The higher education landscape is constantly changing. Institutions face federal policy changes, fluctuating enrollment numbers, and poor student loan repayment records. Colleges must proactively adjust their enrollment strategies, support student loan borrowers to avoid delinquency and navigate the upcoming federal initiatives.
Enrollment Trends: A Shift to Non-Traditional Students
Recent data suggests that the college student population is shifting. While overall enrollment grew, the traditional pipeline of 18-year-old high school graduates will begin to shrink next year due to demographic changes. Colleges need to expand their recruitment efforts toward adult learners, international students, and online degree seekers to keep their numbers up.
Key college enrollment trends include:
- Older students driving growth: Freshman enrollment among students 25+ has increased significantly, signaling a need for institutions to tailor programs for working professionals.
- Health and technology fields remain strong: Demand for degrees in healthcare, data science, and cybersecurity continues to rise, while humanities and liberal arts programs are seeing declines.
- School type matters to students: Research suggests more students choose affordable, short-term programs and borrow less money overall to earn their post-secondary education.
Student Loan Delinquencies on the Rise
The resumption of federal student loan payments has led to a surge in delinquency rates. With the 12-month on-ramp period ending last October, millions of borrowers are not at risk of defaulting. Factors contributing to this crisis include:
- Confusion over repayment options: Many borrowers are still unaware of income-driven repayment (IDR) plans that could lower their monthly payments.
- Lost contact with servicer: Servicing changes over the past few years have left some borrowers disconnected from their servicer and uncertain about if or how to send payments.
- Financial strain and inflation: Rising cost-of-living expenses have made it difficult for borrowers to re-integrate student loan payments into their budgets.
Colleges can avoid the return of high Cohort Default Rates by implementing a proactive default aversion strategy that includes direct borrower outreach, self-service repayment planning, and financial literacy.
What if the Department of Education Closes?
Discussions about dismantling the Department of Education have resurfaced, raising questions about the future of federal student aid. While this change would require Congressional approval, potential impacts might include:
- Restructuring the Office of Federal Student Aid (FSA): The $1.7 trillion student loan portfolio may shift to another federal agency, such as the Treasury Department, potentially altering loan servicing and collections.
- Policy changes: Ongoing student loan forgiveness programs and other federal aid initiatives could be reevaluated or even eliminated under a new structure.
- State-level education funding changes: It has been suggested that state governments take on more responsibility over grant distribution and financial aid policies.
Staying informed and prepared for potential changes is crucial for students, borrowers, and institutions. Having a partner dedicated to tracking these changes, like IonTuition, will help with navigating these transitions.
IonTuition can help institutions continue to grow their enrollment and help borrowers avoid default.