(Published : Jan 27, 2023 – 05:30)
On a recent afternoon walk, I ran into a neighbor teaching at a nearby state university. We got to talking about work and she said that “big cuts are coming” because of “demographic crisis.” I had heard that universities in the US had suffered a drop in enrollment during the COVID-19 pandemic but had assumed they would recover to pre-pandemic levels soon.
What my neighbor referred to as “demographic crisis” is more than just demographics. Compared to other advanced countries, the US fertility rate is slightly above average. It is still below the replacement rate, but the US makes up for the difference through high levels of immigration. In 2022, 1,023,200 people became naturalized citizens of the US, the third-highest number in history. This has kept the rate of aging in the US below that of many other countries.
Though the overall population continues to grow, the sharp drop in the fertility rate around 2010 will cause a noticeable drop in high school graduates starting in 2028 and beyond. The fertility rate has remained steady since then, but demographers do not expect it to return to pre-2010 levels.
An increase in international students could help make up some of the difference. After all, US universities have long attracted the most international students in the world. In 2017, however, international students started to decline and dropped sharply during the pandemic. Numbers have since recovered somewhat but growing tensions between the US and China combined with China’s own demographic challenges do not bode well for a return to pre-pandemic levels soon.
These two trends — the drop in high school graduates combined with a steady decline in international students — pose challenges for US universities, particularly smaller private institutions. State universities receive government support, but that will fall as enrolment declines. Only private and state universities that have global brand power will continue to attract students through highly competitive admissions.
The pandemic exacerbated a third trend: University is losing its popularity among Gen-Z. Unlike Millennials before them, Gen-Z is wary of going deeply into debt to pay for university. The long closures of universities during the pandemic have left Gen-Z questioning the value of a university education, both from a career and a social perspective. Questions about the value of university have also begun to cause a drop in graduate students pursuing professional degrees.
Taken together, these trends have the making of the “demographic crisis” my neighbor worries about. Of them, the third trend is more worrisome because it suggests a sea change in social attitudes toward a university education. Universities can gradually downsize to meet the realities of the first two trends, but the third trends suggests that they need to implement deep reforms to change institutional culture.
Universities around the developed world are facing similar, if not greater, problems. South Korea is a prime example. With one of the lowest fertility rates in the world, the high school graduates will continue decline until they hit bottom at a low number. Most international students come from China, but numbers are set to decline. Students from other countries could replace some, but probably not all, of the loss.
Despite these trends, tertiary degree attainment (two-year degree or higher) in South Korea between people aged 25 and 34 was 69 percent in 2015, the highest in the world. Among this age group, 47 percent had four-year degrees, the fourth highest in the world. Much of this reflects the traditional “zeal for education” as a way for social advancement.
But like their American Gen-Z counterparts, young Koreans are increasingly questioning the value of a traditional university education. The financial burden on students is less than in the US because parents pay tuition, but students still feel a mismatch between what is taught in university and what helps them in the job market. To make up for the gap, students find ways outside the university to gain the skills they need.
To remain relevant and to survive, universities in South Korea and elsewhere will need to reform themselves to create a new institutional culture that meets the needs of students in 2023 and beyond. For this to happen, universities need to reimagine where and how learning takes place. Technology has changed how people interact, how they learn, and how they work. Young generations live in a world that mixes the physical with the digital. Everything has changed, and universities need to embrace this hard reality.