February 16, 2021
The COVID-19 pandemic has had a profound impact on college enrollments this fall. Based on preliminary estimates, fall 2020 enrollments were down 2.5 percent, resulting in a rate of decline greater than twice that of 2019, and a net decrease of 400,000 students in higher education. The bulk of the decline was concentrated at the undergraduate level and pushes against the typical pattern of enrollment rates increasing during times of economic downturn.
The decline has been most pronounced at the two extremes: selective four-year universities and public two-year colleges or community colleges. However, media coverage and financial support have been seemingly concentrated on the former, despite the greater demonstrated need of the latter.
As the pandemic raged throughout last spring and summer, intuitions realized that entirely in person fall (2020) classes were simply not possible. Out of nearly 3,000 colleges, only 4 percent offered fully in person classes in fall 2020. Despite the shift to online learning, most institutions did not lower their tuition, and of the handful that did, the average reduction was only around 10–15 percent. This led some incoming students to reevaluate the benefit of enrollment in fall classes. Some felt that the value of online classes would not be equivalent to in person learning, while others experienced financial hardship due to the pandemic and searched for work.
Collectively, this led to a drop in fall enrollments. However, the impact of these deferments will not be the same for all students. Those coming from lower socioeconomic backgrounds are most likely to suffer long-term consequences. Therefore, it’s imperative that more attention is drawn to the plight of these students, and that policy makers work towards increasing protections for these vulnerable groups.
By the Numbers
In early September, decreased enrollments made national headlines, with a focus on elite universities. Many of the nation’s top schools saw first year student enrollment drop by around 20 percent. Many of these students came from higher socioeconomic backgrounds and searched for internships, independent study, and even international travel opportunities. For example, some students organized groups for independent study and lived together in remote areas.
Financially, this resulted in large tuition revenue decreases for elite universities since most of the deferring students received little to no financial aid. While these financial losses are significant, the total number of deferments from selective universities is unlikely to account for more than 2,000 students. What about the other 398,000 students that have forgone enrollment?
Elite universities fall into the broader category of private, nonprofit four-year universities. According to the National Student Clearinghouse Research Center, such universities only saw a 0.1 percent decrease in enrollment in the fall of 2020. In other words, elite universities were the exception to the pattern; their enrollment declines were not representative of patterns at less selective peer intuitions. It also means that gap years for independent study and travel were not representative of most students who deferred in the fall.
By in large, the majority of deferments were among low-income, community college students. Public two-year colleges or community colleges saw a 10.1 percent decrease in enrollment in fall 2020, which is four times greater than the national decrease of 2.5 percent.
The issue is not simply that a lot of students deferred one year; it is that primarily community college students deferred, which has the potential to perpetuate long-run economic inequality.
A typical student at the nation’s most elite universities comes from a median household income that is $168,000–$204,000, which is approximately three and a half times the national average. As a reminder, that’s the median income, which means half of the students come from families making more.
Elite universities also tend to have a white plurality and an average graduation rate around 86 percent. All in all, even if many students defer a year, they are likely to come from financially secure backgrounds and will probably return and graduate from their schools. These universities may have a subpar financial year, but with endowments ranging between $10–$40 billion, they are not in serious danger of closing and could provide additional financial aid to students if they desired to do so.
A typical community college student is very different from one in an elite university. Half of first-generation college students attend community college (compared to 25 percent of students with college educated parents). Thirty-seven percent of community college students come from families with annual incomes under $20,000, and two-thirds of students come from families with incomes under $50,000. First-generation students at community colleges are largely non-white, with only 16 percent being white.
Investing in community colleges has a two-pronged impact. A college degree dramatically expands the economic opportunities of the vulnerable students these institutions serve, and over a lifetime, every dollar invested in community college nets $4.80, resulting in an internal rate of return of 17.8 percent.
The Danger of Deferment
The primary driver for student deferments is economic hardship and insecurity brought on by the pandemic. With families who are likely to work in hard-hit service industries, many students may have postponed enrollment in the hopes of finding an income source. Deferring was the only option, financially speaking.
The problem is that students who defer community colleges often never return or complete their degrees, which has life-long economic ramifications. Community colleges are cost-effective engines of economic mobility, and have been shown to increase annual income by $7,900, 29 percent more than those with only a high school degree.
Furthermore, deferments put community colleges in danger of closing. These colleges do not have multibillion dollar endowments. With lower revenues, many will be forced to close. Closures would result in thousands of low-income students losing access to affordable higher education and economic mobility.
Even more concerning, the only group within higher education that saw an increase in enrollments was for-profit four-year colleges, which saw 5.3 percent more enrollments. For-profit universities are notoriously predatory institutions which have burdened vulnerable students with crippling debt, provided a subpar education, and yielded low graduation and employment rates. Without community colleges, predatory for-profit institutions may be able to target a greater pool of students.
What Can Be Done?
First, greater focus needs to be placed on decreased community college enrollment rates and their long-term economic implications. Anecdotal accounts about gap years of students at elite universities are certainly interesting, but they don’t capture a representative picture of declining enrollments or how the decline perpetuates economic inequality.
Second, governments (both federal and state) need to provide greater support to struggling students. The CARES Act allocated $14 billion to higher education, which included aid to elite universities (with multibillion dollar endowments). Many of these universities turned down the aid amid public backlash, but the stimulus should have been more concentrated towards need.
The CARES Act also provided disproportionally more funding to for-profit universities than community colleges, despite being intended to help low-income students. An NBC news analysis found that for-profit colleges received 9.0 percent of CARES Act funding, despite only serving 5.4 percent of students. On the other hand, community colleges serve 33 percent of all students but only received 22 percent of CARES funding.
In the second round of stimulus, the government tried to correct some of these issues by increasing fiscal stimulus to higher education, including an additional $22.7 billion for higher education. While this put more resources into circulation, it didn’t address the issue of access to resources.
For example, the stimulus checks excluded 17 to 24-year-old dependents. Dependents are not eligible for stimulus checks, but also don’t count as children for which parents will receive additional funding.
Additionally, the pandemic has halted many student jobs, abruptly eliminating sources of income for thousands of students. But these students are ineligible for many social programs such as Unemployment Insurance and Supplemental Nutrition Assistance Program (SNAP).
Providing subsidized textbooks is unlikely to improve graduation rates when students are hungry or homeless. Even those that are eligible may not receive benefits. Complicated federal forms and a lack of support in filling them out leads to many benefits going unclaimed.
There is an estimated $78 billion budget shortfall for community colleges, a key factor in degree non-completion. President Joe Biden must act to help reverse decades of under investment in public colleges at a time of critical importance for the future of higher education. That’s a policy that Dr. Jill Biden, formerly a professor at two community colleges, holds dear.