what Startz called a “growth mindset,” shaping strategic plans and budgets around the promise of ever-expanding student bodies. He said that’s led to inflated budgets and unrealistic expectations, and warned that more and more colleges are going to be in for a rude awakening.

“When you’re planning for growth, you have a lot of flexibility. I don‘t think colleges do a good job planning for decline,” he said. “Running a college will become more difficult in the next decade, and that’s going to put a lot of stress on colleges that are already under tremendous pressure.”

That doesn’t always mean gutting academic programs and instituting wide-reaching layoffs, as institutions like West Virginia University have done in response to a shrinking student body. Lane said he hoped the WICHE report would not be used as “an excuse to start cutting,” but rather that it would prompt institutions to take a hard look at their priorities and square them with reality.

There’s an element of exceptionalism to the problem, Startz said: While the demographic decline has been common knowledge in higher ed for the better part of a decade, rarely is it reflected in institutional planning.

Laura Bloomberg, the president of Cleveland State University, said she’s trying to face those challenges directly and honestly. Her institution has been on the bleeding edge of the country’s demographic decline: In Ohio, the peak number of high school graduates came and went in 2021, and college enrollments have been falling since 2018, according to the Ohio Department of Education.

“You have to be clear-eyed,” she said. “It’s not a matter of simply doing more with less; we’re talking about a much smaller overall footprint.”

Cleveland State has felt the effects of that shrinkage. Last year the university faced a $40 million budget deficit, thanks in part to significant enrollment declines. In August the university offered buyouts to 50 faculty and staff members and laid off 14 more.

Bloomberg said those kinds of cuts are only going to become more common. If she took one lesson away, it’s that unfounded optimism only worsens their impact.

“This is happening all over the country, and that’s because we budgeted based on hope. Hope is great, but it isn’t a strategy,” Bloomberg said. “Some people might call that the tyranny of low expectations. I think it is accepting the demographic reality of the region and focusing on putting our energy where we can make a difference.”

(This article has been updated to correct Dick Startz's place of employment.)