Will COVID collapse the college cartel?

There are new signs that students are losing their patience with these restrictions and are starting to wonder whether a college education is really worth going through so much trouble. Up until now, college administrators have had the upper hand in negotiating with students desperate to win admission to their institutions. They are beginning to lose that advantage.

Though it may not seem like it, even higher education is subject to the laws of supply and demand. And the demand for college has been shrinking rapidly. Last week, the National Student Clearinghouse Research Center reported a drop of almost half a million students compared with enrollment the previous year. Long-term demographic trends account for part of the decline. After decades of robust population growth, the number of students in each college-going cohort has continued to shrink by an average of 1.67 percent per year since 2010. The decline shows no signs of stopping. The baby bust following the 2008 financial crisis will hit college admissions offices in just a few years, so institutions will be forced to compete for a declining number of students.

The current economic crisis has exacerbated matters. Students see a tight labor market and are beginning to see that they might not need a college degree to get the job or salary they are looking for. Doug Shapiro, the executive director of the Clearinghouse Research Center, recently told the Washington Post that he was worried about this trend because it could disproportionately affect the earning potential of lower-income students down the road. Those are the students most likely to take advantage of the tight job market.