For Whom the Bell Tolls

Ingrid BergmanRegular readers might remember that in September 2013 I published this post about the pressing need for colleges and universities in the USA to figure out how to cope with populations of high school graduates that are smaller in number, more culturally diverse, and less wealthy than those in previous decades.

The Chronicle of Higher Education has just published two articles that explore the same subject at greater length:

Colleges Face Tough Trade-Offs

Colleges Peer Into the Future

Among the interesting tidbits from these two articles:

  • For every 100 18-year-olds in the USA, there are only 95 4-year-olds.
  • The percentage of high school graduates whose parents never attended college, who are from low income backgrounds, and/or who are of Hispanic ancestry will increase dramatically.

These demographic changes are happening across the country. If, for example, one looks at the WICHE data for Iowa, one sees that the number of high school graduates in the state has plummeted by over nine percent in the last decade. The number of Iowa’s high school graduates is not projected to return to 2003 levels until 2025, after which they are forecast to decrease once again. And although the Hispanic proportion of Iowa’s high school graduates is projected to double to approximately 10 percent by 2020, the post-secondary degree attainment rate for Hispanics in Iowa is very low in comparison to other groups.

If you are at all like U.S. Senator Al Franken, you’re probably asking yourself “How does this affect me?” We can look to Iowa again for another example: Iowa Wesleyan College (IWC), an institution that is unlikely to survive the erosion of its traditional market base. Its enrollment is now less than 600 full-time students — perhaps closer to 550 students — but given its Form 990 filings with the IRS, the students it does have require greater amounts of financial aid. The Form 990 for the tax year ending on 31 May 2012 shows that IWC was able to run a budget surplus over the prior year only because of gifts that totaled more than $4 million. Those gifts filled a budget deficit of $3 million, but that level of giving doesn’t happen on a yearly basis.

We know this because the IWC president and board of trustees recently announced the elimination of half of the college’s academic majors and the January 2015 termination of 22 of its 52 faculty members. Given the changes to the market that IWC has historically operated in, I doubt this college is going to survive, even if it attempts to recruit Hispanic students by renaming itself Selena Gomez University. To me it looks like one of the canaries in the higher education coal mine.