How Higher Ed Can Survive the Demographic Cliff

As the class of 2029 settled into dorm life this past August, the Federal Reserve Bank of St. Louis offered a startling data point: from 2019 to 2025, the jobless rate for recent U.S. college graduates grew at nearly three times the rate it did for young non-college educated workers. To be sure, the average unemployment rate (4.59%) for college graduates was still lower than it was for individuals without a degree (6.38%), but the bank's report fed an increasingly common question: is a four-year degree worth the cost?

According to a late 2025 NBC poll, for 46% of college graduates, the answer is no.

It is time for universities and two- and four-year colleges to reckon with this harsh reality. Their survival depends on it, as does the country's future economic prosperity.

Not every person needs a college degree to earn a substantial paycheck or to thrive in a career that gives them meaning. Postsecondary institutions should aim to serve Americans who choose a non-degree path. Indeed, in an economy where both degreed and non-degreed workers will need to continually refine their skillsets to adapt to change, college and university leaders and educators who expand the population they serve will thrive.

There are a couple of models leaders and educators can follow.

This first is Arizona State University (ASU). A large, public research university, ASU has expanded its offerings beyond traditional degrees. Its Universal Learner Courses, for example, offer enrollees the opportunity to earn career certificates in cloud computing, business, engineering, and more. Nearly 26,000 learners took these courses in fiscal year 2024.

Local learners are not the only ones who have benefited. President Michael Crow began his tenure, and implementing his reform agenda, at ASU in 2002. Since then, new philanthropic gifts and commitments to the school have tripled. (Full disclosure: the Charles Koch Foundation, CKF, has donated.) Resident enrollment has grown by 20,000.

Georgia Tech is another innovator. Launched in 2024, its College of Lifelong Learning offers non-credit credentials, along with undergraduate and graduate degrees. The advent of Workforce Pell Grants should give colleges and universities additional reason to innovate since, for the first time, Americans will be able to use Pell dollars for non-degree programs.

Another model involves partnering with employers and nonprofit groups to create short-term training programs that respond to specific needs in the community.

In 2019, Goodwill Industries of Southern Piedmont launched its Construction Skills Training Center to address North Carolina's trades skills gap. Goodwill provides wraparound support services, the local school system helps recruit enrollees, Central Piedmont Community College offers courses for credit, and another local nonprofit, Rebuilding Opportunities in Construction, offers apprenticeships and mentorships. More than 850 adults learners have graduated and, with support from CKF and the Lenaar Foundation, Goodwill will expand the model.

Marshall University's partnership with Toyota offers another example of how colleges and universities can work together to address job gaps in the community.

Future innovation and prosperity depend on higher education's ability to innovate. In a survey last year, Resume.org found employers think college graduates are unprepared to lead. About 70% of hiring managers put a recent graduate on a performance improvement plan while 65% had to fire a newly minted degree holder. Nearly one in five managers said they were apprehensive about hiring from the class of 2025.

The fate of many postsecondary education institutions also depends on their ability to innovate. Last year, 15 nonprofit colleges and universities closed and that number may soon rise. A Federal Reserve Bank of Philadelphia study estimated that as many as 80 additional colleges could close annually in the coming years.

Sadly, too many colleges and universities have responded to this shifting landscape by promoting exclusivity as the marker of success for themselves and their graduates. That strategy may not affect a handful of institutions' ability to survive, but in a rapidly changing economy it will doom most colleges and universities. Michael Crow has said ASU will be measured not by whom the institution excludes, but by whom it includes and how those learners succeed and contribute to their communities.

In a new economy and in the face of significant demographic shifts, that mindset is the one college and university leaders should adopt.