The Higher Education Enrollment Cliff Is Coming Into View

The U.S. is fast approaching the period forecasted to bring a major demographic shift—a decline in college-age populations that could dramatically alter the landscape of higher education.

Coined the “enrollment cliff” by economist Nathan Grawe, this drop is projected to hit hardest from 2025 to 2030, though certain areas are already feeling the impact.

While some experts debate whether the enrollment drop will resemble a steep cliff or a gradual slope, the implications are the same: a shrinking student base that puts pressure on colleges and universities to adapt.

From rethinking enrollment strategies to pursuing new student markets and investing in flexible learning formats, institutions nationwide are finding innovative solutions to weather this storm.

In this article, we examine the enrollment cliff’s impact on institutions, explore the financial and structural challenges it brings, and highlight actionable strategies for staying competitive in a shifting landscape.

Enrollment Headwinds: Institutions Feeling the Brunt

The U.S. higher education sector is beginning to feel the brunt of a steady decline in enrollment, a trend underscored by recent data. Just this past year, the sector contracted by 2 percent, according to a report from Inside Higher Ed, highlighting a widespread challenge that has been building over the last decade.

According to the National Center for Education Statistics (NCES), undergraduate enrollment in degree-granting postsecondary institutions decreased by 15 percent between fall 2010 and fall 2021, with 42 percent of this decline occurring during the pandemic.

While some anticipated a post-pandemic rebound, traditional undergraduate enrollment has continued to fall, with first-time freshman enrollment dropping by approximately 5% in the 2023–2024 academic year.

However, the impact of these declines has not been uniform. Community colleges have been hit hardest, with enrollment dropping from 7 million in fall 2010 to 4.5 million in fall 2022, according to data from the National Student Clearinghouse Research Center (NSC).

By contrast, some highly selective private institutions have managed to maintain or even grow enrollment by leveraging strong reputations and robust financial aid packages.

Declines Creating Disparities

These shifts are also creating disparities that could shape the economic future of entire demographics. Young men are opting out of college at much higher rates than their female peers, leaving roughly one million fewer men aged 18 to 24 in college today than in 2011.

Black students, too, are attending college in diminishing numbers, with freshman enrollment for Black students down 6.5 percent in 2022 alone—a figure that adds to an 18.7 percent decrease since 2020.

Moreover, according to the NSC, recent declines in freshman enrollment are most significant at four-year colleges that serve low-income students.

The Financial Consequences of the Enrollment Cliff

The enrollment cliff isn’t just a demographic issue—it’s a direct challenge to the financial and structural stability of colleges and universities nationwide.

As fewer students enroll, many institutions face a stark reality: dwindling tuition revenue that can no longer sustain their programs, facilities, and faculty.

This financial strain is particularly acute for small, private colleges and regional public institutions, which rely heavily on tuition and state funding that fluctuates with enrollment numbers.

Closures and Mergers

For many, closures have become an unavoidable consequence. Since 2016, over 100 small, private colleges have closed their doors, and analysts predict this trend will accelerate.

“The hardest-hit institutions are often those with limited endowment resources to cushion revenue shortfalls,” notes Phillip Stahle, Director of Strategic Growth, Evidence In Motion (EIM). “Small liberal arts colleges and for-profit schools are feeling the impact of declining enrollments most acutely.”

Large universities, while more buffered, are not immune. Some are restructuring to avoid outright closures, with mergers emerging as a favored strategy for sustaining operations while cutting costs. High-profile examples include mergers in Pennsylvania’s state system, where institutions are consolidating to streamline resources and ensure financial stability.

Program Cuts

Beyond closures and mergers, program cuts are also reshaping the academic landscape. Nonprofit and public universities alike are re-evaluating their offerings, reducing programs and laying off faculty to reduce budget shortfalls.

For some, the decision to cut programs is driven by market data and student demand; for others, it’s a desperate attempt to keep financial losses at bay.

This shift poses a new set of challenges for institutions committed to comprehensive education, as they struggle to balance financial viability with educational values.

New Funding Sources

For large public institutions, particularly in states facing budget constraints, the enrollment cliff could mean an even greater reliance on private funding sources and tuition hikes.

Meanwhile, for-profit colleges, which were already grappling with reputational challenges, may find it increasingly difficult to attract students in a shrinking pool.

In response to these pressures, some for-profit institutions are seeking to transition to nonprofit status to remain competitive and address financial challenges. Grand Canyon University (GCU) has been at the forefront of this effort.

Recently, the U.S. Court of Appeals for the Ninth Circuit ruled in favor of GCU, stating that the U.S. Department of Education had applied the wrong legal standard in denying the university's nonprofit status.

Solutions for Navigating the Enrollment Cliff

As the enrollment cliff looms, institutions that actively define and reinforce their competitive positioning stand the best chance of thriving.

“In today’s crowded marketplace, colleges and universities must stand out by offering programs that are relevant, adaptive, and value-driven,” Stahle says. “Meeting the evolving demands of students and the workforce is essential for long-term success.”

Below are three strategies that can help institutions stay competitive.

1. Flexible, Accelerated Formats

To attract today’s students—many of whom are balancing work, family, and other obligations—institutions are increasingly offering flexible, accelerated program formats. These formats allow students to complete degrees faster, often at a lower cost, and provide online or hybrid options to support diverse schedules.

Studies indicate that students are more likely to enroll in programs that offer flexibility. According to the NCES, the percentage of undergraduate students enrolled exclusively in distance education courses increased from 15% in 2019 to 28% in 2021.

This shift toward online learning, accelerated by the pandemic, has continued even as campuses reopened. Recent reports show that demand for flexible, hybrid, and online options remains high, suggesting that students now view these formats not as temporary alternatives but as preferred choices for balancing education with other commitments.

For example, institutions such as Penn State World Campus, Western Governors University (WGU), and the University of Maryland Global Campus (UMGC) have effectively adopted flexible learning formats to cater to working adults and nontraditional students.

Penn State World Campus experienced a 1.5% increase in overall enrollment in 2024, adding 210 students, indicating the growing demand for its online offerings.

2. Aligning with Industry Needs

With a focus on employability, institutions that align curricula with current industry requirements are more appealing to prospective students. This alignment might include partnerships with companies, certifications in high-demand skills, or co-op programs that integrate work experience with academic study.

Fields like health care, data science, and cybersecurity have seen a surge in tailored programs that meet workforce gaps. Underscoring this demand, the U.S. Bureau of Labor Statistics projects health care occupations to account for over 1 in 4 new jobs from 2023 to 2033.

EIM’s partner institutions benefit from this alignment by gaining access to a large network of clinical sites, providing students with hands-on experience and pathways to careers at EIM’s parent company, Confluent Health.

3. Building Community and Lifelong Learning Opportunities

A third approach is cultivating a lifelong learning community that extends beyond traditional degrees. By offering microcredentials, upskilling, and continuing education opportunities, institutions can attract not only new students but also alumni and professionals seeking career advancement or skill refreshment.

“This philosophy is central to EIM’s approach,” explains Adriaan Louw, Executive VP for Academic Innovation. “We didn’t stop at degrees; we developed a robust post-professional side, offering ongoing education for health care providers for 25 years. We’re uniquely positioned to support both students and practicing professionals as they advance their skills.”

According to a recent Gallup-Lumina Foundation report, over 45% of U.S. adults expressed interest in enrolling in courses that enhance specific skills, particularly if programs lead to industry-recognized credentials.

Final Thoughts

There’s no single storyline that captures what lies ahead for college enrollment. Institutions across the country, each with distinct sizes, missions, and resources, face varied pressures from shifting demographics and economic realities.

The impact won’t be the same everywhere, but the need to adapt is universal. For institutions looking to navigate these changes strategically, understanding your unique position in the market has never been more important.

“As institutions navigate these shifts, understanding and refining a unique strategic position is essential,” Stahle advises. “Taking a closer look at tailored strategies can make all the difference in preparing for the future.”