Fitch: Fewer High School Students Means More College Competition

NEW YORK--(BUSINESS WIRE)--Student demand trends remain a key factor for Fitch when reviewing its college and university portfolio. We believe recent and projected drops in high school students will create a more competitive environment for most higher education institutions, further constraining tuition pricing flexibility.

“Knocking at the College Door: Projections of High School Graduates”

The Western Interstate Commission on Higher Education (WICHE) recently released the eighth edition of its "Knocking at the College Door: Projections of High School Graduates" report, which estimates the number of public and non-public high school graduates hit a peak at around 3.4 million in the 2010-2011 academic year, will decrease annually by up to 2.9% between 2011 and 2014, and then remain relatively flat between 2014 and 2020.

Among other initiatives, many higher education institutions are enhancing their regional, national, and/or international outreach efforts to adapt to changing demographics. Fitch anticipates that institutions already experiencing demand-driven financial pressures will likely be further affected by the continuation of this enrollment trend. The increasing importance of college or university education to career development counterbalances this trend to some extent, along with greater college participation.

For the past 20 years, public and private colleges and universities have benefitted from sustained growth in total high school graduates, primarily due to elevated birth rates and growth in the immigrant population. According to the U.S. Census Bureau, more than 30% of U.S. adults aged 25 and older were reported to have attained at least a bachelor's degree in March 2011, a record in the nation's history.

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