Higher education is no longer the nonstop growth field it once was. America's college boom has peaked. Now, the industry of higher learning better prepare for the next step: shrinkage.
Gone are the days when colleges could routinely bump up their tuitions each year without any concern for negative business impact. Now, colleges outside of the very top tier actually need to try (a little) to offer a (relatively) competitive product. This portends doom for the weakest schools, the least popular departments, the nonstop construction of new buildings, and other aspects of universities that were taken for granted during the boom times. The Wall Street Journal reports today on the cresting of college tuitions in America:
The survey of nearly 300 schools reflects a cycle of disinvestment and falling enrollment that places a growing number at risk. While schools for two decades were seeing rising enrollments and routine increases of 5% to 8% in net tuition, many now are facing grimmer prospects: a shrinking pool of high-school graduates, depressed family incomes and precarious job prospects after college...
For 44% of public and 42% of private universities included in the survey, net tuition revenue is projected to grow less than the nation's roughly 2% inflation rate this fiscal year, which for most schools ends in June. Net tuition revenue will fall for 28% of public and 19% of private schools.
A couple of decades ago, the newspaper industry was a sea of tiny monopolies, awash in profits and largely unthreatened by competition. Newsrooms had huge staffs, decent salaries and benefits, and foreign bureaus. Then the industry changed. The growth stopped. Then the shrinkage began. The perks started to crumble away. And eventually, only the strong survived.
Colleges could see the same thing happen soon. It's just beginning now. Professors in obscure disciplines with three students in your classes: better get your money while you still can.