OT:Universities are in a World of Hurt

Investment Analysis Clubs Macro Economic Trends and Risks
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roughly 15 percent.

Underlying this is a sharp decline in public support for universities.

colleges were too expensive. Costs had been rising far faster than not only inflation but, more critically, family incomes.

Unlike in the rest of the economy, productivity in higher education was probably falling as the staff to student ratio rose. Buildings were empty too much of the year, faculty were writing a lot of articles of little consequence for miniscule audiences. Administrative bloat was already well under way.

The single event that did more than anything to trigger the decline came on April 4, 2011 when the U.S. Department of Education in a “dear colleague” letter proclaimed that sexual violence on campus led by hrny male students was a national problem, mandating remedies making a mockery of traditional Anglo-Saxon procedures of adjudicating wrongful behavior (e.g., no right to cross examine witnesses, prosecutors often serving also as judges or the equivalent). By 2015, these procedures were widely adopted.*

The result? An exodus of men from campuses. Between 2015 and 2020, enrollment fell by nearly one million students with 87 percent of the decline being men.

https://www.npr.org/2025/01/08/nx-s1-5246200/demographic-cliff-fewer-college-students-mean-fewer-graduates
A looming ‘demographic cliff’: Fewer college students and ultimately fewer graduates

Iowa Wesleyan University, a 181-year-old institution that closed in 2023 after financial losses due in part to discounts it gave out as it struggled to attract a shrinking pool of students.

The outlook, Moore and other experts say, is that there will likely be many more such scenes in the years ahead. That’s because the current class of high school seniors scheduled to graduate this spring will be the last before an expected long decline begins in the number of 18-year-olds — the traditional age of students when they enter college.

But the downturn isn’t just a problem for universities and colleges. It’s a looming crisis for the economy, with fewer graduates eventually coming through the pipeline to fill jobs that require college educations, even as international rivals increase the proportions of their populations with degrees.

the number of 18-year-olds nationwide who graduate from high school each year — and are therefore candidates for college — will erode by 13%, or nearly half a million, by 2041.

The news is not all bad. For students, it means a buyer’s market.
Is the above true. Is college tuition declining?

Falling enrollment, meanwhile, has been made worse by a decline in perception of the value of a college or university degree.
My university degree had HIGH VALUE. It kept me from a rice paddy in Vietnam. I attended university 1969-1973.

Among high school graduates, the proportion going straight to college has fallen, from a peak of 70% in 2016 to 62% in 2022, the most recent year for which the figure is available.

And now politics enters into the fray.
https://thehill.com/homenews/education/5324187-trump-administration-targets-foreign-students/
President Trump and his administration are going after international student visas on multiple fronts and for multiple stated reasons.

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An excellent report. Thanks for posting.

They say universities must engage in an arms race to attract students. High speed Internet. Chef prepared meals. Better facilities for science, music, the arts, etc.

Competition is one of the drivers for increasing costs.

Winning sports football, basketball, soccer is another factor. Gets news coverage, attracts alumni donations. Attracts students. And a major expenditure.

What can be done to reduce costs?

Better govt funding encourages more spending. We need some belt tightening. Student loans let students spend more but many over do it. College degree becomes less attractive.

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I have posted the data before, how some states, have defunded higher education, transferring the financial load onto the students. That, alone, will change the cost/benefit calculations for potential students, as their share of the cost of the education has, in some states, tripled, on top of general cost inflation. One board member posted the current rates for LSU. I posted the rate for U of M, and Whatsa Matta U. The rates in Michigan are far higher than at LSU.

I have posted enrollment trends for the Michigan state run universities before. U of M and State have seen small increases in enrollment. The second tier universities have seen sharp declines, 30-40%. Overall, the trend in total enrollment matches the falling population of the state, but enrollment is increasingly concentrated in the two largest universities. I am looking for the day the (L&Ses) in Lansing decide the second tier universities are redundant, and shut them down. That will be devastating to the small towns where many of the second tier schools are located. (insert rhetorical comment about whether state universities are a make work project for small towns)

*Largest employers (Kalamazoo-Portage area) Number of employees *
*Pfizer 6,100 *
*Bronson Hospital 3,000 *
*National City Bank 2,922 *
Western Michigan University 2,887
*Borgess Health Alliance 2,410 *
*Meijer, Inc. 2,400 *
*Kalamazoo Public Schools 2,300 *
*Portage Public Schools 2,300 *
*Stryker Corporation (hospital equipment) 1,400 *
Kalamazoo Valley Community College 1,100

Read more: https://www.city-data.com/us-cities/The-Midwest/Kalamazoo-Economy.html

Steve

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Just off the phone with a BIL. He feels Boston, in particular, is being targeted for academic cuts.

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having shot themselves in their collective feet?

The Captain

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Nothing breeds success like stupidity.

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The regime seems intent on bleeding off a lot of endowment generated income for itself.

Steve

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You don’t pay taxes so nothing to worry about.

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Good back and forth on various points. Some quite good. (corruption, Anti-young men attitude. (pervasive not just on campuses) I like that one “competition drives up costs.” The ghost of Uncle Miltie just did something in his pants I’m positive. I see it as a panic article." Nowhere does it say, specifically and with evidence, why we should panic. College enrollment is down. Some schools have closed (Like maybe they should!) In the future there will be a somewhat smaller armadillo of 18 yr olds working its way through the snake of education. I’d call it a period of adjustment.

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I don’t think that’s true. When and where I went to college funding was about 80% government/20% tuition. Now it is flipped.

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Education institutes are not meant to be hedge funds that operate tax free.

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What was the intent of the people who funded those endowments, if not to make education affordable?

Steve

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To support research.

DB2

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I can see that happening. Whatsa Matta U’s enrollment has fallen 27% between 2011 and 2021, but the university has been building new buildings at a rapid pace, including a new chemistry building and new student union. Why? They need to compete for a shrinking number of students, so are putting money into new facilities. When I was there, in the 70s, the entire engineering school was in one building. Now, the engineering school is an entire separate campus, several miles away. The aviation program now has it’s own campus, at the airport in Battle Creek.

Here is a table of ten year enrollment trends.

Screenshot 2025-06-01 at 16-01-50 Fiscal Snapshot 10-Year University Enrollment Trends - Jan2023 - HigherEd_10_Year_University_Enrollment_Trends_Jan2023-2.pdf
Screenshot 2025-06-01 at 16-01-50 Fiscal Snapshot 10-Year University Enrollment Trends - Jan2023 - HigherEd_10_Year_University_Enrollment_Trends_Jan2023-2.pdf853×485 29.4 KB

Besides cutting funding, the regime is trying to run foreign students out of the country. Some 9,300 foreign undergrad students have been enrolled in Michigan public universities. Some have already been rounded up by the regime.

Of those Michigan public universities, I see several that, if 9,300 students were withdrawn, would cease to exist. Others, like Whatsa Matta, would lose nearly two thirds of their enrollment, and cease to be viable. With a wholesale expulsion of foreign students, I don’t see how the state could avoid closing some of the second tier universities.

Two are safe: U of M, and State, by virtue of size and growth, and, more importantly, many of the (L&Ses) graduated from one or the other: Gov Whitmer (State, 1993), Snyder (U of M 77), besides they have good football teams with which to entertain the mob.

Steve

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I think ego is part of it. Often they get things named after them. At Princeton, Firestone Library and Lake Carnegie. And probably many more.

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Does it?

I mean, sure, that is fair assumption but is there any empirical data that supports such a claim? Do we see this play out that way in other countries that better subsidize higher education?

We had better funding last century - and I think we had less spending, not more.

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The scuttlebutt is when govt made more student loan funds available, universities responded by raising prices.

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That isn’t the same thing. Paying a subsidy to the buyer is not the same as subsidizing the producer. The former does nothing to reduce prices while the later can be a form of incentive to keep prices low(er).

Again, is there any empirical data or is it just supposition?

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The Law of Supply and Demand! Increase money, create inflation.

The Captain

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Or, the availability of Federal student loans masked the impact of states defunding higher education. Without “EZ credit”, there may have been a more noticeable drop in enrollment, as the (L&Ses) diverted funding to their pet projects. That has been the case with car sales. The price escalation of recent years has been enabled by payment terms being extended from the traditional 36 months, to, now, about 84 months, or more.

Steve

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