Fitch Ratings-Chicago/New York-19 September 2022: Enrollment pressures are expected to continue to weigh on US higher education even as the pandemic effects recede, with less selective institutions facing credit pressure, Fitch Ratings says. While freshmen matriculation and international student enrollment have rebounded somewhat from 2021 and 2020, unfavorable demographics and shifting employment qualifications in the broader economy may negatively affect long-term enrollment.
Enrollment pressures will be felt unevenly. The most selective universities, few of which saw any significant enrollment declines during the pandemic, are expected to see steady student demand. Enrollment at less selective, typically smaller, four-year degree institutions is unlikely to rebound to pre-pandemic levels this fall, further straining budgets given their higher dependence on student-generated revenues.
Total enrollment at four-year colleges and universities declined by roughly 3% in fall 2021 compared with fall 2020, according to preliminary estimates from the National Student Clearinghouse. This is a deviation from projected growth expectations from the National Center for Education Statistics (NCES). Enrollment is projected to decline a further 1.6% yoy in fall 2022, according to NCES, which would reflect an improvement against declines in both prior-year and spring 2022 enrollment, which fell 4.1% yoy. Some states, such as Texas and Illinois, have acted to combat these pressures by implementing mandatory Free Application for Federal Student Aid completion for all high school graduates, which helped boost applications in 2021-2022 from pandemic lows.