The Challenges Facing Colleges & Universities (and Their Customers)

by | March 14, 2023

The Challenges Facing Colleges & Universities (and Their Customers)

The Financial Benefits of a College Degree  

Experts agree that a college degree is perhaps the single best, long-term investment a person can make. A person with a college degree is more likely to be employed and earn more, on average,  each year and in total over the course of their career. For example, according to the Bureau of Labor Statistics (2022), workers aged 25+ who have only a high school diploma have the lowest earnings and highest unemployment rates, whereas workers with graduate college degrees have the highest earnings and lowest unemployment rates. Those with a 4-year bachelor’s degree have a 3.5% unemployment rate and earn an average of $69,554 annually – about 66% more than those with only a high school diploma.  

Higher Education is Now Facing Unprecedented Threats  

Today, colleges and universities face unprecedented threats. Let’s examine six of them. 

Threat # 1: Fewer People Desire What Higher Education Has to Offer  

Since 2014, a total of 607 colleges/universities closed or merged (Moore, 2022). In 2018-2019 alone, 236 colleges closed (Moore, 2022). Why? Because “people vote with their feet.”  If what is being offered to the potential customer has little value or costs too much, they will not “buy” it.   

According to Welding (2023), enrollment in U.S. colleges started to decrease in 2010 – a decrease of about 1% per year from 2011 to 2019. The pandemic accelerated things. From 2019-2021, undergraduate enrollment dropped 6.6%. Community colleges were hit very hard and experienced a 13% decline during that same period (NSCRC, 2023). Fall 2022 enrollment estimates indicate that enrollment remains well below pre-pandemic levels. Compared to fall of 2019, enrollment is down about 1.23 million undergraduates.    

Threat # 2: The Approaching Demographic Disaster 

Around the year 2025, U.S. colleges and universities will face another major problem – a demographic cliff that threatens enrollment even further. After 2025, experts project an additional 15% drop in new college enrollments. The number of high school graduates will peak nationally with the class 2025 at about 3.93 million students (Seltzer, 2020). After 2025, projections show that graduating classes will slowly decline in size over the next 12 years, due largely to families having fewer children during the Great Recession of December 2007 to June 2009 (Seltzer, 2020). After 2025, U.S. colleges and universities will be competing for fewer high school graduates. 

Threat # 3:  Missing Male Students (Especially Black American Students)

There has been a tremendous shift in the demographics of college enrollment over the past 70+ years. After World War II, many U.S. soldiers returned home and used the G.I. Bill to attend college. Believe it or not, at one time, male college students outnumbered female college students 2 to 1 (Financial Technology Report, 2022). Over time, however, the number of males enrolled in college has decreased, then flattened, then flipped entirely with women. Soon, twice as many women will be graduating from college as men (Financial Technology Report, 2022).

Males now comprise just 41% of college students, an all-time low. It is even worse for Black American young men. In 2022, Black American men represented only 4.6% of all enrollees in higher education (PNPI, 2022). Furthermore, the rate of college graduation among Black males after six years of enrolling in college is 36% (National Center of Educational Statistics, 2022). In contrast, White males graduate at a rate of 63% in six years. Why the large racial disparity?    

Reasons for the Decrease in Male Students on College Campuses

Some experts say that the lack of males on campus is due to a simple cost-benefit analysis done by men and women when considering college. Typically, women gain more than men by attending college. Men that do not attend college can get relatively “good” jobs in fields like construction or other trades. In contrast, women who do not attend college, often take relatively low-paying, low-skill jobs in fields like retail, custodial, or food service. Other experts believe that boys are simply being left behind and that the trend of low academic achievement among boys begins much sooner – in grade school rather than in college.

Threat # 4: The Racial/Ethnic Disparity in Elementary School Reading   

Perhaps the solution to increasing college enrollment and graduation among Black American males should begin with improving their ability to read in grades K-3. In 2019 (pre-pandemic), on national tests, only 18% of Black 4th-graders scored proficient or above in reading (Wexler, 2020). For Whites, that figure was 45%. For 8th graders, the percentages were 15% and 42% percent (Wexler, 2020). I have heard it said many times that from K-3, kids learn to read and in grades 4 and beyond, kids read to learn.  

The ability to read at proficient levels by the end of 3rd grade extends beyond high school and significantly impacts the trajectory of a young adult’s educational and vocational success. For example, research from the Ohio Department of Education (2005) found that students who read proficiently by the end of 3rd grade were five times more likely to achieve college success and career readiness than their non-proficient peers. Even more proof comes from a University of Chicago study which found that less than 20% of students who were reading below grade level attended college, compared to about a 33% who were reading at grade level, and nearly 60% of students who attended college were reading above grade level. The low percentages for Black American students should outrage anyone who cares about people!   

Threat # 5: The Increased Costs of a College Degree    

Perhaps one of the reasons that enrollment is down is the increased costs of a college education. For the first time in history, parents (and their kids) may be questioning whether the high costs of a college education are worth it. Post-high school education used to be a “ticket” to a middle-class life. However, for many today, the cost of borrowing for college is a lifelong burden that deprives them of that opportunity. 

Since 1990, average tuition and fees at U.S. colleges have increased 130% after adjusting for inflation (Hanson, 2022). The average cost of tuition and fees for public 4-year institutions has risen 179% over the last 20 years for an average annual increase of 9.0% (Hanson, 2022). Between the 2021-2022 and 2022-2023 academic years alone, the cost increased 3.5% for four-year nonprofit colleges (CollegeBoard, 2022).

According to the White House (2022), the total cost of both four-year public and four-year private college has almost tripled since 1980, even after accounting for inflation. Federal support has simply not kept up. Pell Grants once covered nearly 80% of the cost of a four-year public college degree for students from working families. Now Pell Grants cover only a third. Thus, if they want a college degree, many students from low- and middle-income families have no choice but to borrow money. The typical undergraduate student now graduates with $25,000 in debt.  

Reasons for Increased Costs 

Some experts focus on state funding cuts, expanding administrative staff, increasing salaries, and increased facility and construction costs as factors that have contributed to higher college costs over time (Morris, 2023). Others state that excessive regulation, accreditation, and federal subsidies make it difficult for innovative providers of higher education to emerge and offer the kind of competition the market needs to lower tuition costs (Hanson, 2022). Still, others point to colleges overbuilding of campus amenities in an effort to be more attractive to prospects (Cooper, 2020). On the other side of that coin, schools with strong track records and top reputations, have fewer competitors and therefore face less pressure to reduce costs (Cooper 2020).  

Threat # 6: Increasing Student Debt

About 32% of U.S. families need educational loans to pay for a college education today. Most of these families are low to middle-income families (Hanson, 2023). Black American students (73%) are most likely to need student loans compared to other races and among graduate students, Black Americans accumulate debt at 2x the rate of White graduate students (Hanson, 2023). Four years after graduation, 48% of Black borrowers with debt owe more than they originally borrowed compared to 17% of White borrowers (Hanson, 2023). 

Today, student loan debt in the U.S. sits at $1.75 trillion (Hanson, 2023). It is the 2nd highest debt category in the U.S. – only after mortgages. The average federal student loan debt balance is $37,574. This increases to an average of $39,590 if you include students who also have private loans. About 1 in 5 American adults reports debt from their undergraduate years (Hanson, 2023).

Possible Strategies to Face These Challenges

First of all, the primary and secondary educational system of the U.S. needs to be revised to meet the needs of all students. That is not the case now. Those who live in generational poverty are typically brown or black and most often attend urban, public-school districts. These students are being left behind in multiple ways. A greater emphasis must be placed on helping all students become proficient at reading by the 3rd grade.  

Second, students, especially those from urban, public school districts, need more help in completing applications for admission and for financial aid. About 1 in 3 respondents of Princeton’s Hope and Worries Survey (2022) selected this as the most difficult part of college admission.  

Third, the cost of college needs to be reduced. These costs have been increasing much more quickly than wages and inflation for a very long time. No longer can colleges expect families from the lower-to-middle class to mortgage their future for an uncertain outcome. For example, on Princeton’s Hope and Worries Survey (2022), college loan debt has been respondents’ biggest worry for nearly a decade. Twenty years ago, in 2003, the first year of the survey, families and students ranked that as their lowest concern. The truth is that affordability is now a top concern. According to this Princeton study (2022), a majority of high school students are now applying to colleges with lower sticker prices. 

Fourth, colleges will need to focus more on outcomes. The fact is, colleges use an inefficient, outdated “just in case” model and degree programs are based on how long colleges think that students should be taught. The increasing need for reskilling workers caused by automation, the knowledge explosion, and the pandemic will tilt the balance toward educational programs that are closely aligned with the labor market and that provide certificates, micro-credentials, and badges – not degrees (Levine & Van Pelt, 2021). Bottom line – higher education must focus on the outcomes that employers want, students want, and parents want. 

Fifth, institutional control of higher education will decrease and the power of consumers of higher education will increase (Levine & Van Pelt, 2021). The number of content providers has multiplied as the global, digital, knowledge economy has grown. This has given consumers choices over “what,” “where,” “when,” and “how” they consume content. The same will be true of higher education. The digital revolution will put more power in the hands of the consumer who will have greater choice about all aspects of his/her own education.

Sixth, college and universities need to recognize the ubiquitous nature of devices that have access to the Internet. Students want from colleges now the same things they are now getting now from other sources: personalized choices. We see this with music, TV, movies, newspapers, and magazines. College students will seek accessibility and personalized education at any time and at any place (Levine & Van Pelt, 2021). Wherever they are, they will demand it. They want education that fits their circumstances. This means that colleges will have to increasingly unbundle their degree programs and services so that students can purchase what they need or want to buy at prices that are affordable to them (Levine & Van Pelt, 2021). 


A college/university is an expensive operation with a relatively inflexible cost structure. Will those at the top guiding colleges and universities be creative enough to overcome enrollment declines, rising costs, racial/ethnic disparities, student debt, emerging alternatives, and political interference?    

One thing is certain about higher education: things must dramatically change if colleges and universities are to stay in business. To survive, many schools will have to take drastic action, cutting departments, degree programs, and faculty jobs, reducing services, and eliminating activities. Such drastic steps will not be enough to save some colleges and universities. My prediction is that the closers and mergers will continue for the foreseeable future.  

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Dr. Timothy R. Jordan has been a health educator (grades 6-12), Assistant High School Principal, Associate Director of Graduate Medical Education, and a Professor of Public Health. He has 82 peer-reviewed presentations, has personally written $9.5 million worth of grants, and has 90 peer-reviewed conference presentations. His dominant areas of research include end-of-life, death and dying, reducing racial/ethnic health disparities, health equity, health behavior change, chronic disease prevention, and smoking prevention and cessation. He is the founder and the current director of the 1795 Group. 


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Dr. Tim Jordan

Dr. Timothy R. Jordan has been a health educator (grades 6-12), Assistant High School Principal, Associate Director of Graduate Medical Education for a large health care system, and a Professor of Public Health for the past 23 years. His areas of research include end-of-life, reducing racial/ethnic health disparities, health behavior change, chronic disease prevention, and smoking prevention and cessation. He is the founder and the current director of the 1795 Group.

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