Higher Education 2023: Mid-Year Update for 2022-23

At The Starting Line To A Bright Future

NAPA RESEARCH                                                                                              

As the 2022-2023 academic year began, topics of confidence in higher education and workforce relevance, higher education’s costs, university admissions practices and diversity initiatives dominated the headlines. Since then, some other important themes have garnered significant attention, such as Generative Artificial Intelligence and the U.S. Supreme Court’s intention to rule on high-profile issues in higher education, such as race-conscious admissions and student debt forgiveness.

This mid-year update spotlights the more recent headliners and summarizes the other key issues previously described. (For a deeper dive, follow the references or links in the footnotes.)

Here’s the latest:

Enrollments still down generally, but some segments ticking upward: Undergraduate enrollment continued to decline by 1.1% in fall 2022 compared to 2021, but the decline has slowed to pre-pandemic rates, the National Student Clearinghouse Research Center (NSCRC) reported once last fall’s numbers were in.

Total undergraduate and graduate enrollment combined declined 1.1% over last fall, leading to a total two-year decline of 3.2% since 2020. Undergraduate enrollment declines occurred across all sectors especially among four-year institutions, with a drop of 1.6% at public four-years; 0.9% at private nonprofits; and 2.5% at private for-profits. Declines at community colleges have slowed, with only a 0.4% enrollment loss compared to fall 2021, driven by an 11.5% jump in dual-enrolled high school students.

“After two straight years of historically large losses, it is particularly troubling that numbers are still falling, especially among freshmen,” said Doug Shapiro, Executive Director, National Student Clearinghouse Research Center. “Although the decline has slowed and there are some bright spots, a path back to pre-pandemic enrollment levels is growing further out of reach.”

A sharp decline in American birth rates that began in 2007 leading up to the 2008 recession has long predicted an abrupt drop in high school graduates in 2026[1], disproportionately impacting the enrollment at community colleges, mid-sized regional universities and small liberal arts colleges. Nathan D. Grawe, a professor of economics at Carleton College and author of Demographics and the Demand for Higher Education and The Agile College, projects over the following decade the pool of applicants for two-year and four-year institutions could contract by 10%.

Other data from the NSCRC report:

  • Graduate enrollment declined 1%, which reverses last year’s 2.7% gain.
  • Historically Black Colleges and Universities’ (HBCU) undergraduate enrollment grew 2.5% this fall, which reversed declines of 1.7% in fall 2021.
  • At primarily online institutions, where more than 90% of students enrolled exclusively online prior to the pandemic, undergraduate enrollment has grown by 3.2% from last fall. This was largely driven by younger students aged 18-20, for whom enrollment growth totaled 23.4% over two years since fall 2020.

Yet, another report shows applications are up – an increase of 46% between 2011 and 2021, in part due to more applications per student and test-optional policies. The greatest gains – highly selective institutions and HBCUs.[2]

Related – concerns over higher education’s value (see more on this elsewhere in this report) and GenZ.

GenZ, on their way to college but with definite preferences: The most diverse generation ever, Generation Z, born between 1997 and 2012, is the least likely to drop out of high school, the most likely to go to college. Creative, inclusive and tech-savvy, they seek a hands-on approach to learning. They favor education, want interactive learning experiences, prefer pragmatic majors and expect a return on their investment. Instead of state-of-the-art facilities, Gen Z would rather have access to career development, mentoring, academic advising and internships. They opt for a customizable college experience, go to college to get a job and have a strong drive to be successful. As part of that, 79% would like to participate in employer internships as part of their college experience.[3]

Generative AI: The tech conversation at this year’s World Economic Forum in Davos devoted much of its focus on the rise of artificial intelligence, particularly the text-generator ChatGPT. Under development for years, such generative AI tools have substantial implications for business – and for education. It’s already the buzz of university campuses (and K-12 schools), where educators are debating its power – from a flood of cheating to an important step in improving how writing is taught and an informational leap ahead for knowledge workers. While students and teachers “will come to use this technology to augment the writing process, not replace it,” according to Marc Watkins, a lecturer at the University of Mississippi, in Inside Higher Ed; on the other hand, others note, the writing is often formulaic and riddled with inaccuracies. Generative AI has captured the public imagination in a way that no technology has since the arrival of the iPhone in 2007, according to Axios.[4] [5]

Transparency for financial aid, finally: The move is on to standardize financial aid information after 10 major higher education organizations decided late last year to convene a task force on the topic. Following that action, the U.S. Government Accountability Office, a congressional watchdog, reported that more than 9 in 10 colleges downplay their net price or do not offer details about it in financial aid offers. This keeps students and their families guessing about how much they will end up paying.[6]

At the root of financial aid and loan forgiveness (see below) is the long-rumbling concern about the cost of a college education. Some elite universities have pledged to expand financial aid resources to include more families. Beginning fall of 2023, Princeton University, for example, has extended its “full ride” pledge to include most families earning up to $100,000. More than a quarter of Princeton undergraduates are expected to qualify. Harvard, Yale and Stanford universities have similar grants for families.[7]

Momentum also is building among a handful of conventional colleges and universities to offer three-year degrees – shortening students’ entry into the workforce and reducing cost over a traditional four-year degree. The College in 3 program, offered at 13 colleges and universities including Utica College, Indiana University of Pennsylvania and the University of Wisconsin at Oshkosh, also is seen as a way to compete for new students, particularly those who may have chosen faster-paced training programs or question the need for a college degree. [8]

All that said, the affordability of higher education is the largest barrier to attracting new students or reaching those who were once enrolled and, in a survey by New America[9], only one third of current college students and recent graduates said it was possible to get an affordable education beyond high school. Tuition has long been used as a growth strategy by colleges, contributing to an average cost increase of 175% for an undergraduate education over the past four decades.

Forgiving student loan debt, what’s next? Student loan forgiveness keeps center stage

President Biden has been trying to forgive $10,000 of student loan debt for individuals/families earning up to $125,000, but lawsuits continue to block the implementation. Now the U.S. Supreme Court is expected to hear the case in February. Observers are skeptical that the court will grant unilateral debt forgiveness since conservatives argue that it is financial reckless and burdens taxpayers who did not attend college.[10]

Race-conscious admissions policies, also before the Supreme Court

Long-simmering legal challenges to policies at Harvard University and the University of North Carolina at Chapel Hill will be reviewed by the high court, perhaps even stricken down after years of debate, again due to the conservative majority. For years race has been used as one metric that has led to more diverse student bodies. Practically speaking, most institutions still accept a majority of applicants but the concern is the signal that would be sent to historically marginalized applicants and a potential roadblock to the increasingly mainstream acceptance of campus diversity. A ruling that would either restrict or prohibit race as a consideration could fundamentally reshape college admissions in the coming years.[11] [12]

Beyond financial need, an increase in student diversity has increased the need for diversity, equity and inclusion (DEI) efforts on campus – an effort alumni can play a key role in supporting.[13] Institutions are increasingly being held accountable by alumni and students for broadening their diversity initiatives on campus and in alumni programming. For example, Brown University is focused on expanding alumni engagement in career development and mentorship programs and continues to gather feedback from historically underrepresented and diverse alumni to share with university leadership, faculty and administrators. At Yale, initiatives include increased partnerships between alumni identity groups and their counterparts on campus, such as student organizations and cultural houses to help create mentorship for underrepresented student groups and increase networking and alumni support for first-generation, low-income students. Cornell University’s efforts center on helping coordinate the work of its diverse alumni associations, which maintain independent alumni volunteer boards; organizing engagement events; conducting fundraising initiatives to support diversity programs on campus; growing dynamic diverse alumni community to further inclusion; and working closely with the university’s on-campus diversity offices and programs to engage alumni in their work.

U.S. News & World Report rankings on the way down? Will the departure of prominent law schools, such as Yale’s and Harvard’s, from participating in US News rankings lead to a similar movement among undergraduate colleges. The magazine has dominated the rankings field for decades but also have been under fire for overweighting reputation, wealth and exclusivity over quality. The unease about US News isn’t entirely one-sided. Last year the magazine kicked out several institutions for allegedly misreported data.[14] Stay tuned…

Graduate Student Unions on the way up? Groups in higher education are forming unions at rates higher than most industries, and one of them, graduate students, are winning results. The recently settled strike across the University of California system joined grad students, postdocs and academic researchers secured major pay increases, making them among the best paid in the country. Recently students at Yale and Boston University voted to unionize. “This is absolutely a moment for grad-worker organizing and just for labor in general,” said Sara Bowden, co-chair of the Northwestern University Graduate Workers, an organization also seeking union representation. “This really does feel like the start of a new chapter.”[15]

Key Trends summarized from the Fall 2022 Report (read the full report in The Napa Group’s Insights blog https://napagroup.com/2022/08/higher-education-2022-top-trends-update/)

Building tomorrow’s workforce: many employers, and not just in technology, are reconsidering longstanding requirements for a four-year degree.[16]

  • While 95% of chief academic officers rate their institution as very/somewhat effective at preparing students for the world of work, only 11% of business leaders strongly agree that graduating students have the skills and competencies their businesses need and only 13% of Americans strongly agree that college graduates in this country are well-prepared for success in the workplace.[17]

And to illustrate the challenges facing employers in today’s post-pandemic economy, the State of Maryland announced last March that it would no longer require applicants to have a degree for many state jobs and a number of companies are starting their own bootcamps and training programs while colleges are seeing their enrollments decline, the report documents. Yet, for most Americans, a college degree does pay off.[18] According to the Georgetown University Center on Education and the Workforce, those with bachelor’s degrees earn a median of $2.8 million over their careers, 75% more than those with only a high school diploma. “This isn’t the first time Americans have questioned the value of higher education,” said Anthony P. Carnevale, a research professor and director of the Georgetown University Center on Education and the Workforce. “This rhetoric that you don’t need to go to college has been a persistent problem in the United States,” he said, and it tends to resurface during recessions.

Confidence in higher ed still dropping: According to a survey conducted by New America[19], public confidence in higher education’s ability to lead America in a positive direction has fallen 14 percentage points since 2020 (69% in 2020, down to 55% in 2022). A survey conducted by Public Agenda/USA TODAY Hidden Common Ground[20] had similar findings. Today’s generation of students wants more evidence that what they pay for college will matter, said Stella M. Flores, an associate professor at the University of Texas at Austin, but colleges are not getting that message across.

To help counteract enrollment losses, colleges will need to recruit and retain the very students they’ve historically struggled to attract, including students from low-income and minority backgrounds. [21] College graduation rates for Americans in the lowest income brackets have barely budged over the last 50 years. Although nearly half of all undergraduates are now students of color, achievement gaps remain. During the pandemic, the share of students coming from high-poverty high schools or those with large minority populations dropped sharply, and many of these students have been slower to return to college.

Additionally, a focus on adult learners as a potential pool of candidates could yield enrollment gains. There are roughly 39 million Americans who have attended college but left without a degree. According to the Gallup and Lumina survey, some of these former students may be open to returning. The survey found that 56% of one-time students who stopped out before the pandemic would be open to re-enrolling. Similarly, 40% of adults surveyed who had never attended college said they would consider going to college. Among the unenrolled, associate degrees and short-term credentials are the most considered degree/program. Based on data from McKinsey & Company, companies looking to upskill or reskill the technology capability of their workforce through continued learning opportunities and certificate programs as part of the Fourth Industrial Revolution may present additional opportunities for adult learners. [22]

Reforms creating pathways to student success: With the pressure on American colleges and universities to deliver tangible results, the World Economic Forum has identified four education trends and reforms[23] that will reap greater rewards for student success:

  1. Accelerated by the COVID-19 pandemic, there is a shift in online learning from “learn from anywhere” to a “learn from everywhere” approach. This reform incorporates both flexibility and immersion, allowing students to participate in experiential learning and apply concepts learned in the classroom out in the real world.
  2. A move towards “fully active learning,” versus traditional lectures, incorporates spaced learning, emotional learning and the application of knowledge. At Paul Quinn College, an HBCU in Texas, fully active learning was combined with internships at regional employers. Focused on learning outcomes, the strategy has given students from traditionally marginalized backgrounds the opportunity to apply the knowledge gained in the real world.
  3. Universities must trend towards teaching skills that remain relevant in a changing world. According to a recent survey, 96% of chief academic officers at universities think they are doing a good job preparing young people for the workforce. Only 41% of college students and 11% of business leaders share that opinion. At Minerva University in San Francisco, competencies such as critical thinking or creative thinking are broken down into foundational concepts and taught across all disciplines, regardless of major.
  4. Move toward the use of formative assessments instead of high-stake exams when evaluating students. Continuing the trend prior to COVID-19 and accelerated during the pandemic, many American universities, with Harvard leading the way, are replacing high-stakes standardized exams with other measures to assess and improve learning outcomes. Formative assessment, which combines formal and informal evaluations throughout learning, encourages students to improve their performance rather than just have it evaluated.

Higher education institutions also have an opportunity to more clearly identify and remedy student outcomes and success through the use of data and advanced analytics, per a report by McKinsey & Company. With more nuanced information, universities are better able to target students who could benefit from additional support.[24]

The changing “career center”: To extend student success beyond the classroom and as colleges and universities seek to become more relevant to all their constituencies and engage them in lifelong relationships, the traditional “career center” is undergoing a major redesign. Key drivers of this organizational shift are the evolving needs and expectations of the “student consumer,” the dynamic realities of the job market and the demand by business for “skills-ready” employees.

Several institutions have differentiated themselves by adapting their strategies and positioning themselves for leadership in this competitive space. The evolution of university “life pathways,” involving students and alumni over the course of the “60-year curriculum” and with career preparation as a core element, is one such example.

“We have a responsibility to position graduates to thrive in their fifth and sixth jobs and also to secure that crucial first job,” said William & Mary President Katherine A. Rowe in October 2021 in announcing plans to create funded internship opportunities for all students by increasing outreach to alumni, parents and friends, and current and future employers.

History documents “unambiguously,” according to The Great Upheaval: Higher Education’s Past, Present and Uncertain Future by Arthur Levine and Scott Van Pelt, that “since the earliest universities, students have come to college to prepare for jobs…The dichotomy between education for personal enrichment and education for participation in society, including the labor market, has always been a false one.” The authors suggest a “career center ‘on steroids’” from day one for students through postgraduation.[25]

Industry partnerships – a more promising resource for research funding: University-industry collaboration goes back to the 1970s and over the past few decades, 11,000 companies were started at universities, according to VentureWell, an organization facilitating such relationships.[26]

Today, with fewer federal dollars available for scientific research, industry is increasingly seen as the resource for research funding and the experience to commercialize a product, while universities have the talent to invent, develop and test products. Not only do students gain career preparation and jobs, companies are competing for graduates who understand emerging markets and often have acquired expertise and skills prior to starting work. From a university marketing perspective, students also are looking for universities with track records for job placement.

What matters to a business is not outcomes but impact – how the new knowledge from a collaboration with a university can contribute to a company’s performance, according to quantitative and qualitative data collected at 25 research-intensive multinational companies from a variety of industries and involving more than 100 university projects they sponsored. Published in Sloan Management Review[27], the study also noted that university projects often fail to translate into tangible impacts for the companies involved and proposed seven “best practices” to bridge this outcome-impact gap.

Is the university building boom over? Shrinking enrollment and demographic shifts over the last decade – and accelerated by COVID-19 – have left many colleges with more space than they need or can afford. While the cumulative capacity of American colleges grew by 26% between fiscal years 2009-2019, enrollment increased by only 3%. The annual cost of carrying the resulting three million to five million excess seats, and extra personnel, could be as high as $50 billion. [28] While instances of colleges substantially shrinking their footprints remain rare – and some colleges continue to build new facilities to differentiate their campuses among prospective students – the scaling back or rethinking of space is a common topic. At the University of Missouri, nine aging buildings were identified for demolition that won’t be replaced. Reducing nearly one million square feet of facilities space saves $94 million in deferred-maintenance costs and $2.5 million in annual operating expenses. Strategies being deployed by colleges to reduce space and associated building and maintenance costs include selling buildings not strategically close to campus and renovating or creating space to be more flexible and dedicated to more active and engaged learning.


[1] Karin Fischer, “The Shrinking of Higher Ed,” The Chronicle of Higher Education, August 12, 2022 – https://www.chronicle.com/article/the-shrinking-of-higher-ed
[2] Where Applications to College Have Swelled During the Past Decade, Chronicle of Higher Education, 1/12/23.
[3] Gen Z: More Likely to Go to College, Pearson Accelerated Pathways, 5/26/22 – https://www.pearsonaccelerated.com/blog/gen-z-more-likely-to-go-to-college/?utm
[4] “Friend or foe? Teachers debate ChatGPT,” Axios.com, 1/13/23 – https://www.axios.com/2023/01/13/chatgpt-schools-teachers-ai-debate?stream=top&utm
[5] “AI and the Future of Undergraduate Writing,” Chronicle of Higher Education, 12/13/22 –https://www.chronicle.com/article/ai-and-the-future-of-undergraduate-writing?cid=at&source=ams&sourceid=&utm
[6] “7 Higher Ed Trends to Watch in 2023,” HigheredDive.com, 1/4/23 – https://www.highereddive.com/news/7-higher-education-trends-to-watch-in-2023/639131/?utm
[7] Nick Anderson, “Princeton to cover all college bills for families making up to $100,000,” The Washington Post, Sept. 8, 2022.
[8] Jon Marcus, “Momentum builds behind a three-year degree to lower college costs,” The Washington Post, April 15, 2022 – https://www.washingtonpost.com/education/2022/04/15/college-three-year-degree/
[9] Karin Fischer, “Americans’ Confidence in Higher Ed Drops Sharply,” The Chronicle of Higher Education, July 26, 2022 – https://www.chronicle.com/article/americans-confidence-in-higher-ed-drops-sharply
[10] HigheredDive, Ibid.
[11] HigheredDive, Ibid.
[12] “Supreme Court Will Hear Challenge to Affirmative Action at Harvard and UNC,” The New York Times, 1/24/23 – https://www.nytimes.com/2022/01/24/us/politics/supreme-court-affirmative-action-harvard-unc.html?utm
[13] Mariah Stewart, “Alumni Can Play Key Role in Supporting Campus Diversity, Equity and Inclusion,” Insight Into Diversity, Sept. 17, 2021. https://www.insightintodiversity.com/alumni-can-play-key-role-in-supporting-campus-diversity-equity-and-inclusion/?utm
[14] HigheredDive, Ibid.
[15] Graduate Students Win Pay Raises as Union Efforts Surge, Chronicle of Higher Education, 1/12/23 – https://www.chronicle.com/article/graduate-students-win-pay-raises-as-union-efforts-surge?cid=db&source=ams&sourceid=&utm
[16] “Building Tomorrow’s Work Force,” The Chronicle of Higher Education, September 2022.
[17] Ibid., Chronicle of Higher Education.
[18] Adrienne Lu, “Is College Worth It? Biden’s Loan-Forgiveness Plan Puts the Debate in Overdrive,” The Chronicle of Higher Education, Sept. 9, 2022 – https://www.chronicle.com/article/is-college-worth-it-bidens-loan-forgiveness-plan-puts-the-debate-in-overdrive
[19] Karin Fischer, “Americans’ Confidence in Higher Ed Drops Sharply,” The Chronicle of Higher Education, July 26, 2022.
[20] “Americans Question the Value of Higher Ed, but Overwhelmingly Agree on Solutions to Improve Access, Equity, and Affordability,” Public Agenda, July 2022 – https://www.publicagenda.org/newsroom/new-public-agenda-report-americans-question-the-value-of-higher-education/
[21] Karin Fischer, “The Shrinking of Higher Ed,” The Chronicle of Higher Education, August 12, 2022 -https://www.chronicle.com/article/the-shrinking-of-higher-ed
[22] “The Fourth Industrial Revolution will be people powered,” McKinsey & Company, January 2022 – https://www.mckinsey.com/capabilities/operations/our-insights/the-fourth-industrial-revolution-will-be-people-powered
[23] “4 trends that will shape the future of higher education,” World Economic Forum, Feb.7, 2022 -https://www.weforum.org/agenda/2022/02/four-trends-that-will-shape-the-future-of-higher-education/
[24] “Using machine learning to improve student success in higher education,” McKinsey & Company, April 7, 2022 – https://www.mckinsey.com/industries/education/our-insights/using-machine-learning-to-improve-student-success-in-higher-education
[25] Arthur Levine & Scott Van Pelt, The Great Upheaval: Higher Education’s Past, Present and Uncertain Future, Johns Hopkins University Press, 2021.
[26] “Industry and university collaboration: how partnership drives innovation,” VentureWell, Sept. 17, 2019.
[27] “Best Practices for Industry-University Collaboration,” Sloan Management Review, Summer 2010.
[28] Lee Gardner, “The Overbuilt Campus,” The Chronicle of Higher Education, February 11, 2022 – https://www.chronicle.com/article/the-overbuilt-campus?cid2=gen_login_refresh&cid=gen_sign_in