Higher education institutions in the US are experiencing a ticking time bomb that will heavily affect their ability to drive profitability in the near future.
The biggest threat comes from a natural US population dip in 2025. Roughly 17 years ago, the number of children born in the US began to fall. The impact of this will start to hit higher education institutions as this year comes of age.
This drop couldn’t come at a worse time for institutions. The pain felt by staff during the COVID-19 years is seeing a great exodus of educators leaving the sector. This means that institutions are facing a double whammy of higher recruitment costs and fewer ‘traditional’ students enrolling.
Some may argue that online courses present some salvation, with higher operating costs and potential for scalability helping institutions do more with less. But fewer students on campus means fewer opportunities to sell additional services. They may not be the source to higher profits many predicted.
Enrolment decline
College enrolment numbers have been in long-term decline for years and they took even more of a hit during the pandemic. Although 2023 saw a slight increase, there is a concern that numbers will continue to drop again soon.
The chief reason for this is the number of US citizens of college-going age is expected to dramatically drop in 2025. Back in 2010, undergraduate enrolment reached its peak and then continued to drop from 18.1 million students to about 15.4 million in 2021, with experts citing changes in the country’s economic and immigration policies as well the onset of the COVID-19 pandemic.
However, it did increase slightly last year, but higher education experts are worried a significant demographic shift could send enrolment into a more intense deterioration from 2025 onwards.
Falling birth rate
There are a number of reasons for this, but one of the largest contributing factors to the country’s dwindling college enrolment is that the number of children born in the US has been shrinking for close to two decades, with the national birth rate falling by almost 23% between 2007 and 2022, dropping from 14.3 births per 1,000 people to 11.1, according to data from the CDC.
Back to the present day and the nation has a decreasing number of high school seniors preparing to go to college. This decline is why the traditional college-age population will start to noticeably drop in 2025 with that predicted to last for 12 years, according to data from the Western Interstate Commission on Higher Education.
Furthermore, there has also been a slight decline in foreign students choosing to study in the US, with 1,075,000 international students in 2019-2020 to roughly 914,000 the following 12 months, according to U.S. News and World Report.
The upsell opportunity
This leaves US colleges needing to find new avenues to make more money from their current students, while ensuring they have a fulfilling and rewarding time. Bombarding students with heavy handed advertising cheapens the experience and causes students to feel like they are just piggy banks for universities.
Institutions must adopt a more subtle and intelligent approach and proactive conversational AI may hold the answer.
By using the data that an institution has on their students, they can use this technology to contact students on campus at the exact time when they need their services.
For example, this could mean offering a range of items such as education services like extra courses and learning materials; or perhaps more general lifestyle-based products such as upgrades on meals and accommodation. There are also social elements that could targeted, e.g. events and drink offers. These can be communicated using any channel, but particularly app-based ones that the upcoming generation prefers.
AI is already prevalent in colleges and universities in the form of areas such as data collection and online support. But conversational AI from ContentEngine can actively help to make the institutions money by sending students messages to prompt them to consider extra services and products both during the course and before they start.
Our proactive conversational AI enables colleges to engage their entire customer bases in digital text- and voice-based proactive conversations. However, unlike notifications, these conversations actively seek an in-channel response, this then keeps that student engaged in a personalised conversation until the objective is fulfilled.
