I suspect that relatively few people share my interest in demographic trends. While there have been some interesting developments in the field over the past decade or two, demographic trends take so long to play out that it is a bit like watching a glacier melt. Most people rapidly decide to move on to a more dynamic topic.
Occasionally however, a demographic trend intersects with a human interest story such that the mainstream press takes notice and writes a few stories, leading people to wring their hands and commiserate on the “going-to-hell-in-a-handbasket” nature of our society. The most recent example has been a variety of articles describing the financial struggles of small colleges and universities due primarily to falling enrollment. Who wouldn’t be a little saddened by the thought of a bucolic campus in a picturesque town having to close its doors after years of imparting knowledge to eager young minds?
A recent story in the Wall Street Journal focused on the shaky future of St. Michael’s College in Colchester, Vermont, where enrollment is down by more than 40 percent over the past 10 years.
“These days, St. Michael’s and other campuses face the so-called demographic cliff, a drop-off in the number of prospective students that is forecast to last years. The largest number of Americans born in a single year entered colleges this past fall. After those students had been born, the 2008-09 financial crisis hit and birth rates plummeted.” [1]
The article goes on to describe falling budgets, departmental reorganizations, and staff cuts that have been undertaken in recent years to realign the budget with the reality of lower enrollment. Despite these steps, the article makes it sound as if it is a 50/50 proposition whether the college closes or perhaps merges with another institution (such as the nearby University of Vermont). In fact, St. Michael’s is probably better off than a hundred or more other colleges that are even smaller and closer to insolvency. St. Michael’s future might be shaky but at least has a solid academic reputation, a location in the Burlington metropolitan area of 225,000 people, and proximity to major cities such as Montreal and Boston.
Over the past five years, nearly 100 colleges (both public and private non-profit) have closed or merged, along with dozens of for-profit institutions. Forecasts call for 40 to 50 more closures per year for the next several years (out of roughly 2,700 4-year colleges and universities in the U.S.). This trend can indeed feel catastrophic for the students who have to find another place to finish their education, the faculty who suddenly are unemployed, and for the surrounding communities which lose a major economic engine.
The impact is not limited to small colleges. Just a few weeks ago, the Chancellor of Syracuse University (with a student enrollment over 20,000) sent a message to faculty and staff warning that the school would miss enrollment targets for the 2026-27 school year. And yes, the declining number of 18-year-olds was highlighted in the second paragraph. According to Chancellor Haynie, “competition for students is now more intense than at any time in modern U.S. history.” [2] Of course, Syracuse University, with an endowment of over $2 billion, is not in danger of closing its doors any time soon, but the message warned of potential budget deficits.
Another recent Journal article explored the difficulty in repurposing the campus of Green Mountain College which closed in 2019 after enrollment had dwindled to less than 500 students. There simply aren’t that many economically viable uses for a 115-acre campus located in a small town (Poultney, VT, population 3,000) in an isolated part of the country. [3] Everyone has ideas, but financial reality crushes most of those dreams.
While the closing of a small college can be devastating at a very localized level, it doesn’t have much of an impact at the national level or even the state level. The fact of the matter is that businesses and organizations of all types periodically close. The closure of a small college now is not much different from the closure of factories in the 1970s and 80s when manufacturing was being shifted to low wage countries in Asia. The loss of a major employer is a substantial blow to any small town regardless of the type of enterprise, but people adapt and life goes on. The future of higher education is not going to be imperiled – if you want a college degree, there are lots of options available that are financially stable.
An Inflection Point, Not a Cliff
Birth rates have been falling in developed countries for the past several decades, so no one should be surprised that the number of people in any particular age category will eventually start to drop. Over the next 15 years, the number of 18-year-olds in this country will decline by about 15 percent. For a slightly broader perspective, see the accompanying chart which shows the latest projections for the 15-1o-19 age cohort over the next 40 years. The pattern is a gradual decline, then a period of stability, and then another gradual decline. In skiing terms, this is more of a bunny slope than a black diamond. Unless you graph this with a wildly truncated vertical axis, there is nothing “cliff-like” to see here.
This inflection point – changing from growth to contraction – marks an important demographic trend but it is not necessarily a catastrophic one. Colleges and universities were able to adapt to sustained growth over the previous 70 years, so it seems likely that the best ones will be able to adapt to this steady contraction as well. As is always the case, there will be winners and losers but the focus should be on adapting to the new reality rather than on “saving” organizations that are no longer competitive.
I suspect we are shaken by stories like this because we are accustomed to growing in this country, not shrinking. Bigger is seemingly always better, which means that getting smaller must be a sign of impending disaster. In fact, improvement has many different dimensions and quantity is just one of them. The biggest problem with this demographic shift may be our inability to think about progress in ways that don’t include numeric growth. The impact of low birth rates is not going to affect just higher education, it will ripple throughout our society. We need to adjust our mental outlook before we adjust anything else.
Bigger Forces At Work
I don’t mean to suggest that the declining number of 18-year-olds is a trivial issue because it is not. But I don’t think it is the primary issue determining the survival of small colleges and universities. Portraying it as such means that college administrators may focus on the wrong solutions and miss opportunities that are likely to be more effective. Administrators need to understand clearly what it is they are “selling” and how that fits in with the future of our society and economy. In particular, strategies that lean on nostalgic visions of small college life are likely to fail. Pragmatic and tech-centric students are likely to value assistance in navigating a world shaped by artificial intelligence, trillion dollar corporations and global power struggles in addition to the critical thinking skills and social networking that universities have traditionally provided.
To begin with, there are three numbers that I think are especially important when it comes to enrollment declines but they get much less attention than the “demographic cliff.” First, the percentage of high school graduates that enroll directly into college has dropped from a high of roughly 70 percent 10 years ago to approximately 62 percent currently (although 2025 saw a bit of a rebound). Second, the enrollment percentage represented by adult learners (students aged 25 and up) has dropped from roughly 35 percent in 2016 to 25 percent currently. [4]
In my opinion, both of these trends suggest a growing disillusionment with the perceived value of a college education. If prospective students don’t see a compelling value proposition, then institutions with a shaky financial future shouldn’t blame declines in the number of 18-year-olds. There may be a fundamental mismatch between what prospective students want and what small colleges provide.
The third number is that foreign student enrollment at U.S. universities has dropped by 20 percent for the spring 2026 semester (based on a survey of 149 U.S. schools). [5] This is likely a response to President Trump’s aggressive anti-immigration efforts which have included foreign-born students. The administration has also slashed, or threatened to slash, funding to major universities which may have reduced their appeal to top foreign scholars.
In addition, the value proposition of a college degree has undoubtedly been affected by the rising cost of a postsecondary education and the well documented financial stress that comes from taking out student loans. Total student loan debt now sits at $1.78 trillion, up from $860 billion 15 years ago (up 106%). For perspective, the Consumer Price Index has gone up by slightly less than 50 percent during that same time period. Roughly one in every six U.S. adults has student loan debt (42.8 million borrowers) and the average debt balance is over $40,000. Even at relatively affordable public institutions, the typical university student borrows nearly $32,000 to obtain a bachelor’s degree. [5]
Colleges and universities in general, and small colleges in particular, are caught in a bind by what is known as Baumol’s Cost Disease. This oddly named economic theory, first described by William Baumol and William Bowen, points out the pattern of rising wages in industries that have experienced little productivity growth due to rising wages in industries that did experience productivity growth. This happens because jobs without productivity growth still need to compete for workers with jobs that have productivity growth (cross elasticity of demand). These sectors become more expensive over time because input costs increase while output does not. Higher education is a prime example. Aside from PowerPoint presentations replacing notes on a chalkboard or overhead slides, classes in many colleges are taught in much the same way as they were 50 years ago, and yet salaries have increased in line with more efficient industries.
On top of all of this, the white collar portion of the labor market is in turmoil. Artificial Intelligence experts are predicting the demise of the entry-level job and tech companies are announcing major layoffs, ostensibly because of AI. Twenty-five percent of the unemployed hold bachelor’s degrees, a record high.
A recent study by Price Waterhouse Coopers covering millions of job listings identified a trend they referred to as the “seniorization” of entry-level jobs. PwC found that entry level jobs in AI-focused industries were not necessarily disappearing, but that they required job skills that most workers don’t master until they have 8 to 10 years of experience – skills such as strategic decision-making, leadership experience, and stakeholder management. In the most AI exposed occupations, 52 percent of skills requested in entry-level job postings were skills traditionally associated with experienced workers. In the least AI-exposed occupations, that figure was 7 percent. [6] Thus many entry level jobs exist in theory, but new graduates can’t get them.
The result is that the knowledge that students want to have when they graduate is changing, but no one is exactly sure what that new knowledge should look like. Colleges and universities need to become more efficient in translating professorial labor into learning, but no one is exactly sure how that should be done. Finally, colleges need to effectively communicate these changes to prospective students so they can rebuild the perceived value of their product, but no one is exactly sure how that message should be crafted. This trifecta of doom is why small colleges and universities are struggling to stay open. And yes, the declining demographics of 18-year-olds certainly doesn’t help, but that is an ancillary problem not the primary one.
Impact on Cities
Falling birth rates leading to falling population numbers for age cohort after age cohort are a reality that our society needs to learn to deal with – 18-year-olds and small colleges are just an early example. The change will be relatively slow and gradual, which gives us time to adapt. Calling it a “cliff” might grab people’s attention but I don’t think it helps solve any of the resulting problems. What is needed is the ability to creatively think about a future where numeric decline is commonplace.
Cities that have historically been home to a small college or university have led a mostly charmed life. Small colleges bring in students that spend money and demand relatively few municipal services in return. They employ a lot of people and pay relatively good wages. They enhance the cultural and educational opportunities of local citizens. And finally, they have done all of that while having a long-term commitment to the community.
Those glory days may be coming to an end. Cities need to have frank discussions with decision makers to understand their true financial situation and to brainstorm ways the community can support local colleges into the future. That future may look dire, but closure is not inevitable. Cities, and institutions of all kinds, need to plan for a world in which a decline in the quantity of people is superseded by growing productivity, technological advancements, and a focus on the quality of life.
Notes:
1. Douglas Belkin; “The Small Private Colleges Dying in a Winner-Take-All University Marketplace”; April 2026; The Wall Street Journal; https://www.wsj.com/us-news/education/college-tuition-loans-budget-cuts-7d0ea05f?mod=Searchresults&pos=20&page=1
2. J. Michael Haynie; “An Update On Our Enrollment Outlook”; June 2026; Syracuse University; https://news.syr.edu/an-update-on-our-enrollment-outlook/
Owen Tucker-Smith; “Vermont’s Most Bizarre Real-Estate Listing Is A Free College Campus”; June 2026; The Wall Street Journal; https://www.wsj.com/us-news/vermonts-most-bizarre-real-estate-listing-is-a-free-college-campus-a499277a?mod=Searchresults&pos=1&page=1
3. Robert Kelchen, et al; “Predicting College Closures and Financial Distress”; December 2024; The Philadelphia Federal Reserve; https://www.philadelphiafed.org/-/media/FRBP/Assets/working-papers/2024/wp24-20.pdf
4. Miranda Jeyaretnam; “As U.S. Enrolls Fewer International Students, Universities in Asia Are Going the Other Direction”; May 2026; Time Magazine; https://time.com/article/2026/05/12/us-university-higher-education-international-students-asia-trump-immigration-visa/
5. Melanie Hanson; “Student Loan Debt Statistics”; February 2026; Education Data Initiative; https://educationdata.org/student-loan-debt-statistics
6. Nick Lichtenberg; “Entry level work didn’t disappear, PwC finds with ‘seniorization.’ It just morphed into something young workers can’t get”; June 2026; Fortune; https://fortune.com/2026/06/18/entry-level-work-ai-pwc-seniorization-report/
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