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Enrollments Could Rise While Tuition Revenue Falls, Moody’s Says

June 4, 2020
 
 

Higher education enrollments could increase between 2 and 4 percent in fall 2020, according to a new report by Moody’s Investors Service. The new forecast follows past enrollment trends during economic downturns and recessions.

“The countercyclical nature of enrollment for both traditional-aged and older students typically yields gains when unemployment grows and students seek to broaden their skill set,” a press release said.

But even if enrollment increases, net tuition revenue and other student revenue for the 2021 fiscal year will likely decline between 5 and 13 percent, depending on student demand, affordability and the severity of the economic downturn, the report says.

“Factors such as a potential new wave of the coronavirus and students deferring a year to get the full on-campus experience stand to curb the potential enrollment increases this fall,” Dennis Gephardt, vice president at Moody’s and lead author of the report, said in a statement.

“A blend of varying degrees of student demand and affordability with the weakened economy as a backdrop will drive the drop-off in various revenue sources,” Gephardt wrote.

The report also says that market share will likely shift to favor lower-priced higher education options, like community colleges. For lower-profile, higher-priced colleges that are heavily dependent on tuition revenue, “difficulties will accelerate.”

 

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