The Curious Case of Declining Community College Enrollments

According to an article in today's Chronicle, community college enrollments declined 16% between 2010 and 2015.  More jobs, as well as four-year colleges, are credited with causing the decline.  In other words, those prospective students who would have done a two-year degree and then go to work were able to find satisfactory jobs without the AA degree.  Those who wanted a four-year degree apparently discovered they could swing a four-year institution.  Here's what EAB says about this:

"Since 2002, we’ve seen a real increase in the sophistication of marketing, recruiting, and enrollment management among four-year colleges. It’s not the for-profit sector that was increasing its share — that’s a classic competitor for many of our community colleges. It was actually the four-year publics and privates.
"Because discount rates are increasing, the price gap between two- and four-year colleges is narrowing. Private colleges have extraordinarily robust career services, experiential and cocurricular learning, internship placements, and smaller class sizes. If you’re a parent or student looking for the opportunity to be job-ready on Day 1, that’s an extremely valuable opportunity."

This should give those of us in private higher-ed cause to cheer.  However, in speaking with a very experienced and knowledgable consultant the other day, he observed to me that the deepening discount rates and sliding yields, that many non-profit privates are experiencing, present the picture of a trend that cannot continue indefinitely and a business model that cannot succeed in the long run.

Already in 2010, when the community college slide reported above began, the discount rate hit a record high.  As the rate nationally tickled the 50% mark in 2014-15, pundits cautioned of its unsustainability.

A possible win-win solution may be closer cooperation between the community college and the private sectors of our industry.  Consider New Jersey for example.  Rowan University, a public institution, has announced its intent to grow its student body from 15,000 to 25,000 in the next several years.  Montclair State University and the College of New Jersey, two other burgeoning public schools in the Garden State, have been building and beautifying their campuses and aggressively grabbing up students.  This signals a paradigm shift for the handful of private NJ schools --- Princeton U. excepted --- who traditionally have ridden the demographic wave.  Privates can no longer rest assured they will get their fair share of high school grads, in competition with their big and beautiful --- and cheap --- public rivals.

Partnering with the community colleges in New jersey and neighboring states might enable the privates to be more financially competitive.  And, indeed, many of NJ's private universities and colleges have actively sought such relationships.  But, the public four-years play this game too, as witness Rowan College at Burlington County.

But never mind... a combination of two years at a community college, then two years at a four-year private university can still be a win-win-win:

1.  Community colleges reverse their enrollment trend.

2.  Private non-profits reverse their discount trend.

3.  Students get an affordable education with a university diploma and little or no debt at the end of the road.