A survey released last month by the credit ratings agency Moody’s Investors Service stated that out of responses generated from 515 universities, roughly half expect a decline in full-time student enrollments in the near future. According to the survey, one-third of the universities expect decreased or stagnant tuition revenues.
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“The cumulative effects of years of depressed family income and net worth, as well as uncertain job prospects for many recent graduates, are combining to soften student market demand at current tuition prices,” said Moody’s Analyst Emily Schwarz, lead author of the survey’s report.
And the Northeast may be especially at risk, according to Jason Lane, director of education studies at the Rockefeller Institute.
“The Northeast has more public and private colleges than anywhere in the country, and is dealing with factors such as an aging population, lack of jobs and less young people having children. There’s simply less pull to that part of the country now,” he said.
Lane cited the potential drop in high school graduates as a major factor.
A recent report by the Western Interstate Commission for Higher Education, titled “Knocking at the College Door,” suggests that the national number of high school graduates peaked at 3.4 million with the 2011 graduates, and will decrease to between 3.2 and 3.3 million graduates until fall 2020, after which the number of graduates will rise again, but remain under the 2011 high.
The Northeast, in particular, is predicted to be hardest hit, with the number of high school graduates decreasing by 10 percent between 2009 and 2028.
“Those institutions that don’t learn to adapt to the new reality will likely close doors by the end of the decade,” said Lane in a report.
“Students will face increased competition, funding decreases in higher education will offset tuition and we will see tuition hikes,” he said.
But some state governments are beginning to see higher education as a significant investment in the region’s economy. When the University of Massachusetts system increased its tuition by 4.9 percent in 2012, Gov. Deval Patrick gave the school system a $607 million investment.
Although high school graduates form the traditional pool from which colleges pick, Lane noted how alternate channels, such as heavier focus on recruiting non-traditional students, may provide the necessary revenue.
Lane warns against colleges straying too far from their roots as they begin to reflect the changing times in the coming decade.
“As universities try to adapt, they need to identify who they are and what their mission is,” he said. “Some universities try to be everything to everyone and spread themselves too thin.”
However, according to Lane, the real answer for long-term college investments is investing in its local populace.
“UMass Amherst should focus on really engaging in its community, and continuing to build connections and invest in its community,” said Lane. “The more valuable the Amherst community becomes, the more valuable its university will become.”
Chris Kornichuk can be reached at ckornich@student.umass.edu.