Higher ed bubble introduces uncertainty for UTM’s future

The thing about bubbles is, they always burst. The growing bubble in higher education is no exception.

According to the U.S. Census Bureau, 33.4 % of Americans 25 or older have degrees.

Whether this seems like an achievement or shortcoming, it’s too many. An enrollment bubble is about to pop as degrees are in less demand and a decline in college enrollment is beginning to show.

So, what is the enrollment bubble? It’s the theory that student enrollment to higher education/four-year institutes is about to drop substantially. This is similar to how housing prices declined dramatically from 2007-2009 and caused the 2008 housing crash.

Meanwhile, colleges, including UTM, are relying on a continual growth in enrollment for years to come. This combination of factors is already challenging colleges to stay in business and turn a profit which will only get difficult in time.

The Chronicle of Higher Education reports that more than 1,200 college campuses have been closed in the past five years. In the past three years, four colleges in Tennessee have closed according to the Tennessee Higher Education Commission. Why is attendance going down? And why are colleges and institutes of higher education closing across the country? There are several factors.

The primary reason is less demand for people with college degrees. Wait, aren’t there more and more jobs integrating complicated technologies daily? Yes, but even technology leaders like Apple, Google and IBM no longer require degrees for their employees. Having a degree doesn’t guarantee an employee will be helpful for the company and this trend is showing.

Skilled jobs not requiring degrees are in high demand and are often higher paying. Because so many students are encouraged to go straight to college, blue-collar jobs are being passed up. As an example, electricians, a trade in high demand, received an annual mean wage increase of 4.33% last year, earning an average of $77,770 each year according to Forbes.

Also, fewer people are headed to college because of low birth rates in the US and reduced immigration under the Trump Administration. According to a study by the InsideHigherEd.com, “New enrollments of international students fell by 6.6% at American universities in academic year 2017-18 compared to the year before.”

How is UTM going to be affected by this bubble with so many indicators suggesting it will occur? 

UTM has had growth in enrollment three consecutive years which shows promise compared to the average drop of 0.9% at other universities.

Yet, we are going in the wrong direction for the bubble. UTM is constructing the Latimer Science Building, which estimated at $65 million and another $6.5 million for the Innovation and Product Realization facility. Despite the fact that UTM is doing well right now, trends indicate that enrollment will go down, and we’re building space for students who won’t come.

While UTM is positioned well for the enrollment bubble to pop and is hoisted up by federal funding as a public university, in the coming years there will be more seats and less students to fill them.

Photo Credit / University Relations