Have You Really Fallen Over the Enrollment Cliff?

Many colleges blame the “enrollment cliff” for declining enrollment, but demographics alone rarely explain institutional distress. The enrollment cliff is real: according to a study by the Western Interstate Commission for Higher Education, the number of U.S. high school graduates is projected to have peaked around 2025 and then to decline approximately 13% through 2041. The Midwest and Northeast are among the regions most affected.

Successful institutions show that enrollment decline is often less a demographic problem than a strategic problem. The institutions most at risk are typically those that have failed to adapt their business model, academic portfolio, market positioning, retention strategy, and pricing strategy.

Why Do Many Colleges and Universities Fall Over the Cliff?

Lack of Clear Institutional Differentiation

Many struggling colleges and universities are essentially interchangeable. Students and families increasingly ask: Why your school? Why pay this price? And perhaps most importantly, what careers will result for my student? Colleges that cannot clearly answer those questions lose market share.

Academic Programs No Longer Match Students’ Demand

Many institutions continue offering programs with declining student demand while underinvesting in growing fields. They have too many majors and minors, low-enrollment programs, outdated curriculum, and limited career pathways.

Excessive Dependence on Traditional 18-Year-Olds

Many colleges and universities remain heavily dependent on a shrinking population of recent high school graduates. This narrow enrollment model increases exposure to demographic decline while leaving other potential student populations largely untapped.

Weak Student Retention

Recruiting more students cannot compensate for poor retention. At-risk institutions often invest heavily in attracting new students while losing too many of those already enrolled, causing classes—and tuition revenue—to shrink year after year.

Unsustainable Tuition Discounting

Tuition discounting has grown unsustainably, driving a race to the bottom, with many discount rates now in the 55%-65% range. Significant discounting severely damages your brand and confuses students and their parents.

Short- and Long-Term Strategic Corrective Actions

Cost cutting may buy time, but long-term sustainability requires growth. Institutions should consider both organic strategies that strengthen enrollment and revenue and inorganic strategies that create new opportunities through collaboration.

Organic Growth

Strengthen your market position. Sharpen your brand, differentiate the student experience, strengthen employer connections, and ensure your value proposition reflects your mission.

Align programs with demand. Review the academic portfolio, grow high-demand and interdisciplinary programs, and consolidate programs with persistently low enrollment.

Diversify enrollment. Expand beyond traditional-age students to reach adult learners, degree completers, transfers, veterans, corporate learners, and online students.

Improve retention. Use early alerts, intensive advising, financial literacy, and career coaching to help more students persist and graduate.

Focus on net tuition revenue. Understand program margins, strengthen financial aid packaging, evaluate pricing strategies, and clearly communicate career outcomes and return on investment.

Inorganic Growth

Explore strategic partnerships. Identify opportunities to share resources, expand capabilities, reach new markets, or strengthen programs through collaboration.

Consider affiliations and mergers. Evaluate whether a deeper relationship with another institution could strengthen mission, financial sustainability, or competitive position.

Act before options narrow. Explore potential partners from a position of strength rather than waiting until financial pressures dictate the available choices.

See what this can look like in practice. Facing enrollment declines, Roosevelt University acquired Robert Morris University-Illinois, adding approximately 1,200 students and helping fuel four years of enrollment growth.
Read the case study →

AGB experts can help you tackle these challenges.

AGB can help your board and senior leadership assess your financial runway and determine the right mix of organic and inorganic growth strategies. Our experienced consultants help institutions evaluate options, align stakeholders, and move from analysis to action.

Let’s start the conversation.