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Undergraduate degree earners declined for the first time in a decade last year. Experts say it’s a trend that’s likely to continue.

Chad Baker/Jason Reed/Ryan McVay/Photodisc/Getty Images

The number of students who earned undergraduate degrees fell by 1.6 percent last year, reversing nearly a decade of steady growth, according to a new report from the National Student Clearinghouse Research Center. An “unprecedented” one-year loss in first-time degree earners drove the decline, the report said.

Associate degree earners experienced the steepest drop, at 7.6 percent, though that rate had been falling for several years, according to previous NSCRC data. The number of bachelor’s degree earners fell by 2.4 percent, the first drop in a decade. The number of first-time certificate earners, meanwhile, rose by 9 percent.

The number of students who earned a bachelor’s degree after having earned an associate degree fell by 2.5 percent, leading to the first drop in a decade of graduates who already have another degree—a 0.8 percent decrease.

Doug Shapiro, executive director of the NSCRC, said that in some ways the data was expected after three years of declining enrollment during the COVID-19 pandemic. While enrollments fell by a staggering 5 percent from spring 2020 to fall 2021, there was no real change in degree completion; it’s only logical that smaller classes would yield fewer graduates, he said.

Shapiro added that while he couldn’t predict the more distant future, higher ed is likely facing a few more years of declines in undergraduate degree earners.

“Those enrollment declines are having a delayed effect on the number of graduates,” he said. “Next year we have even more reason to suspect the numbers will go down, since we’re now further along in the education pathway of the students who were part of those declining matriculating classes.”

But is this downturn a temporary setback—simply more fallout from the disruption of the pandemic? Or does it mark the beginning of a lasting trend?

Sean Gallagher, executive director of Northeastern University’s Center for the Future of Higher Education and Talent Strategy, said the data are the result of a number of long-gestating changes to the higher ed landscape: shifting demographics, growing skepticism of the value of a degree and the rise of short-term and alternative credentials. The pandemic exacerbated those trends, he said, but they were already clearly visible.

“There are factors that have been leading us here for many years now,” he said. “We’re going to be looking at a new landscape for higher education, and right now we’re in the middle of that transition.”

Strong Job Markets, Weak Confidence in Degrees

The steepest decline in completion across degree types, the NSCRC report found, was among older or adult learners. Degree earners aged 25 and up dropped by 4.1 percent, compared with a 1 percent decline for 18- to 25-year-olds.

Shapiro said that gap “seems to suggest that the labor market is playing a big role” in influencing students’ decisions to forgo or abandon degree programs in favor of full-time employment.

Gallagher agreed and said a robust job market combined with growing public skepticism over the economic value of a traditional higher ed degree—four-year as well as two-year—is leading more high school graduates to enter the workforce rather than go straight to college.

“The number of high schoolers going directly to college—and I think that is what is driving a lot of this—are dramatically down nationally, and in many states by more than 10 percentage points,” he said. “Meanwhile, this is the best market in 50 years for non-college-level jobs.”

That may also be contributing to the crisis at two-year colleges.

“Once students finish high school, they usually want to enter some kind of credential program to put them on a career path,” said John Fink, senior research associate at the Community College Research Center of Teachers College at Columbia University. “But once you get out of that range and folks are in their mid-20s and working, it’s a lot harder for them to go back to school; there are a lot more sacrifices they have to make.”

a graph showing the overall decline in undergraduate credential earners in 2021-22.First-time associate degree earners fell by almost 57,000 students—more than any other degree type; 25- to 29-year-olds also made up the largest decline in that sector, at 12.8 percent. That aligns with the steep drop in community college enrollments over the past decade, culminating in a 10 percent decline in 2020, a drop-off that continued throughout the pandemic.

“It’s not just an enrollment and completion crisis for community colleges,” Fink said. “It’s an educational access crisis for communities.”

Fink said 58 percent of all credentials awarded by community colleges are associate degrees, but it’s increasingly difficult to make a strong case for their value. Transfers from two- to four-year degree programs, for instance, have been on the decline for years; during the pandemic they fell by over 14 percent.

“When there’s no clear pathway to transfer, sometimes the case for an associate degree is too abstract, especially compared to short-term credential programs with more tangible employment outcomes,” Fink said. “This data really drives home, for me, the importance of having a clear endgame for associate degree programs.”

Certificates Rise to Fill the Gap

The only area of increase the NSCRC report found was in the number of first-time certificate earners, which saw a 9 percent boost. Shapiro, Gallagher and Fink all agreed that this was likely due to the specific circumstances of the pandemic.

“There could very well be students who might have started out seeking an associate degree and, given the circumstances of the pandemic and the economy, decided to leave school earlier with a certificate,” Shapiro said.

Though not included in the NSCRC report data, the rise of nondegree certificates—both paid programs like those offered by Google and free massive open online courses—may also play a role in the decline in traditional degree earners.

“We don’t have reliable data on nondegree credentials … but if you look at the two trend lines side by side, even though alternative credentials are a small share of the market, they’ve grown to be big enough that I think it has to account for some of the decline in degree earning,” Gallagher said.

Lisa Gevelber, the founder of Grow With Google, Google’s training and certificates program, said her company has grown by hundreds of thousands of students since the start of the pandemic.

While she sees nondegree credential providers like hers as partners—rather than competitors—of degree programs, Gevelber said the drop in traditional degree earners may create opportunity for a more diverse array of credentials that employers can trust—and, potentially, a more affordable and equitable way to increase prospects in the job market.

“It’s not an ‘or,’ it’s an ‘and,’” she said. “Getting a degree can be life-changing, but it shouldn’t be the only way to change your life.”

Shapiro said he finds the NSCRC report somewhat troubling—not just for higher ed institutions, but for state workforce development and national educational goals.

“Since the early days of the Obama administration, we’ve been pursuing the goal of producing more Americans with higher education credentials of some kind, and for a decade those numbers kept rising,” he said. “Now, we’re slowing down our progress.”

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