Top Challenges Facing U.S. Higher Education

Last updated on: November 2, 2021

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Historically, colleges and universities have relied on traditional economic models to sustain them. For the majority of private institutions, that meant enrolling a stable number of tuition-paying students. In the case of public institutions, it meant receiving consistent state appropriations, in addition to tuition revenue. The pace of change in the economy, as well as the global COVID-19 pandemic, has impacted the reliability of traditional models, putting pressure on institutions to readjust their strategies.

Below is a list of the top challenges confronting U.S. institutions:

See the top challenges facing U.S. higher education institutions.

  • Student Enrollment is Declining OverallIn a survey conducted by Inside Higher Ed and Gallup, only 34 percent of the institutions polled met their enrollment targets for the fall 2017 term by May 1 (declining from 37 percent in 2016 and 42 percent in 2015). In addition, 85 percent of senior admission staff reported that they are very concerned about reaching institutional enrollment targets.
  • Financial Difficulties: Inside Higher Ed also surveyed 400 chief business officers in 2017 and reported that 71 percent agreed that higher education institutions are facing significant financial difficulties. This is an increase of 8 percent from 2016.
  • Fewer High School Graduates: The Western Interstate Commission for Higher Education data estimated that in 2017 there were 80,000 fewer high school graduates than in the previous year, a decline of more than 2 percent. The sharpest declines were in Wisconsin, Illinois, and Indiana.
  • Decreased State Funding: Multi-year decreased state funding for public institutions and community colleges has resulted in reduced critical services for students, putting significant strain on institutions.
  • Lower World Rankings: Decreased state funding for flagship universities is responsible, in part, for the United States slipping in world rankings. Times Higher Education’s publication of the 14th annual World University Rankings of 1,000 institutions from 77 countries revealed that America’s domination of the rankings has slipped. For the first time in the history of the report, no U.S. school ranked in the top two spots.
  • Declining International Student Enrollments: According to estimates cited by ICEF Monitor, 28 percent of all international students were enrolled in U.S. colleges and universities in 2001, but by 2014, the amount dropped to 22 percent. In addition, 40 percent of U.S. college and university deans expected declines in international student enrollments for the fall 2017 term.

To address these challenges, a number of institutions have reported that they will increase their focus on:

  • Online Education: A survey of chief academic officers conducted by Inside Higher Ed revealed that 82 percent plan to grow their institution’s online course offerings to expand access to adult and non-traditional students in the next year.
  • International Student Recruitment: In an attempt to offset the decline in the number of U.S. high school graduates, an increasing number of admission officers plan to expand their international student recruitment programs.
  • College Mergers and Acquisitions: Schools with little brand‐name recognition and low endowments may not be able to effectively navigate the impact of decreased domestic and international student enrollments and decreased state funding. Some institutions may choose to merge to save money, add depth or breadth to their operations, or supplement resources.

Updates for 2021

While the above challenges remain valid, there have been new trends heating up the higher education industry:

  • COVID-19 Impact:As the global COVID-19 pandemic changed the way we live, it also resulted in a new group of challenges for higher ed. Not only did universities have to transition their on-campus classes to virtual settings, but they have also have had to address concerns around enrollment, finances, and student support. While it’s too early to tell what the long-term effects will be, presidents and chancellors have voiced their concerns in this Inside Higher Ed survey. For more information about supporting students in virtual settings, check out our Virtual Instruction Resources.
  • AI Will Personalize the Student Journey:While some higher education professionals worry that AI could weaken the personal connection students have with universities, studies have shown that AI boosts personalization. Administrators should explore the variety of benefits AI offers and identify ways to tailor student support for every step of their journey.
  • Competency-Based Education:Competency-based education has long been inconsistent in the education landscape. Universities should work together to clearly define standards and measurements when awarding credit for work experience. This will help students graduate faster.
  • Personal growth and career advancement are top-of-mind for online students:Online students seek to achieve personal and career success through their degrees. Our 2021 Voice of the Online Learner report shows that online learners list their top outcomes as salary increase, new career, a promotion, and increased confidence in the workplace.

The trends outlined above suggest that higher ed administrators will need to explore new technologies and strategies to reach new student populations. Read the full article from Enrollment Management Report about shifts in higher education driving new approaches within institutions.

For higher education trends and approaches to change management, visit our Resources page.

Subscribe today to Enrollment Management Report for proven solutions to admit, recruit, and retain high-quality students.

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