The trend of declining undergraduate enrollment and the subsequent increase in graduate enrollment has been a significant factor in the financial strategies of many universities. Graduate programs have become a vital source of revenue, especially as the ability for graduate students to borrow more money for their education increased. However, the landscape is changing, and universities are facing new challenges.
The decline in undergraduate enrollment, as reported by the National Center for Education Statistics, has been a long-term trend, with numbers falling by 15 percent between 2010 and 2021. This decline has put additional pressure on universities to find alternative revenue streams, which many have found in expanding their graduate offerings.
The growth in graduate enrollment, as mentioned, has been substantial, with a 9 percent increase over the last decade. This growth has been fueled by various factors, including the change in borrowing limits for graduate students and the increase in the number of Americans in the prime age range for graduate education (25 to 44 years old).
However, the pandemic has brought about a shift in attitudes towards higher education, with prospective students becoming more cost-conscious and seeking out more flexible and affordable alternatives to traditional graduate programs. The rise of shorter, cheaper, and more flexible alternatives, such as certificates and non-degree offerings, has begun to erode the market share of traditional master's degrees.
The slight rebound in graduate enrollment in the fall of 2023 may indicate a stabilization of the trend, but the long-term outlook remains uncertain. Universities are now grappling with the challenge of adapting to these changing preferences while maintaining the revenue streams that graduate programs provide.
The specific case of FAMU highlights the impact of shifts in student interest in graduate study. The decrease in pharmacy students, has fueled a 17.99% drop in graduate enrollment between 2017 and 2023 (from 1339 in 2017 to 1099 in 2023, not including law students).
If the current trends hold up, institutions must be prepared to adapt to a more dynamic and competitive environment. The shift towards more flexible and cost-effective alternatives to traditional graduate programs is a clear indication that universities will need to innovate and diversify their offerings to remain relevant and financially sustainable.