Why the college enrollment collapse isn't the crisis you think
Plus: A student loan repayment update, and the case for risk-sharing.
Measured by absolute enrollment, the heyday of higher education was fifteen years ago. In the aftermath of the Great Recession, students escaped the weak labor market by enrolling in college. But from 2010 onwards, college enrollment plunged. Today, there are three million fewer undergraduate college students than there were during Peak Higher Ed.
Many see this as a crisis. Are students giving up their futures if they forgo college? Not necessarily, according to new research I published this month at the American Enterprise Institute. Almost all of the decline in college enrollment has occurred at low-quality schools. High-quality colleges, by contrast, have actually seen enrollment increase.
Enrollment trends by college quality
I divide colleges into five groups based on several measures of student outcomes: graduation rates, student loan repayment rates, and earnings after enrollment. Students who choose different institutions experience wildly different outcomes. At colleges in the top fifth of student outcomes, students are four times as likely to graduate, twice as likely to repay their loans, and earn over $20,000 more per year relative to their peers at colleges in the bottom fifth.
We can track enrollment patterns in each group of colleges over time. Colleges in the bottom fifth of student outcomes lost 47 percent of their undergraduate enrollment between 2010 and 2023. Together, the bottom two-fifths of colleges by student outcomes account for almost all the drop in college enrollment since 2010. Meanwhile, colleges in the top fifth grew enrollment by 8 percent.
For-profit colleges saw some of the most significant drops in enrollment. The University of Phoenix, for instance, lost more than three-quarters of its students from 2010 to 2023. But it’s not just a for-profit college story: community colleges in the bottom fifth of student outcomes also lost a significant chunk of their enrollments.
By contrast, high-quality schools—especially large public universities—grew their student bodies over the last decade, bucking the trend of lower college enrollments. Texas A&M University, which enrolled around 40,000 undergraduates in 2010, now exceeds 60,000 students.
Students are pursuing higher-value majors
Meanwhile, students are increasingly choosing majors that lead to a strong return on investment. The number of bachelor’s degrees conferred in computer science nearly tripled between 2010 and 2023. Degree conferrals in nursing and engineering also skyrocketed. But fewer students are earning degrees in lower-wage fields like philosophy, sociology, English literature, and education.
I measure these changes systematically by matching typical starting salaries for each college major to data on degree conferrals over time. Overall, the number of bachelor’s degrees awarded has grown even as college enrollment has fallen—not an unexpected result given that enrollment losses have occurred at institutions where most students don’t graduate. But almost all of that growth in degree conferrals has occurred within majors where the typical starting salary exceeds $60,000. Degree conferrals for lower-earning majors have barely budged.
College enrollment may be sliding. Nonetheless, colleges are graduating more students and awarding more degrees in higher-earning fields. Fewer students are enrolled at institutions where the student loan crisis was most acute. The higher education sector may be slightly smaller—but it’s generating better results.
Check out my full report, with many more tables and charts, at this link.
What I’m writing
The student loan repayment situation still looks troubling, according to the latest batch of data from the Education Department. Of 35 million federal student borrowers not enrolled in school, 12.8 million (36 percent) were making their payments on time as of June 2025. That’s up a hair from three months earlier, but well below pre-pandemic repayment rates. It’s time to brace ourselves for a wave of student loan defaults, which looks unavoidable at this point.
Student loan risk-sharing didn’t make it into the final version of the One Big Beautiful Bill. The House approved a plan to hold colleges financially responsible for unpaid student loans, but the Senate stripped it out in favor of a different approach to accountability. But in a new issue brief for AEI, I argue we shouldn’t give up on risk-sharing. The policy has a successful track record in Brazil, as I document. Moreover, it would target some of the worst actors in higher education and create a direct incentive to reduce student debt.
What I’m reading
Some early evidence that AI is killing job opportunities for entry-level workers, per a report from Stanford University’s digital economy lab.
Relatedly, long-term unemployment among college graduates growing more common, according to the New York Times.
Colleges are lowering standards for majors with worse economic returns—which ends up devaluing these degrees even further, writes Ohlone College business professor James Andrews.
Oregon community colleges want to create low-cost bachelor’s degrees in education, but four-year universities in the state are trying to quash them, the College Fix reports.
Inside Higher Ed reports on a flood of fake colleges trying to scam students with legitimate-looking websites and AI-generated images.
What I’m doing
I joined Bruno Manno of the Progressive Policy Institute for a podcast conversation about the One Big Beautiful Bill.
I also took a long weekend trip to northern Minnesota earlier this month, which coincided with a coronal mass ejection (a solar tantrum) a few days before. It created a dazzling aurora which was visible with the naked eye, the most impressive I’ve ever seen (ok, I’ve only seen it twice). Some more photos here.
