Why is college enrollment declining? A study by the National Center for Education Statistics found that many chose not to enroll in college at the onset of the pandemic due to changes in their household’s income, concern about contracting COVID-19 and uncertainty around the class format. But as the effects of the pandemic subsided and schools resumed in-person learning, enrollment still lagged. Shapiro said he believes there are other factors still at play, mentioning college affordability and concerns about debt as barriers to enrollment. He also noted that a relatively strong labor market for unskilled workers could be contributing to the decline in college enrollment. Higher employment has long been a driver of lower college enrollment. The Department of Labor reports that the economy has added, on average, 407,000 jobs every month in 2022. It also shows wages trending upward to catch up to inflation. For someone thinking of college, the opportunity cost of leaving the job market may be too high. And the actual cost of college is high. Data from the Education Data Initiative, a research organization focused on U.S. education statistics, shows tuition grew on average by 4.63% annually from 2010 to 2020. This has forced many students to borrow, on average, over $30,000 each year to pay for college. Kristen Ahlenius, director of education at Your Money Line, a financial wellness platform, sees a scenario where forgoing college could be beneficial. “I think forgoing, if you know what you want to do, absolutely could be the right decision,” Ahlenius says, noting how debilitating student debt can be. Why you should still consider college Even with soaring tuition and a student debt crisis taking over headlines, college graduates tend to be much better off than high school graduates in the long run. “The data continues to show that a higher level of education is associated with higher earnings and lower unemployment,” says Brian Walsh, a certified financial planner and senior manager of financial planning for SoFi. In 2021, the median annual salary for a worker with a bachelor’s degree was $22,000 more than that of a high school graduate, according to the Federal Reserve Bank of New York. And the Labor Department found that the earnings gap increases with the level of education. Holding a master’s, doctorate or other professional degree means you could earn more than double what you would make with a high school diploma. Degree holders are also more likely to remain employed. According to the Labor Department, the unemployment rate for bachelor’s degree holders was 3.5% in 2021, compared with 6.2% for those with a high school diploma. The higher your degree, the lower your chances of unemployment.
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