Higher Education After Its Peak

Ever since World War II, higher education has been a growth industry. Maybe student numbers haven’t risen every year, or funding hasn’t always gone up, but the general trend has been positive. But right across the world, that upward trend has come under threat over the last decade or so.

In Korea or Taiwan, for instance, youth numbers have collapsed, and with them enrolments have fallen and universities have closed. In the rest of the OECD, public funding for higher education peaked just after the global financial crisis, but so far most national systems have seen their funding plateau rather than decline. Until now, that is.

My guest today is Bryan Alexander. He’s the author of the new book Peak Higher Ed: How to Survive the Looming Academic Crisis. This isn’t the first time he’s joined us on the podcast — he also came on a couple of years ago to talk about his previous book, Universities on Fire: Higher Education in the Climate Crisis.

His new book, not on the cheeriest of subjects, covers a number of topics that are battering higher education in the United States, including a looming demographic crisis in the Northeast, growing public skepticism about the value of higher education, and the wild uncertainty — both for education and the labour market — that’s been brought about by the advent of artificial intelligence.

I’m a big fan of Bryan’s, and I think you’ll enjoy our talk, especially the bit at the end, where he outlines the kinds of things institutions can do to avoid decline themselves.

And so, with that, over to Bryan.

The World of Higher Education Podcast
Episode 4.19 | Higher Education After Its Peak

Transcript

Alex Usher (AU): Your book is called Peak Higher Education. Walk us through why you think higher education is at a peak, or possibly beyond it.

Bryan Alexander (BA): Past peak. Thank you very much, Alex, for hosting me on this program, which is one that I follow closely.

I came up with this idea back in 2013, and it refers specifically to United States postsecondary education. The idea is that we had an epoch of growth from the early 1980s to about 2012 — growth in enrollment, the number of institutions, staff working at institutions, and the production of knowledge. Then we hit a peak around 2012, and ever since then we’ve been sliding down.

I came up with this idea in 2013, and it bore out for about the next 11 years. We’re starting to see a turnaround in enrolment right now, but it’s still not back at peak levels, and things have changed a great deal.

I came up with this idea because it seemed strikingly important. As you know, most of American higher education depends overwhelmingly on enrolment for revenue to keep the doors open. So this seems like a vital challenge to American sustainability, but also a challenge to our idea of college for everyone — or at least college for as many people as we can manage.

And it seems like we’ve gone backwards on that. As of last week, the National Clearinghouse said that we’re back to 2019 enrolment levels, which seems likely and plausible, but we’re still not back to 2012 levels. So the question is: what happens? Do we keep going down this peak? Do we keep sliding, or do we see a qualitative or quantitative change that transforms American higher education and takes it back into an epoch of growth?

If we make it back to 2012 numbers — probably by, say, 2029 — then that will be an achievement. We will have rebounded fully. However, that would not represent the same proportion of the American population. Roughly speaking, about 6% of the U.S. population was in postsecondary education in 2012. Even if we rebound fully in absolute numbers, we would still be down about 5% of that proportion.

I think one of the major arguments of the book is that one of the biggest developments over time in the U.S. is that college for everyone broke — and we haven’t fixed it. We haven’t replaced it with a new way of thinking about postsecondary education. We’re straggling back toward an early-20th-century model of college for some, but we don’t yet have a coherent way of thinking about it.

The other thing to think about is where the rebound is happening. It’s not happening at liberal arts colleges. It’s not happening at research universities. The rebound is largely happening in community colleges and for-profit institutions, and especially in certificates.

What we’re seeing is a push toward people who want to get in and out of postsecondary education as quickly as possible, with a pointer toward a credential. And moreover — and I don’t know how widespread this is globally — another big push is dual enrolment at community colleges. Instead of teaching adults 18 and up, they’ve been teaching a lot of high school students. Something like 40% of the growth in community colleges right now comes from dual enrolment, which again represents a transformation of American higher education.

There’s a quantitative shift here, but it’s leading to a different quality — and that’s something that isn’t fully grasped yet.

AU: So it’s true — if that’s where the rebound is concentrated, that’s also where the decline was concentrated too, wasn’t it? It seems to me that one interpretation of what happened between about 2012 and 2022 is that most of the losses in that period were in two-year colleges, and they were hurt by an incredibly buoyant economy. Two-year colleges are countercyclical, and you have very, very low unemployment rates. Who needed community college when you had 3% unemployment and rising salaries and those kinds of things? Isn’t what we’re seeing right now, as you say, a rebound — but just the normal countercyclical rebound we tend to see on the two-year side?

BA: I’m so glad to hear you say that, and this may be proof that you’re not from the U.S., because in the U.S. we try not to talk about community colleges whenever possible — which is moronic, because they’re the biggest swath of American higher education and they do more with far, far fewer resources.

One thing is that the countercyclical nature of community colleges — that is, when we have high unemployment, we get a rush of people into community colleges — has been breaking down. That didn’t happen in 2020 during the pandemic, and it barely happened in 2008 during the Great Recession.

The other thing that happened during that period was the second Obama administration, from 2013 to 2017. Obama really went after for-profits, and for-profit education really contracted. It rebounded again under Trump’s first administration and has been up and down since. But for-profits are very, very interesting. As we know from Tressie McMillan Cottom’s work, they tend to recruit mostly women, particularly Black and Latino women, and their main competition is community colleges.

So both of those sectors suffered. Now, if we look at the rest of American higher education — state universities, private colleges, and so on — those haven’t gone through a growth period either. They’re more or less just trickling along. So again, I keep coming back to the peak notion: after nearly 40 years of rapid growth, we hit a wall.

AU: So a lot of what’s often grouped under the discussion about decline is people telling pollsters they don’t think higher education is worth it. I don’t think you make too much fuss about this in your book, probably an appropriate amount, but it’s certainly a big part of the public discussion: the declining number of people who say it’s worth it. There was an interesting article in The Atlantic earlier this month, where Rose Horowitch pointed out that the actual rate of return on higher education doesn’t seem to be changing all that much. So what’s going on with public opinion? What do you think people are reacting to? Why don’t they say it’s worth it even though the data says it is?

BA: Well, the data is actually kind of all over the map. There are different studies pointing to different things. One interesting question is how often the data takes debt into account, which it often doesn’t. Returns also depend on the reputation of the institution, and on the degree and the major students choose.

We’re also looking at lifetime earnings. And right now, for an 18-year-old, we don’t have real data on lifetime earnings — they haven’t lived their life yet. So we’re relying on historical data, and as the saying goes, past performance doesn’t guarantee future results.

So the data isn’t quite as clear as it sometimes sounds. I think some of the reasons for the souring are pretty well established. If we look at the past 15 years or so of higher-education polling, it’s clear that opinion has declined across the board.

One reason is political. Republicans have become more and more hostile to higher education, clearly for political and cultural reasons. But we also see a similar direction among independents and Democrats in the U.S. Independents tend to fall between Democrats and Republicans, so that makes sense.

A second reason is the economics — not the return, but the price and the structure. Student debt is a horrific spectre. The media sometimes makes too much of it, but it’s still quite daunting. And as your work shows, no other country has gone all the way down this road of accumulating nearly $2 trillion in student debt.

We also have this fairly unusual pattern of high tuition and high discount rates. And this doesn’t work very well in terms of public opinion. Institutions charge very high sticker prices, and then discount heavily for many students. This year, two Boston-area institutions cracked the $100,000-per-year barrier for the first time, but most students don’t actually pay $100,000 a year.

Most of them get steep discounts through financial aid, work-study, and so on. That discount is invisible to almost all Americans. It’s barely talked about within higher education itself. So people see that $100,000 figure, freak out, and think, “This isn’t worth it. I could do an HVAC career instead,” or “I could take a degree online.”

There are other reasons we could add as well, but I think those are two of the big ones.

AU: You spend a fair bit of time in the book on artificial intelligence and how it might affect higher education. My view is that the first major impact is going to come through changes in returns to skills. I know the research here is mixed and incomplete, but there’s a significant strand suggesting that the people who are going to benefit most from AI are workers with lower skill levels. That would imply downward pressure on demand for higher education, since lower levels of education could still generate higher returns. What do you think about that dynamic? Is that how you see things playing out?

BA: Right now, there’s a huge gap between AI and robots. AI is increasingly good at doing the kinds of jobs that all of us around this table — this virtual table — can do. It can make podcasts. It can write books. We’re already at that stage. But we don’t yet have robots that can, say, cook a meal — or a series of meals — very efficiently.

There’s a lot of pressure in this area. We’re seeing robotics research advance rapidly, especially out of China, but it’s still lagging a great deal behind. So physical jobs — think of skilled trades — still have a lot of viability. And depending on how you approach them, you may still need to take on some student debt, or get a credential, to enter those fields.

More broadly, there’s huge pressure on higher education, but I don’t think it’s going to depend primarily on the actual technical capabilities of AI systems. I think it’s going to depend much more on how we perceive them. As a culture, as a society, will we come to see higher education as inferior to AI — as costly, lagging, slow, uninteresting, not humane, not very kind — while AI becomes our best buddy? If that happens, enrolment and public support will drop even further.

Or will we instead focus on the many screw-ups that AI produces? Everything from the habitual creation of hallucinations — what Naomi Klein and others have called “mirage” — to more serious harms. Will we see AI talk more people into death? If we experience a disaster that people perceive as AI-driven or AI-caused, we may turn away from it and decide that AI is simply too dangerous, more like nuclear technology. In that case, academia might look better by comparison — more reliable, more humane.

It’s also possible that we’ll see the post-AI world as strange and difficult to understand, and people will turn to academics to help make sense of it. What will AI do to my job and to the economy? An economist can help you with that. What does it mean for my relationships? Psychologists can talk about that, and so on.

At this point, it’s really a question of aggregate perception.

AU: Bryan, in your chapter Getting Back to Peak, you focus heavily on pushing back against decline and looking for new markets. You talk about international students, lifelong learning, and so on. But a lot of what you’re describing seems to require a fair degree of institutional agility — letting go of sunk costs, abandoning longstanding ways of doing things, and rethinking teaching and credentialing models. You’ve mentioned that already.

When I think about the lifelong learning market in particular, that’s a market much more interested in short credentials and online delivery. Universities are not just physically, but culturally, more attuned to delivering degrees in classrooms. Do you see any real signs yet that institutions — and maybe more importantly, faculty — are ready for that kind of radical reimagining?

BA: That’s a great question. I think we’re seeing some initial signs when we look at faculty and staff who act as public intellectuals and use newer media to do that. People teaching physics on TikTok, for example — I think that’s a sign.

But overall, right now — and unlike my previous book, this one focuses specifically on the United States — I find most of American academia is in a defensive crouch. It’s terrified. And depending on the institution, there are financial pressures hitting just about every other school.

There’s also the political pressure of the Trump administration’s continuous attacks on higher education. There are people who are terrified of anti-intellectualism. All kinds of pressures are being felt on higher education right now, and that puts institutions into a defensive mode where the instinct is to protect what we have, not to rethink and revise it.

I depress a lot of audiences by saying we should look back to 2020 and think about how much agility higher education showed in responding to COVID. That usually kills the conversation, because no one wants to talk about COVID anymore. But we did do remarkable things, with very little support.

We flipped higher education online. That’s tremendous. We did it badly in some ways, and we learned a lot of lessons, but we made it happen.

And when it comes to AI, I think we need to learn from that COVID-era response. Institutions assembled teams to monitor the problem, gather data, publish findings, and educate one another about what was happening. They also set up institutional data collection to understand impacts in real time. We should be doing the same thing with AI.

We have that capacity. But right now, people are focused on keeping grants going, keeping students coming in the door, and keeping state governments from trampling on tenure.

AU: What about institutions that choose not to chase uncertain new markets? They’re not going to rage against the dying of the light — they’re going to accept the fact that they’re in a world with fewer students. Is there a way for colleges and universities to decline gracefully?

BA: That’s the second-to-last chapter of the book. And I think this is something that many academic leaders have been thinking about quietly, and not online, because it’s very difficult. We have so much practice — a generation or more — of expansion. What Edward Abbey used to call “growth for growth’s sake,” the ideology of a cancer cell.

There was an interview where Malcolm Gladwell talked to, I believe, the president of Stanford, and asked him when they would ever have enough donations — when would they turn down a million dollars here, a million dollars there? And the answer was: never. It’s really hard to step away from that mindset.

But I have heard, sub rosa, from various academic leaders that they are thinking about this. What does our campus look like if we have 60% of the student body? What does it look like if only 50% of students physically appear on campus? Do we shrink the physical footprint — selling buildings, leasing buildings, selling land? How do we restructure our finances so we can keep the doors open?

I think, in many ways, that conversation is happening quietly around board tables right now. And it’s one we should be having much more openly, because it may be that a managed descent is the right solution for quite a few colleges and universities.

AU: What role does the government play in all of this? One of the big stories last year was South Korea passing what they called “zombie university” legislation. It made it easier for governments to shut down institutions that were clearly unviable but refusing to close — the Sweet Briar phenomenon, if you will. Is that the kind of intervention that would help in the U.S.?

BA: It depends on what you mean by “help.” When we ask what role government has, my first response is almost a full-body shudder, thinking about what the Trump administration has been doing.

Just to be clear, over the past three years I’ve done a lot of work — online and in person — trying to help academics prepare for a second Trump administration. We did an open online reading of Project 2025. We ran scenario exercises. We thought we were pretty well prepared, and Trump turned out to be even worse than we expected.

But there are also state governments taking steps. Ohio’s SB 1 law, for example, really clamps down on everything from academic freedom to what gets taught. We’re seeing similar things in Texas and Florida.

For viewers and listeners, it’s worth emphasizing that American higher education is very disorganized and very disaggregated. We don’t really have a strong federal role in higher education, and even at the state level, systems are loosely organized. Institutions are highly autonomous.

That said, some states have done interesting things. Massachusetts, for example, created a policy where a college or university in financial crisis could reach out to the state privately, and the state wouldn’t out them publicly. This came after the president of one Massachusetts college went public and said, “We’re in trouble. Please help,” and everyone immediately pulled away because no one wanted to invest in a dying institution. That institution is still struggling.

Pennsylvania is also very interesting. It’s a state experiencing what I talk about in the book — not a demographic cliff, but a demographic transition. After 2008, many people decided not to have children, and we’re seeing the impact of that now. More broadly, societies go through a process where women have fewer children and people live longer lives. Pennsylvania is experiencing this at an accelerated pace.

At the same time, the state overbuilt a large number of public institutions across the state, often in rural or remote areas. Now they’re trying to figure out how to “castle,” to use a chess metaphor — how to combine and synthesize those systems. Vermont, for example, helped three state institutions merge into one. Different states are grappling with this in different ways.

The political problem isn’t just institutional identity, though that matters. It’s local politics. No city or county wants to lose a college. It’s a terrible blow to the local reputation and the local economy. We have story after story of places where colleges closed and communities became ghost towns.

Some state governments have increased funding for public higher education. Some haven’t. Governments can play a role in convening postsecondary institutions to think through this crisis collectively. But I started by mentioning Republican attacks because they really muddy the waters. They dominate attention, making it harder to deal with souring public opinion, demographic transition, and the potential impact of AI.

That makes it very difficult for the government to take proactive steps. The officials I know can be thoughtful and reflective, but it’s going to take some very fancy footwork to develop productive state- or city-level policy.

AU: You’ve mentioned Republicans a few times now, which leads to my next question. From a non-American perspective, I found that the role of the far right in the book felt a bit underplayed. I don’t know whether that was a publisher decision or not, but around the world, fascist movements have been hostile to alternative sources of authority — and in the U.S., that hostility clearly extends to universities. Attacks on expertise, manufactured free speech controversies, efforts to reduce education to job training — how realistic is it for American higher education to get back to peak without a fundamental weakening of the MAGA movement and its allies?

BA: I think I’ve been pretty clear over the past few minutes. A year ago, I was at a meeting in Washington, D.C., with the National Academies about climate change work — as you know from my previous book. It was a very grim meeting, and at the end of it we literally marched down the street to protest what was happening.

Things in the U.S. are incredibly fragile right now. A lot of libraries and bookstores are being very careful about putting out anti-Trump content because they’re afraid of backlash. They’re afraid of Moms for Liberty. They’re afraid of censorship, formal or informal.

I don’t really think MAGA is a movement — I think it’s a fandom and a lot depends on where Trump goes next. He’s such a figure of chaos, such a figure of randomness — a presidency by ADHD. It depends on whether he remembers to keep crushing higher education.

This administration has more capable staff — people more aligned with his vision — and that’s actually worse. They’re doing more damage. The Secretary of Education, for example, is energetically dismantling her own agency. The Department of Justice has been going after universities.

It’s an open question how long the U.S. can sustain this. At what point do we transition to an illiberal democracy, along the lines of Orbán’s Hungary?

That said, this could change quickly. We have midterm elections coming up this November. If Democrats manage a victory — which they’re capable of doing — they could win a majority in at least one house of Congress, and possibly even break Republican control of the Senate. That would stymie a lot of this agenda.

It’s a very open question.

AU: Over the course of the book, you lay out several possible futures for U.S. higher education, and in the final chapter you sketch out ways institutions might regain some of what they’ve lost. I know that as a futurist you’re loath to make precise predictions — you’re sketching scenarios. But let me ask you about probabilities. If we invite you back on the show in early 2036, what do you think the odds are that American higher education will be in a better position than it is today?

BA: 2036 — that’s a great year to think about.

By then, we will have had to grapple seriously with the demographic transition. The United States, minus immigration, has followed the rest of the developed world — Canada, Europe, South Korea, Japan. Our birth rate has fallen to around 1.6, depending on how you measure it, which is below the replacement level of about 2.1.

And we’ve clearly turned a corner on immigration. I mention immigration because immigrants tend to be younger, and in the U.S. in particular, immigrant couples tend to have more children. Their children then follow suit and have fewer and fewer. If the U.S. continues to turn against immigration in a big way — and it’s not just us, of course; Europe is doing this in different ways, Japan famously resists immigration, and China is eager for it but doesn’t do it very well — that’s one of the forces we’re going to have to deal with. It may be an irresistible force.

American higher education may simply be smaller. We might enrol 15 million students instead of more. We might have 3,200 institutions instead of roughly 4,000. The number of workers, the physical footprint in terms of acreage — all of that could shrink accordingly.

But a lot also depends on what we do with AI. Ten years is a long time for AI. Does it transform us into a post-human world? Do we get what some on the left jokingly call fully automated luxury communism, where automation — both software and hardware — takes over so many tasks that we can give up doing things we find unpleasant? If that’s backed up by appropriate social services and a strong civil society, perhaps we end up with a better lifestyle, a better world — something like what Keynes imagined in Economic Possibilities for Our Grandchildren.

It’s also possible that AI fizzles out and becomes something like pneumatic tubes in 19th-century Europe. Or we may handle it very badly, with a continuing roiling landscape of disinformation, out-of-control automation, and a steady drumbeat of disasters.

I don’t see any sign that the U.S. is recovering its ability to deal with climate change. The one clear signal that the U.S. is taking climate change seriously comes from the insurance industry. Insurance companies aren’t partisan. They don’t have fervent imaginations. They’re disciplined masters of data. And you can see them pulling coverage or charging much higher premiums in places where climate change is hitting hardest.

If American higher education remembers that climate change is something it has to grapple with, we might play a leading role in that civilizational crisis. Ten years is a long time for that to unfold.

Again, I’m hedging my bets — as you say, futurists don’t like ironclad predictions. We prefer to give people a sense of the cone of possibilities opening up. We could blow this in many ways, which is why we need agency now — to think together and act together — to reduce the chances of the worst outcomes and improve the odds of the best ones.

AU: Bryan, thanks for joining us again. You’ll be back when your next book comes out?

BA: I will, if you like.

AU: We’ll see you then. And it just remains for me to thank our excellent producers, Tiffany MacLennan and Sam Pufek, and of course you — our viewers and listeners — for joining us. If you have any questions or comments about today’s podcast, or suggestions for future episodes, don’t hesitate to get in touch at podcast@higheredstrategy.com.

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