How to Survive the Higher Ed Demographic Cliff

The landscape of higher education in the United States is undergoing a significant transformation, and beneath the sensational headlines and political upheavals lies a less glamorous yet potent force: the demographic cliff, also known as the enrollment cliff. This precipitous drop in enrollment is attributed to the decline in birth rates during the Great Recession, culminating in a forthcoming dip in college attendance. Unlike disruptions caused by pandemics or economic downturns, this decline is a consequence of past demographic trends and is poised to impact most universities, excluding the Ivy League institutions, which possess the reputation, alumni networks, and endowments to weather such storms.

For the majority of universities, however, an urgent and strategic plan of action is imperative:

  1. Assess enrollment and financial status for the near and far future. With decreasing budgets, administrators are stretched. Invest in outside counsel who can perform cost-benefit analyses based on past data and future projections.
  2. It’s never too late to enact data governance and management processes. Getting the data in order will lead to quicker and more well-informed future decision making.
  3. Assess internal culture and governance. Does your institution’s Board of Trustees have the leaders it needs to push the university into this new normal? A focus on culture of faculty and staff can lead to higher job satisfaction, leading in turn to more satisfied students.
  4. Take a deep dive into your institution’s value proposition and identity. What are the key programs and initiatives that your institution does better than most? What is your strategic identity that holds you apart from the rest? And who are your biggest cheerleaders? But most importantly: How will you decide which programs to shut down? Gone are the days of small liberal arts colleges which can offer hundreds of programs to small student populations. Stick with what you do best and determine a decision-making process for how programs will be assessed in the future. Sunk costs cannot be the determining factor to continue running failing programs.
  5. Embrace meeting your students where they are—and where they want to be. Enroll students year-round and offer flexibility on how and when a student can complete coursework. Consider offering 2-year degrees and certifications to meet the growing interest in skills-based, non-traditional degree programs.
  6. Get the faculty on board with the new normal. Universities cannot be first and foremost producers of research. While this is an incredibly important function of a university, the research, by and large, does not pay the bills (and large faculty salaries). A high level of customer service must be carried out between faculty, staff, and students.
  7. Bring in more industry experts as clinical faculty and adjuncts. The students are drawn to their real-world experiences, and these business experts are not engaged enough by universities. Create a mechanism to collect their ideas and benefit from their connections.
  8. Invest in alumni relationships and interests. Alumni engagement is time-consuming to do it right, but the benefits are many, beyond fundraising. Involving alumni in the career transition process of students via guest speaking and mentorship opportunities, on top of working with their companies as hiring ambassadors, leads to win-wins for all. A word of warning: Resist the urge to accept donations for short term benefits which have big financial implications for the future. For instance, a $5M or even $10M donation to begin a new college would quickly utilize those funds on administrative, building, and teaching costs. Assess each opportunity rigorously.
  9. Streamline the decision-making mechanism. Universities have always been the epitome of democratic decision-making. However, decisions do not easily get made by committee. While engaging your key stakeholders, take care to identify those who are making strategic decisions on the future of the institution, and rigorously test their motives. Then, give them leeway to make important decisions. Universities are large, bureaucratic institutions, and suffer like no other industry with analysis paralysis.
  10. Bring in outside eyes. Hire transformative business leaders as university leaders. Bring in external analysis and advising capacities to present facts in an objective manner.

Inevitably, the higher education sector will experience disruptions in the years ahead, and not all institutions will survive unless they adapt swiftly. Analogous to how oil companies are transitioning to green energy, higher education institutions must break away from traditional models and engage with their communities as anchor educating institutions, providing value and opportunities for all. Adopting a fresh perspective and establishing a robust internal decision-making process, backed by quality data-driven assessments, will be pivotal for the success of your institution in the near and long-term future.


Cassandra Brown, Director | [email protected]

Cassandra Brown is a director at Econsult Solutions. She has a deep background in higher education, working in various roles with alumni, faculty, and the external business and governance community for 15 years at Drexel University. Ms. Brown received her M.B.A. at Drexel University. Prior to joining ESI, Cassie served as the Executive Director of Drexel University’s Gupta Governance Institute, which encompasses the Center for Corporate Governance and the Center for Nonprofit Governance.

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