A popular narrative about college enrollment has been that Americans increasingly think a four-year degree is too expensive, so they are skipping college to go straight into the work force or seeking other kinds of training.
But what the public says on surveys and how they act in the marketplace can be two different things. A new working paper published by the National Bureau of Economic Research found that the steady decline in undergraduate enrollment since the end of the Great Recession has been driven largely by falling numbers at community colleges, typically the most affordable option for students, and to a lesser extent at for-profit colleges.
Between the fall of 2010 and 2023, community-college enrollment fell a whopping 37 percent, the study found. The drop in the proprietary sector, which at its peak accounted for 10 percent of undergraduates, was 50 percent.
While overall undergraduate enrollment fell nearly 13 percent over that same period, enrollment at public and private four-year colleges has steadily grown, aside from a temporary dip during the Covid-19 pandemic — a trend that has held since 1990.
Conversations about the future of higher education often assume that declining enrollments have been caused by the price of tuition, said Joshua Goodman, an associate professor of education and economics at Boston University and the paper’s primary author. “We’re saying that isn’t the main driver,” he said.
“Economists are famous for not believing what people say, but what they do,” Goodman added, and “people are not behaving as if they’ve lost belief in the value of a degree.”
Recent community-college enrollment declines due to the pandemic have been well documented, and in the past couple of years, the numbers have gone up, mostly driven by high-school students in dual-enrollment programs. But Goodman’s study uses a broader lens to trace shifts over time — and make the case that a key narrative about college is flawed.
The results do underscore the strong relationship between the labor market and community-college enrollment, Goodman said. Joseph Winkelmann, a doctoral student in public policy at Harvard University, co-authored the paper.
As other studies have shown, Goodman said, community-college enrollment grew as the unemployment rate increased, for example during the Great Recession. The researchers were also able to put a number on that relationship: “A one percentage point increase in the local unemployment rate increases first-time community-college enrollment by approximately 2 percent,” the study found.
Since 2011, a relatively strong job market has made work more attractive than community college for students who might have been on the fence about their choice, Goodman said.
“These patterns suggest that many students view community college and employment as substitute options,” the authors wrote, “enrolling in college when job opportunities are scarce and entering the work force when labor markets are strong.”
Surprisingly, the findings also reveal that part of the enrollment decline, more than a third, did not actually reflect fewer students at community colleges. Instead, researchers found that an increase in the number of community colleges offering four-year degrees meant that students at those colleges were classified in federal data as having attended a four-year college.
Another surprising result, Goodman said, is that the rate of completions at two-year colleges actually rose as enrollments dropped.
“Community-college completion rates have actually increased during this period,” the study found, “rising from 21 percent for students who started in 2009 to 34 percent for students who started in 2020.”
That finding suggests that the students who didn’t enroll “may be academically weaker than the average student or may be more likely to return to the labor market during their studies if such an opportunity arises,” the authors wrote.
Goodman said he’ll now dive deeper into institutional nuances — looking at, for instance, different kinds of four-year colleges. Recent data suggest that large public flagships are growing, while less-selective public regional colleges are losing market share.
There could also be some policy implications from the study, Goodman said — including helping community-college leaders and policymakers plan their budgets around the economic conditions. One idea, he said, is for states to help stabilize community-college budgets when enrollments are declining and the economy is strong, so that the institutions are able to handle enrollment growth during downturns.
“Community colleges play an important role in bad economic times,” he said, “giving people an opportunity when they might not have anywhere else to go. But the declines are a financial threat, and the labor market will not always be this strong.”
