Peak Graduate Enrollment (1)This is pretty interesting. It may be the proverbial canary in the coal mine… or it may just be regression to the mean. US graduate school enrollment has been flat since 2010, at just below 3 million heads per year. We haven’t seen anything like this over the past 30 years, a period for which we’ve enjoyed small but steady year-on-year increases. What factors might be responsible for this effect? What does it mean for graduate schools and prospective students?

First, the data. They are fall enrollment head counts from the IPEDS data center, a US Department of Education enterprise. Due to their validation process, there is a bit of a lag, such that the most recent available data is for 2103. Fall enrollment is used because the time series is longer. Another enrollment variable that IPEDS keeps, 12 month enrollment, shows that flat enrollment extends to 2014.

I’ve omitted data for the year 1999, which seem to have a wildly spurious under count relative to its neighboring years. I’ve included enrollment data for all non-profit (both public and private) and for-profit universities that award a masters or higher degree. Of the 2176 institutions in this group, enrollment data was missing for only about 50. This is a comprehensive picture because these are, in essence, anywhere that anybody goes to graduate school in the US for whatever field of specialization.

What factors might be responsible for this plateau in graduate enrollment?

  1. Economic prosperity-Probably not. Graduate school is widely thought to be anti-cyclical. The idea is to time your graduate education during a recession, so that jobs are more plentiful when you emerge. Inspecting the graph here sort of disputes that view. First, there are never enough recessions for this idea to explain the overall enrollment growth that has occurred up until recently. Furthermore, it is hard to discern enrollment boosts in recessions and pauses during the inter-recession periods with more than wishful thinking. Perhaps the best argument against this idea, however, is that although we are now a few years out of the recession, the US economy has hardly been bicycling on spinners over this period. The Great Recession has had long-lived negative effects that may have become baked-in to thwart economic progress.
  2. Declining enrollment at for-profit universities. No effect. The graph above looks the same if for-profit enrollment is removed from the data. Although it is true that enrollment is dropping at for-profits due to their notorious problems, graduate enrollment in the for-profit university sector is dropping at a lesser rate than undergraduate enrollment. Furthermore, the graduate enrollment at for-profits is only a small fraction of the overall graduate enrollment in the US. The simple fact is that enrollment at non-profit public and private universities is flat all on its own.
  3. Demographics-Quite possibly. The rate of growth has also slowed markedly for undergraduate enrollment in college. Since 2011, undergraduate enrollment has also been flat, holding pretty steady at 9.1 million heads (as a general rule of thumb, graduate enrollment stays around 1/3rd of undergraduate enrollment). Since about half of all baccalaureates earn graduate degrees, flat undergraduate enrollment growth predicts flat baccalaureate award rates, suggesting that the flatness in graduate enrollment will persist for some time to come.
  4. Tuition cost/Student loan burden-Possibly. College students have been graduating with increasingly higher student loan debt as they’ve been asked to bear a higher share of their cost of education. More people may be avoiding graduate school because the tuition cost is too high and/or they are unwilling to take on additional debt, despite the clear economic benefits of an advanced degree.
  5. Flat research spending-Quite Possibly. No matter the cost to students, producing people with advanced degrees is expensive for universities. There are a couple of reasons to believe that university research activity is, in fact, the strongest driver of overall graduate student enrollment, both of which I intend to write more about shortly. As research funding is constrained, the demand for and resources to train graduate student researchers is also constrained. The flat graduate enrollment we see above mirrors the flat to declining research spending over the same period. Not coincidentally, US universities also haven’t experienced year-to-year research spending this flat over the same period for over 30 years. Austerity is coming to roost at the university and it is likely impacting the vitality of graduate programs.

Flat graduate student enrollment seems is probably due to a combination of these latter three factors, in my opinion. The demographics and loan burden suggest to me that competition between programs for outstanding students, which is always high, will prove even higher. Fewer such people are considering graduate school and the value proposition for those who do attend will need to be stronger than it appears today. We hear data points here and there from our clients in the enrollment office trenches that suggest universities have already entered a period of evaluating their programmatic needs and preparing to mothball graduate programs that cannot attract enough talent. This may be the new normal.

The flat research spending means that fewer slots are available for students. Given the extraordinarily inefficient way people go about finding their graduate school options, this could negatively impact those students seeking research experiences as either doctoral or masters students, due to increasing competition between applicants for the available resources. Such students may need to widen their application strategies to ensure they find a program that not only fits, but is likely to have the resources to carry them through.

Finally, persistent flat enrollments is probably not a good thing in the overall picture of what a thriving knowledge economy needs. There is no reason at all to believe that the US economy suffers from too many highly educated workers, given the simple observation that unemployment rates are the lowest and earnings the highest for the most highly educated. A failure to produce more workers with advanced degrees could stymie the growth of companies and industries that depend upon such highly educated talent.