Enrollment in education after high school peaked in 2010, with 21 million students enrolling in two-or four-year degree programs that fall. Since then, enrollment has steadily declined, and even projections that predict a modest increase in the coming years top out at 20 million enrollees in 2031. The steepest declines in enrollment were seen at two-year colleges, where enrollment dropped by more than one-third between 2010 and 2020.

People hold a variety of theories as to why this is happening, and there is probably at least a bit of truth in each of them. But one thing most people agree is that this is a big problem, for higher education and for our nation.

Fortunately, most people are wrong on this one. Declining enrollments may be disruptive, and they will cause more pain for some than others. Overall, however, the falling demand for higher education is going to bring about positive change for students, taxpayers, and even universities.

Let’s start with the boring part. A big reason why enrollment is declining is demographics. Growth in the population of potential college students has declined thanks to diminishing birth rates across the board, and this decline is expected to accelerate in coming years. This trend may ultimately cause enrollments to fall, but so far it’s only been enough to slow the rate of growth in enrollment. This suggests there are other factors at play. Nonetheless, colleges and universities will have to wrestle in the coming years with the fact that even if they address other causes of decline, they’re going to have to adjust to smaller year-over-year growth in enrollment (and, perhaps in the near future, shrinking class sizes).

In economic terms, we can very generally describe what else has happened as a fall in demand. People are simply less interested in going to college. Understanding why that is so is a tougher question. The truth is that it’s pretty hard for researchers to really know exactly why. Popular theories include a growing skepticism about the value of college (perhaps driven by the left’s eager ambition to cancel student debt and the attendant horror stories of middle-age adults still owing tens of thousands of dollars, or young humanities doctorates unable to find work after six-figure investments) and a variety of financial barriers to enrollment. Most convincing to this economist, however, is that people are simply beginning to realize that a college degree—any college degree—is not a golden ticket to the American dream. In fact, a growing number of college degree programs are leaving students worse off financially than when they started.

Research conducted by Preston Cooper, an economist and friend, shows that a large number of programs of study are not “paying off” for graduates. Surveying nearly 30,000 bachelor degree programs, he found that 28 percent of programs left students worse off economically than when they started, generating negative returns on investment. Students who graduate from career-oriented majors tend to do just fine, whereas those in more open-ended majors seem to struggle more. For example, Cooper shows that 4 in 5 engineering programs have ROI above $500,000, but the same is true for just 1 percent of psychology programs.

And this only accounts for students who actually graduate. Students who attend university for a period of time, often going into thousands of dollars in debt, but subsequently drop out are left high and dry. This population is quite large: Only 63 percent of full-time American students who enroll in an undergraduate program graduate in six years.

I tend to believe that the pull-back in demand for college is an appropriate reaction to an over-celebration of college degrees that led people in recent generations to make investments in their education without appreciating the trade-offs they were making. For a generation now, political and cultural leaders have made young people feel as though college is the only pathway to success. In doing so, young Americans have been made willing to “sign on the dotted line” whatever price their college or university charges. When you’ve been told that it’s the only way, you’ll do whatever it takes to make it work. Even if it means paying a price that will never be financially worth it, even in the long run. 

Meanwhile, half of the American workforce has built lives and families working in jobs that don’t require a degree. I hope that as young people turn away from traditional higher education, they take inspiration from the paths that these workers took to develop their skills and build careers. While they are less celebrated by society, pathways toward careers in the trades are often more lucrative than more academically oriented degrees.

While the higher education sector will ultimately benefit from these pressures that cause creative destruction, the pain of closing programs, majors, or even entire colleges and universities should not be discounted. Research shows that universities play a critical role in local economies and can often serve as a buffer to other types of economic shocks. Communities built around institutions that must ultimately close will pay a price.

Of course, closing campuses also raises the question of whether all Americans, especially the most economically disadvantaged, will still have access to colleges and universities in their communities. It will never be sustainable for all Americans to live within commuting distance of a college or university, unfortunately. But this matters less today than ever before, with online education providing more and higher quality options. A community without a brick-and-mortar campus is no longer cut off from the opportunities that higher education can provide.

The next decade will present a reckoning for American higher education. In addition to declining enrollment and potential student loan reform, colleges will continually be forced to defend themselves against (not entirely misguided) claims that they are ideologically captured and enthralled by radicalism.

Despite the painful trade-offs that will inevitably need to be made, we will be better off if we address the underlying crisis driving declining interest in higher education: the declining value of many degree programs. Higher education, the golden child of the movement to advance social mobility, has rested on its laurels and failed to incorporate innovations that will better serve students and our nation.