US colleges face a prolonged enrollment decline beginning this fall as high school graduating classes shrink for the first time since the Great Recession. The incoming freshman class marks the start of a 13% drop in high school graduates through 2041, falling from 3.9 million to 3.4 million students. The decline stems from reduced birth rates during the 2008 financial crisis and subsequent years.
Regional four-year institutions in the Northeast and Midwest states face potential applicant pool contractions of 15% or more. Small liberal arts colleges, comprising 40% of the higher education market, are particularly vulnerable. 40% of private colleges posted financial losses in 2023. Top-ranked schools in the US News top 50 are expected to experience minimal impact due to sustained national demand for limited seats.
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