Colleges and universities in the U.S. have experienced a significant decline in enrollment since the 2010 peak. Data from the National Center for Education Statistics (NCES) show that undergraduate enrollment in degree-granting institutions dropped from an all-time high of about 18.1 million students in 2010 to 15.4 million in 2023, the most recent year of available data—a loss of 13%. This decline accelerated during the COVID-19 pandemic, with 1.2 million undergraduates lost between 2019 and 2022, accounting for over half of the total decline since 2010. Although national enrollment has partially rebounded from pandemic lows, it is likely to fall further largely due to the continued decrease in the number of U.S. high school graduates and first-year college students.
This enrollment contraction translates to roughly 2.3 million fewer students on college campuses compared to 2010, and it has affected virtually all types of institutions. For-profit colleges experienced the steepest declines, with many closing after federal crackdowns on predatory programs, while community colleges shrank by about 40% from their 2010 peak. Even many four-year public and private nonprofit institutions have struggled, though elite and highly selective universities remain insulated thanks to their extensive applicant pools.
According to the Brookings Institution, more than 100 colleges closed between the 2022–23 and 2023–24 academic years, though many were small schools or merged into other institutions. The ripple effects extend far beyond campuses. Higher education directly employs nearly 4 million people, meaning each closure results in job losses and economic disruption. These contractions also reduce demand for student housing in affected regions. In short, the decline in college enrollment is not just an education story but also an economic one.
A closer look at incoming students reveals troubling signs: fewer high school graduates are enrolling in college immediately, leading to smaller freshman classes. The U.S. “immediate college enrollment rate,” the share of high school completers who go straight to college, peaked at 71% in 2009 but fell to 62% by 2022, the lowest level in decades. In other words, only about three in five recent graduates now head to college. Freshman enrollment in fall 2023 dropped to roughly 2.9 million nationwide, a 17% decline from the 2010 peak of 3.2 million. Analysts partly blame the flawed rollout of the federal FAFSA in 2023, which may have deterred students from matriculating. While the National Student Clearinghouse reports that overall undergraduate enrollment has stabilized somewhat post-pandemic due to stronger retention and more high school students, the pipeline of new freshmen has clearly weakened.
Demographics remain the primary driver of declining enrollment. The number of young Americans reaching college age is smaller than in past years, a result of falling birth rates that began with the 2008 Great Recession. The high school graduating class of 2025 is expected to be the last of a relative “boom,” after which the number of 18-year-olds nationally will fall off a “demographic cliff.” Census projections show another sustained downturn beginning in 2033 after a brief post-2025 uptick, leaving 15% fewer 18-year-olds by 2039 than today. Similarly, the Western Interstate Commission for Higher Education (WICHE) forecasts a 13% decline in annual high school graduates by 2041—nearly half a million fewer per year. In short, the traditional college-aged population is shrinking and creating strong headwinds for enrollment.
Demographics are not the only factor. Public confidence in the value of a degree has eroded, with a recent Pew survey finding that only one in four Americans view a bachelor’s degree as “extremely or very important” for career success. Rising tuition and student debt have fueled doubts, while tech companies dropping degree requirements and the growth of alternative career pathways have reinforced skepticism. The rapid advance of artificial intelligence is further influencing choices, as many young adults now bypass college to enter the workforce directly, using AI tools and online learning to gain skills quickly. This makes immediate workforce participation a faster, less costly path to career success.
International enrollment has also declined. Colleges have long relied on foreign students to offset domestic losses, but that pipeline has weakened in recent years due to U.S. policy changes, geopolitical tensions, and the pandemic. Stricter visa rules, anti-immigration rhetoric, and travel bans curtailed decades of steady growth, and renewed visa limits continue to discourage applicants. This downturn removes what had been a crucial growth engine, compounding demographic challenges and leaving many institutions, particularly in coastal Gateway markets in the Northeast and West, facing steeper enrollment cliffs and budget shortfalls.
In sum, a “perfect storm” of shrinking youth cohorts, waning confidence in college, rising costs, immigration limits, and technological disruption has driven U.S. enrollment downward. Without intervention, these trends are likely to persist. However, the decline is uneven, and regions such as the Sun Belt continue to see enrollment growth, highlighting where opportunities remain despite national headwinds.
Nationwide averages hide striking regional divergences. Some parts of the country are weathering the enrollment decline far better than others, with a few even growing their student populations. Generally, the Northeast and Midwest are facing the worst declines, while the South and parts of the West are faring relatively better. This reflects underlying demographic shifts, with populations in the Sun Belt rising, bolstered by domestic migration and higher birth rates, whereas the Northeast and industrial Midwest have seen youth populations stagnate or shrink. These trends are poised to continue into the future, creating enrollment “winners” and losers by region.
Projections of high school graduates highlight a sharp regional divide. The U.S. Department of Education projects about a 5% drop in the number of new high school graduates nationwide by 2031. WICHE’s state-by-state forecasts show that 38 states will produce fewer high school graduates in the 2030s than they do today. However, this decline is not uniform across states and is more severe primarily in the Northeast and Midwest.
The only states expected to buck the trend are mostly in the Sun Belt and Mountain West. WICHE data projects that Tennessee, South Carolina, and Florida will increase their number of high school graduates by more than 10% by 2041, driven by in-migration and higher fertility rates. By contrast, California and New York are expected to see roughly 30% fewer graduates, with many other Northeastern, Western, and Midwestern states experiencing similarly steep declines.
These demographic realities are already reflected in college enrollment patterns. States with growing youth populations or strong in-migration are seeing stable or rising enrollments, while others continue to contract. From 2019 to 2024, Idaho (+21%), Maine (+14%), and Arizona (+14%) posted the fastest growth, with the Sun Belt showing the broadest strength—North Carolina, Kentucky, Virginia, Georgia, Texas, and Oklahoma each rose 7% to 9%.
In contrast, the Midwest and most of the Northeast struggled. West Virginia (–46%), New Hampshire (–68%), and Utah (–24%) saw the steepest losses, while Minnesota, Nebraska, and Alaska each declined more than 10%. Even large student markets like Ohio, Oregon, and Michigan experienced modest drops. However, Pennsylvania, Indiana, Illinois, and North Dakota were outliers, posting gains above 5%. Overall, the data reveal that while much of the Midwest and Northeast are contracting, student demand is still expanding in the Sun Belt, Mountain West, and select areas of the Great Lakes region.
Student migration patterns further reinforce this regional shift. In many high-decline states, a significant share of local high school graduates leave to attend college elsewhere, often heading south or west. Roughly 50% of New Hampshire’s college-bound students enroll out-of-state, creating a major “brain drain” that has driven the state’s steepest-in-the-nation enrollment drop over the past five years. Vermont experiences a similar trend, with about 55% of students leaving the state, contributing to an 8% enrollment decline since 2019.
Many students are choosing institutions in the Sun Belt and select Mountain West hubs that pair strong quality-of-life amenities with aggressive out-of-state recruitment. Colleges in Arizona, Alabama, Kentucky, and Idaho have used tuition discounts and targeted marketing to draw students from the Northeast and Midwest. Public universities in the South, including the University of South Carolina, University of Mississippi, and University of Arizona, have invested heavily in campus redevelopment and high-end student housing to attract students from other regions.
Several “destination” schools in warm climates with prominent athletic programs now operate near capacity, drawing students nationally as well as locally. In contrast, many Midwestern and New England states face shrinking youth populations and lower enrollment, compounded by less favorable climates and fewer lifestyle amenities. The gap between thriving Sun Belt college towns and struggling Rust Belt or New England communities is widening as enrollment shifts south and west.
For student housing developers and investors, these regional trends carry clear implications. In a period of overall enrollment decline, the best opportunities lie in states where student populations are growing or at least stable. The Sun Belt, along with select Mountain West hubs, stands out. Strong demographics, in-migration, and aggressive recruitment have made these regions bright spots for enrollment. States like Florida, Tennessee, and the Carolinas are projected to see more than 10% gains in high school graduates through 2041, compared with a national decline. Idaho and the Dakotas are expected to post similar growth and are standouts in the Mountain West. These trends are already driving major student housing and campus expansion projects in college towns such as Tallahassee, Knoxville, Columbia, Tempe, and Boise, where demand is outpacing supply.
By contrast, many states in the Midwest and Northeast face shrinking high school cohorts and elevated out-migration. Campus downsizing, mergers, and closures are likely to continue in hard-hit states like West Virginia, Minnesota, Utah, and several in New England. Student housing properties in these regions face heightened risk of declining occupancy and rents as freshman classes shrink year after year. Dozens of small private colleges in the Northeast have already closed or merged, and public university systems in Pennsylvania and West Virginia have consolidated campuses and cut programs.
In summary, the next decade will reshape the U.S. higher education landscape, marked by overall contraction but punctuated by growth in select regions. For every small private college closing in New England or Midwest university consolidating programs, there will be universities in Florida, Arizona, or the Carolinas setting enrollment records. Demographics, migration, and shifting student preferences are redrawing the map of higher education. Stakeholders who understand these dynamics will be best positioned to adapt. Overall, the next decade will test the agility of institutions and investors, with geography playing a decisive role in where to focus.
