For decades, higher education institutions have relied on a steady pipeline of students to maintain financial stability. But that pipeline is beginning to dry up. In fall 2023, undergraduate enrollment in the U.S. declined by 1.2%, continuing a troubling trend that began before the COVID-19 pandemic.
Since 2010, total college enrollment has fallen by over 4 million students (National Student Clearinghouse, 2024).
This downward trend marks the dreaded enrollment cliff—a sharp drop in the number of traditional college-age students due to declining birth rates after the 2008 recession.
According to a recent study by the Western Interstate Commission for Higher Education (WICHE), the total number of high school graduates in the United States is expected to peak in 2025 and then decline steadily through 2041. This decline is projected to be as much as 13% from the peak through the end of the projections.
This shift presents an existential challenge for many institutions. Without proactive strategies, some colleges and universities will struggle to fill seats, forcing them to cut programs, lay off faculty, or even close altogether. The institutions that thrive will be those that rethink recruitment, personalize student experiences, and streamline operations to remain financially sustainable.
This article breaks down the root causes of the enrollment cliff and outlines data-driven strategies institutions can use to attract, retain, and support students.
Understanding the Enrollment Cliff
Demographic Shifts Leading to Declining Student Populations
The drop in college enrollment is not a short-term trend—it’s the result of a long-term demographic shift that began over a decade ago.
After the 2008 financial crisis, U.S. birth rates plummeted to historic lows. Between 2007 and 2012, they fell by nearly 13%, leading to a significant decline in the number of children entering the K-12 system (Pew Research, 2023). The effects of this decline are now beginning to hit higher education, with a steady decrease in high school graduates expected between 2025 and 2035.
Some states will feel the impact more than others. The Midwest and Northeast—already experiencing population stagnation—are projected to see the steepest declines in college-aged students (Western Interstate Commission for Higher Education, 2024).
But declining birth rates aren’t the only challenge. Even students who want to attend college are questioning its value.
Economic and Market Factors Affecting Enrollment
Beyond demographics, economic concerns are pushing students away from traditional colleges.
- Rising tuition costs: The average cost of tuition and fees at private four-year institutions has risen by 134% since 2000, while public universities have seen costs increase by 175% (College Board, 2024).
- Student debt concerns: The average student loan borrower in the U.S. owes over $37,000 upon graduation (Federal Reserve, 2024).
- Alternative education pathways: Vocational training, online certifications, and employer-sponsored education programs are becoming more attractive to students seeking affordable, career-focused learning options (The Hill, 2025).
With students weighing the return on investment of a traditional degree, colleges must work harder than ever to prove their value.
The Competition for Students Is Increasing
As the student pool shrinks, competition for enrollees is intensifying.
- For-profit colleges and online providers, such as Coursera, edX, and Google Career Certificates, are offering flexible, lower-cost education alternatives.
- Community colleges are drawing students away from four-year institutions by offering more affordable tuition and transfer agreements with universities.
- International student enrollment—once a financial lifeline for many institutions—has become more unpredictable due to changing visa policies and global economic shifts (Brookings Institution, 2024).
Colleges and universities must now compete on more than reputation alone. To stay ahead, they need stronger value propositions, better student support, and innovative learning models.
The Direct Impact of the Enrollment Cliff on Higher Education Institutions
Financial and Operational Strains
The decline in enrollment directly affects tuition revenue, which many institutions rely on to fund operations.
In the United States, the higher education sector has faced significant challenges due to declining enrollments and financial pressures. Since March 2020, at least 73 public or nonprofit colleges have closed, merged, or announced plans to do so, impacting approximately 46,650 students. The primary reasons cited for these closures include financial difficulties and decreasing student numbers (Best Colleges, 2025)
Colleges facing budget shortfalls must make other tough decisions like:
- Program reductions: Majors with low enrollment may be cut.
- Staff layoffs: Universities may need to consolidate faculty and administrative roles.
- Tuition hikes: Some institutions may attempt to offset losses by increasing tuition, potentially driving even more students away.
Student Engagement and Retention Challenges
Keeping students enrolled is more important than ever. Colleges that offer strong student support services, such as academic advising, mental health resources, and career counseling, tend to see higher retention rates. When students feel supported both academically and personally, they are more likely to stay engaged and complete their degrees.
Key strategies include:
- Personalized academic advising: Using AI-powered tools to guide students through degree planning.
- Proactive engagement: Identifying at-risk students early and intervening before they drop out.
- Career services integration: Helping students see a clear pathway from college to employment.
Strategies to Adapt and Thrive in a Shrinking Student Market
As the number of prospective students declines, institutions must shift from traditional recruitment and retention methods to more data-driven, student-centric, and technology-enhanced approaches. The colleges that survive—and thrive—will be those that proactively adapt to this new reality rather than reacting too late.
Here are some of the most effective strategies universities and colleges can use to maintain enrollment and financial stability despite a shrinking student pool.
Data-Driven Student Recruitment Strategies
Higher education institutions face growing challenges in student recruitment. Traditional marketing strategies—such as mass emails, broad digital ad campaigns, and generic outreach—often fail to connect with the right students. To succeed, colleges and universities must take a more strategic, data-driven approach to recruitment.
Instead of marketing to a broad audience with no clear indication of interest, institutions need to:
- Identify high-intent students—those actively researching programs, financial aid options, and career paths.
- Capture website visitor data to understand who is exploring degree pages and admissions resources.
- Engage prospective students in real-time to keep them informed and motivated to complete the application process.
By implementing precise targeting, lead identification, and automated engagement, institutions can increase application rates and enrollment efficiency.
1. Finding High-Intent Students
A major challenge in student recruitment is ensuring that marketing dollars are spent on the right audience. Many institutions invest heavily in advertising but lack the ability to focus their efforts on students who are actively searching for higher education opportunities.
To improve recruitment, institutions need access to real-time intent signals and audience data that allow them to:
- Identify students already showing interest in specific fields of study.
- Target prospective students based on location, demographics, and online behaviors.
- Optimize marketing campaigns by focusing on the students most likely to apply.
Solution: AudienceCatalyst
Ensign Street’s AudienceCatalyst helps institutions create precisely targeted, intent-based audiences using first-party data from over 280 million U.S. consumers and 60+ billion online behaviors. With this data, colleges and universities can refine their digital marketing efforts and reach prospective students at the right time.
For more information about how AudienceCatalyst can help your recruitment efforts, see THIS article.
2. Turning Website Traffic into Actionable Leads
Many prospective students visit university websites, browse program pages, and explore financial aid options—but never fill out an inquiry form or submit an application. This means institutions are losing valuable leads simply because they don’t know who these visitors are.
Without tools to capture and utilize website visitor data, colleges and universities:
- Miss out on high-potential applicants who show strong interest but never take the next step.
- Spend marketing budgets inefficiently, targeting students who may not be as engaged.
- Struggle to follow up with students effectively, leading to lower conversion rates.
Solution: RevealPixel
Ensign Street’s RevealPixel bridges the gap between website visits and actionable recruitment data. It identifies anonymous website visitors and provides institutions with valuable contact information, such as names, emails, phone numbers, and program interests. This allows universities to follow up with personalized outreach and turn passive interest into actual applications.
For more information about how RevealPixel can help identify your website visitors, see THIS article.
3. Engaging Prospective Students in Real-Time
Attracting students to apply is only the first step—keeping them engaged throughout the enrollment process is just as important. Many students begin applications but fail to complete them due to confusion, lack of reminders, or uncertainty about financial aid. Without real-time support, prospective students can easily lose interest or choose another institution.
To improve engagement and enrollment rates, institutions need a system that can:
- Provide instant responses to student questions about admissions, financial aid, and academic programs.
- Send timely reminders about application deadlines and required documents.
- Offer personalized guidance based on a student’s interests and progress.
Solution: Astra AGI
Ensign Street’s Astra AGI serves as a real-time virtual assistant, guiding prospective students through the enrollment process and their college career.. From answering admissions questions to sending deadline reminders and providing financial aid information, Astra AGI ensures that students receive the support they need—at the moment they need it.
For more information about how Astra AGI can improve student engagement, see THIS article.
The Future of Higher Education in a Shrinking Market
The enrollment cliff is not a passing trend—it is a fundamental shift in the higher education landscape. The number of high school graduates will continue to decline for at least the next decade, and institutions that fail to adapt will struggle to survive.
However, the future is not bleak for all colleges and universities. Institutions willing to innovate, rethink their student recruitment strategies, and prioritize retention will not only survive but thrive. A key part of this transformation is embracing digital-first strategies that enhance the student experience.
Learn how Ensign Street is leading the way in redefining success for higher education through digital transformation.
Key Takeaways: What Colleges Must Do Now
- Embrace Data-Driven Recruitment
○ Use AI and detailed analytics to target high-intent students.
○ Personalize outreach with dynamic content and automated tools. - Prioritize Retention with Personalized Support
○ Identify at-risk students early through predictive analytics.
○ Improve engagement with AI-powered academic advising. - Optimize Institutional Efficiency with Technology
○ Use AI to automate administrative tasks and reduce costs.
○ Implement smart financial planning to sustain operations long-term.
A Call to Action for Higher Education Leaders
The institutions that act now—by investing in technology, rethinking recruitment, and reimagining student success—will set themselves apart in an increasingly competitive landscape.
The choice is clear: Adapt or fall behind.
Higher education must evolve, and the universities/colleges that lead this transformation will shape the future of learning for the next generation.
The enrollment cliff isn’t coming—it’s already here. Institutions that act now will have a competitive advantage. Schedule a demo today and see how Ensign Street’s solutions can help you attract and retain students before it’s too late.