US Colleges Diverging Into Winners and Losers, Shakeout Coming

Clemson University, one of the schools cited by the WSJ as a winner. Photo Credit: Yousef Abdul-Husain, CC BY-SA 4.0

The Wall Street Journal has been doing great work digging into the pending crisis hitting may colleges, particularly small non-selective liberal arts schools. In today’s paper they have a piece on colleges sorting into winners and losers:

The diverging fortunes help explain how U.S. higher education is shifting. For generations, a swelling population of college-age students, rising enrollment rates and generous student loans helped all schools, even mediocre ones, to flourish. Those days are ending.

According to an analysis of 20 years of freshman-enrollment data at 1,040 of the 1,052 schools listed in The Wall Street Journal/Times Higher Education ranking, U.S. not-for-profit colleges and universities are segregating into winners and losers—with winners growing and expanding and losers seeing the first signs of a death spiral.

The Journal ranking, which includes most major public and private colleges with more than 1,000 students, focused on how well a college prepares students for life after graduation. The analysis found that the closer to the bottom of the ranking a school was, the more likely its enrollment was shrinking. (There were 12 ranked schools that didn’t have full enrollment data, so they were dropped from the analysis.)

…

“In the same way the bookstores fell when Amazon took over, now it’s higher education’s turn and it’s been coming for a while,” said Charles Becker, Concord’s vice president for business and finance. “The shake-out is coming. It’s already here.”

…

Richard Vedder, the director of Center for College Affordability and Productivity and a teacher at Ohio University, believes dark days are ahead for the nation’s poorest ranked schools.

“You’re going to see, over the next five years, a real increase in the number of schools in serious trouble,” Dr. Vedder said. “A degree from a top school is a still a pretty good signaling device [to employers]. It means you’re smart and hardworking. But a degree from one of these lower schools doesn’t mean much of anything.”

…

Because the demographic dip is so pronounced in the Midwest and Northeast, low-ranking schools there are the most vulnerable to enrollment declines. Schools in Pennsylvania, Ohio and New York made up a quarter of the 237 schools that saw a 10% or greater decline in enrollment between 2011 and 2016.

Click through to read the whole thing (subscription required).

Right now the problems seem to be limited to the bottom 20% of schools, defined using criteria such as student loan default rates and average salary after graduation.  This is something to keep an eye on.

from Aaron M. Renn
http://www.urbanophile.com/2018/02/22/us-colleges-diverging-into-winners-and-losers-shakeout-coming/