When the financial crisis of 2008 hit, one consequence was a signal to people to have fewer or even no kids. As a result, the birth rate fell precipitously from 2008 to 2011. This means that in approximately 18 years, roughly 2025-2029, there will be comparatively few kids reaching college age.
Although there will be far fewer kids applying to college, not all schools will be affected to the same extent. Elite schools, for example, are projected to be 14 percent more in demand by 2029 than they were in 2012. But regional four-year institutions are expected to lose approximately 11 percent of their students by 2029. The Northeast is expected to be the hardest hit, while mountain states are expected to see slight increases in student demand.
Elite colleges may be less affected by the dearth of births because they have fewer than 200,000 students and have benefited from the explosion in college education since the 1980s. One reason is that Asian-Americans have given a leg-up to elite schools. “They have a high attachment to higher education in general and elite higher education in particular,” Nathan Grawe, an economist at Carleton College in Minnesota, told the Hechinger Report.
One reason the Northeast will be affected more than other parts of the county is that birth rates are lower in the Northeast. A possible explanation is that the Northeast has a smaller Latino population, and Latinos historically have had the highest fertility rates among U.S. racial and ethnic groups. The lower number of applicants for college may be good news for those currently in fifth grade and younger as colleges will fight more fiercely for their attendance.
“Students are going to be a hot commodity, a scarce resource,” Grawe said. “It’s going to be harder during this period for institutions to aggressively increase tuition. It may be a time period when it’s a little easier on parents and students who are negotiating over the financial aid package.”
Many colleges most likely will be working with leaner budgets and be forced to cut liberal arts courses and expand professional programs, such as law enforcement, that students feel will translate to higher-paying jobs. And, most likely, some colleges won’t even make it. Many private institutions may be forced to close while public colleges may find themselves hard-pressed to gain their requisite funding amid declining enrollments.
Potentially wrong predictions
The predictions for the diminution of college applicants for the years of 2025 to 2029 may well turn out to be wrong, however. After all, economists predicted a similar drop in the 1980s following the baby boomer generation. Instead, the opposite happened, and the college enrollment rate skyrocketed. As a result of more women attending school and more people returning to school after finding they couldn’t get a good job with just a high school diploma anymore, a crisis was averted. This bullet-dodging could again occur. For example, the Latino population applying to school could surge, but Grawe said he believes it would be a risky strategy to cross our fingers and “hope this demographic slump goes away.”
One unexpected result of the 2008 economic crisis is a potential shortfall in college applicants in 2025. This dearth of applicants likely will affect regional and state schools disproportionately. If it occurs, it may be a boon for those currently in fifth grade or younger as there will be less competition for acceptances and for aid. On the other hand, the prediction for diminution in applicants may turn out to be wrong as it was in the 1980s. Only time will tell.
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