New Baby Boom Swamps Colleges

January 3, 2003 | By Anthony DeBarros

Coming soon to a college near you: kids. Lots of kids.

The nation’s colleges and universities are bracing for a wave of students to hit campuses over the next decade. The surge, propelled by an upturn in births throughout the 1980s, will produce the largest high school and college enrollments in U.S. history. And it is expected to force colleges to rethink enrollment policies, expand services and scramble for housing and class space, not to mention the money to pay for it all.

College students and their parents will have their own set of pressures. Tuition and fees, which already outpace inflation, will continue to rise. Competition for slots at top schools will become even more intense. And some state universities will become more specialized, pushing more students into less-known state schools and community colleges.

“If your child is interested in going to one of the most selective institutions in the country, his or her odds of getting into that institution are going to be relatively low because there’s going to be tremendous competition,” says Bob Brock, president of the Educational Marketing Group.

How long will this last? The leading edge of the baby boomlet—often called that because these are the children and grandchildren of baby boomers—is working through colleges now, but it’s only a hint of the wave to come. The baby boomlet peaked in 1990, when 4.2 million babies were born—just 110,000 fewer than the baby boom’s peak in 1961.

That bubble is expected to drive up college enrollments—and keep the pressure on schools and students—each year for the next decade.

“The projections are we’ll graduate the biggest high school class in the history of the country in 2009,” says Patrick Callan, president of The National Center for Public Policy and Higher Education. Projections suggest that 3.2 million students will graduate that year, up 9% from 2003 and slightly more than the Class of ‘77, the baby boomers’ biggest.

This is a big batch of kids. The USA recorded 78.2 million births from 1982, the year most demographers pick as the marker between Generation X and the so-called Millennials, to 2001, the most recent year data’s available. That’s more than the 74.9 million post-World War II births that defined the baby boom, from 1946 to 1964, and demographers aren’t even sure when to call an end to the current cycle.

“It’s a huge bulge,” Brock says. “It’s going to drive marketing, it’s going to drive society’s focus, it’s going to drive what’s hot and what’s not.”

It already has. This is, after all, the generation that made Britney Spears a star and turned low-cut jeans into high fashion. Also known as Generation Y or simply the children of soccer moms, these boomers are confident, achievement-oriented and used to hovering “helicopter” parents keeping tabs on their every move.

They, and their watchful parents, likely will challenge colleges to offer safer, more protective environments, says Neil Howe, co-author with William Strauss of the forthcoming book Millennials Go to College, to be published this month.

“We think this will be a period of tumult for colleges in terms of their relative position on the ladder,” Howe says. “Some colleges will get it—will provide this highly special, protected launch pad for this generation, which will resonate with it. And other colleges will not be able to get out of the Gen X mold.”

Southern and Western states—places where the economy, job growth and migration have been strongest—will see the biggest increases in high school graduates. Some states in the upper Midwest and Northeast, which have lost population overall in recent years, may actually see declines—making this boomlet and its impact highly regional.

Higher prices a certainty

The growth pattern, Callan says, “is sort of this arc that starts up in Washington (state) and goes all the way around to the Southwest and the Southeast and up to about North Carolina and Virginia. But it’s not the Northeast; it’s not the upper Midwest.”

One thing everyone will face: higher prices. A study by The National Center for Public Policy and Higher Education found that while state appropriations to public institutions grew 13% from 1980 to 1998, revenue from tuition leaped 107% in that same time. Meanwhile, the report said, financial aid has not kept pace with rising college prices.

“The cost of producing an extremely high-quality education is going up and up and it’s not being offset by any other revenue streams other than primary tuition,” Brock says. “So the costs of a high-quality education are going to continue to increase.”

One of the Southern states feeling the early impact is Texas. The first tremors of the Millennials began hitting the tree-lined campus of the University of Texas-Austin during the late 1990s, when applications and enrollment began to rise dramatically.

The fall 2002 semester saw more than 52,000 students pack the university, including a record freshman class. Chemistry and biology labs are full, and officials were concerned enough to cut enrollment for next year.

“We’ve got a lot of people here. I think we’re too big under the structure we have now,” says university president Larry Faulkner.

Big concern is money

But if size is one concern, money is another. This month, Texas legislators will begin grappling with a budget shortfall estimated at$5 billion or more. For UT-Austin, that means uncertain funding at a time when turmoil on Wall Street is also shrinking the school’s endowments.

Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers, calls the situation—faced by colleges across the country—“a double whammy.”

“You have expanded demand and diminished resources to do something about it,” he says.

That could mean trouble for schools on shaky financial footing.

“We think a lot of the weaker colleges in this environment could end up having to merge or consolidate in larger numbers or even close,” says Mary Peloquin-Dodd of Standard & Poor’s, which recently released its annual report on higher education. School closings would further increase enrollment pressures.

The federal government projects public and private college enrollments will increase a total of 13% from now until 2012, adding 2.1 million students to the 15.6 million enrolled in the fall of 2002. At the same time, state after state is struggling to fill budget gaps and cutting education funding while public colleges and universities need to be planning for the wave of kids.

Spending is needed now for dorms, equipment and additional teachers, experts say. And even though more students would bring more tuition revenue, that wouldn’t necessarily solve the funding equation. At public colleges and universities, tuition accounted for less than a fourth of per-student revenue in 1998, according to The National Center for Public Policy and Higher Education.

“This is the first time in the modern history of higher education that we’ve had simultaneously a recession in the midst of a projected big enrollment increase,” Callan says. “It’s a huge crunch for which states did not prepare well.”

Indeed, across the country, states are struggling to close deficits, and higher education is feeling the strain:

In Connecticut, the state’s higher education system took a 5% budget cut this year, about$28 million, to help close a$500 million budget gap. The coming year doesn’t look brighter: Gov. John Rowland has ordered the state’s colleges and universities to lay off more than 400 people to trim another $31 million.

In West Virginia, Gov. Bob Wise has told the state’s colleges and universities to trim $12.8 million from this year’s spending, opening the door to hiring freezes and long-term vacancies. Officials there say next year’s cuts could go as deep as $41 million, which could force elimination of programs.

In Kansas, where the state faces a $312 million budget shortfall, public universities, community colleges, technical schools and state student financial aid programs have lost almost $54 million this year in budget cuts.

Bigger cuts coming

At the University of Texas-Austin, president Faulkner also has money to worry about. His campus is taking a $5 million cut this year in revenues it receives from the public endowment shared by his campus and 17 others in the state. And he expects that to drop further.

From his fourth-floor window, Faulkner also has an uneasy view of the dome of the Texas state Capitol, where legislators will meet this month to start hashing out a budget. “I think higher education will fare well in the context of the session,” he says, but he acknowledges that “that can still leave us in a difficult financial situation.”

The school, he says, needs an extra $20 million to $40 million a year to maintain buildings. The school also needs money to expand programs. “We’re trying to expand our faculty to lower our student-to-faculty ratio. It will be hard to continue doing that,” he says.

Private colleges aren’t exempt from trouble, either. The National Association of College and University Business Officers will report this month that public and private institutions recorded their second straight year of negative returns on their endowments in 2002.

Competition rises

As if the economy didn’t paint a bad enough picture, the Millennial generation’s sheer girth means students will find more competition for precious slots, especially at the nation’s top schools.

Across the country, applications continue to rise faster than openings. In Texas, between the boomlet and an effort to get more kids into college, the state expects to add a half million college students by 2015.

At UT-Austin, where anyone graduating from a Texas high school in the top 10% of his or her class is guaranteed admission, applications are up 30% over last year, according to Bruce Walker, director of admissions.

Given the surge and the school’s move to downsize, being accepted at UT-Austin is getting harder. Five years ago, students in the top half of their class generally made the cut, but now, Walker says, “if you’re not in the top quarter of your class, you have almost no chance of getting in here.”

Standards are rising elsewhere. After losing enrollment in the early ‘90s, Temple University in Philadelphia campaigned to expand its market beyond the city core. It worked, thanks in part to smart marketing and more available students, and the school this year has its largest freshman class ever. Now, 15% of freshmen have SAT scores over 1100; five years ago, 10% did.

As top schools pick students more carefully, more kids will find themselves in second-tier schools and community colleges.

In Tennessee, for example, the flagship Knoxville campus is repositioning itself as “the public university of choice for the best and brightest students,” says John Shumaker, the university president. The state, he says, “will rely on the community college system to provide the point of open access for greater numbers of students who aren’t prepared to do the work at the research university.”

The middle class “will confront more diminished choice,” Nassirian says. “The system can accommodate you. You won’t have much choice, but at least your kid is going to get a college education—and by the way, that’s going to be at a community college.”


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