'Code-red moment': Fewer people going to college in Minnesota could reshape higher education, workforce

ST. CLOUD — The public university in this central Minnesota city was once the second-largest in the state, with 16,000 undergraduate students crowding its lecture halls, filling its dormitories and cheering on the nationally ranked Huskies hockey team.

Today, St. Cloud State University's campus on the banks of the Mississippi River serves as a harbinger of the powerful forces battering the nation's colleges and universities. Enrollment has plunged by almost half, tenured faculty have been laid off, the football team has been cut and a towering residence hall has been shuttered.

Colleges across the country have been losing students since 2010 as tuition increased, demographics shifted and Americans grew more skeptical about the value of a degree. In Minnesota, total undergraduate enrollment has plunged by almost a third to levels last seen in the late 1990s, according to the state Office of Higher Education, outpacing the more gradual drop in U.S. undergraduates.

"This is a code-red moment for not only just St. Cloud State, but other regional institutions," said Robbyn Wacker, St. Cloud State's president. "To survive in the current landscape of higher education, you have to create a new model."

The sprawling Minnesota State system, which consists of 30 community colleges and seven universities, including St. Cloud State, has borne the brunt of the state's enrollment decline. Its undergraduate population fell from nearly 200,000 in 2010 to just under 150,000 in fall 2021.

Flagship campuses, like the University of Minnesota Twin Cities, and selective private colleges, such as Macalester and Carleton, have maintained steady enrollment, mirroring a national trend in which wealthier institutions are thriving while cash-strapped schools fight to survive.

Student bodies began shrinking before the pandemic, but its disruptions to classroom learning and campus life are accelerating the enrollment spiral, which threatens to worsen labor shortages and change the career trajectory of a generation of Minnesotans.

"Businesses today are saying they can't get people with the kind of skills that they need, and that can only get worse if more students continue to opt out of higher education or be forced out because they can't afford it anymore," said Doug Shapiro, executive director of the National Student Clearinghouse research center.

Jude Breen is in no rush to enroll in college. The senior at Como Park High School in St. Paul is planning to take a gap year after graduating this May and work in construction or continue his current job at the Merit Chevrolet dealership in Maplewood.

Breen said he is considering studying to become an electrician or auto mechanic at a local technical college the following year, but he is not sure.

"A four-year university isn't what really interests me," Breen said. "I don't think it's affordable to the regular American household."

The share of Minnesota high school graduates who enroll in college has been decreasing, state data show, from 70% in 2014 to 66% in 2019. That drop accelerated amid the pandemic, with just 62% of Minnesota's 2020 high school graduates enrolling in college.

A Gallup poll last year found nearly half of U.S. parents would prefer their children pursue noncollege paths, such as apprenticeships, trade school, joining the military or starting a business, instead of enrolling in a four-year university. That followed a 2019 poll finding that only 51% of Americans thought a college education was "very important," down from 70% in 2013.

About half of Minneapolis Public Schools' 2020 graduates enrolled in college, down from nearly two-thirds of 2017 graduates. The percentage of Minneapolis graduates of color who go to college has decreased at an even higher rate.

"The achievement gap is growing. A large number of students of color are not pursuing postsecondary options," said Clinton Ferguson, a licensed school counselor at Southwest High School in Minneapolis.

Ferguson attributes the drop to a variety of factors. Some students weary of online learning do not want to continue it in college. Others are working to support themselves and their families. And many are worried about the ongoing pandemic and the cost of college.

Since 2010, annual tuition has risen from $12,300 to $15,400 at the University of Minnesota Twin Cities, from an average of $6,900 to $8,900 at Minnesota State's seven universities and from $4,900 to about $5,700 at the system's community colleges.

The average student loan debt for Minnesotans earning bachelor's degrees was $24,793 in 2020, about 10% less than what graduates owed in 2012, according to the state Office of Higher Education. State and national grant awards increased during that span, and colleges expanded scholarships.

Many college students still say they are under financial pressure. The community college student association LeadMN recently surveyed about 7,700 students at Minnesota State's two-year colleges and found 90% had struggled to pay for school and living expenses. About two in five students said they had considered dropping out.

"I'm dancing on a very sharp edge right now," said Marcelus Ifonlaja, 24, a junior concurrently enrolled at Metropolitan State University in St. Paul and Minneapolis Community and Technical College.

Ifonlaja spent time in the foster care system growing up and was homeless at one point. Without his scholarships and two part-time jobs, with which he barely gets by, he said college would be out of reach.

"I had no idea it was going to be this difficult," said Ifonlaja, who's studying finance. "I think that tuition should be lower."

The consequences of fewer people going to college could be far-reaching.

Those with just a high school diploma earn significantly less on average than people with bachelor's degrees and so spend less and pay less in taxes. They are more likely to be unemployed and need government assistance, and have lower life expectancy. They are less likely to vote and more likely to divorce.

About 11% of Minnesota adults with only a high school diploma were in poverty in 2019, according to state data. That's compared to just 3% in poverty among Minnesotans with a bachelor's degree.

Usrah Abawari, a senior at Highland Park High School in St. Paul, is planning to attend college in Texas this fall, though she does not yet know what she will study. She believes a college degree provides the clearest path to success.

"Financial stability is one of the biggest factors … in going to college," Abawari said.

A growing share of high school seniors are taking different paths, however, such as going straight into the workforce now that wages are on the rise and job openings are plentiful.

Eight of the state's top 10 in-demand occupations require only a high school diploma, meaning those professions, most of which pay less than $50,000 annually, stand to benefit from more young people choosing work over college.

But Minnesota Higher Education Commissioner Dennis Olson cautioned, "We need to remember that the jobs that are available today are certainly going to maybe provide some short-term good opportunities for folks, but … they may lose later on down the line the potential for long-term opportunities."

Minnesota is projected to need many more elementary school teachers, accountants, auditors, managers, marketers and engineers over the next 10 years, all of which require bachelor's degrees.

"The four-year degree and higher-level degrees continue to remain important for Minnesota because we have such a strong headquarters economy," said Amy Walstien, education policy and workforce development director for the Minnesota Business Partnership. She predicts the state could face labor shortages in professions that require college degrees if enrollment does not rebound.

This year's high school seniors do not appear to be any more interested in college than 2021's graduates. The percentage of Minnesota seniors who have filled out the Free Application for Federal Student Aid, or FAFSA, a key predictor of college enrollment, is up 1% compared to last year, national data show.

Making matters worse, the number of U.S. high school graduates is expected to begin decreasing after 2025 due to a birth rate decline that started in 2008. Many colleges in Minnesota and elsewhere are in worse shape than expected ahead of the demographic dip.

"If [colleges] continue with status-quo policies, we may be facing some really uncomfortable choices," said Carleton College economics Prof. Nathan Grawe, who wrote a book on how the demographic changes could affect higher education.

Grawe pointed to the Connecticut state college system, which is in the process of merging 12 of its community colleges, and the Pennsylvania system, which announced last year it would consolidate six of its universities, as cautionary tales.

The Minnesota State system is combining five of its colleges — Hibbing Community College, Itasca Community College, Rainy River Community College, Mesabi Range College and Vermilion Community College — into one institution after their enrollment fell 35% over the past decade. Each of their physical campuses in northeastern Minnesota will remain, but they will share accreditation, student services, marketing and other offices, benefiting the new college's bottom line.

Other Minnesota State colleges have begun sharing resources without formally merging. Inver Hills Community College and Dakota County Technical College share a president, a financial aid office and more than 60 positions, said Michael Berndt, president of the two schools.

"We are able to manage our costs a lot through that strategy," Berndt said.

Bill Maki, Minnesota State's vice chancellor for finance and facilities, said the system will continue to consider merging resources "where it makes sense to do that."

There is some concern among faculty that such mergers could result in personnel reductions. Others believe these moves could bring positive change, reducing competition and increasing collaboration between Minnesota State's 37 autonomous schools.

System leaders say they do not expect enrollment to return to the level it was a decade ago. But an influx of federal COVID-19 stimulus funding has bought time to search for solutions.

Minnesota State Chancellor Devinder Malhotra cited two strategies the system is taking to stabilize or increase enrollment in the coming years: expanding student support services to increase retention, and recruiting more nontraditional students, such as working adults.

"There are communities where there is pent-up demand for higher education. And we are uniquely positioned to bring those students in," Malhotra said, noting the system's colleges and universities are less selective and more affordable than others.

St. Cloud State is adding several new online master's degree programs in hopes of capitalizing on steady demand for graduate school. The university's leaders are also considering making hybrid learning a permanent offering for most classes — giving students the choice to attend in person or online on any given day — and adding more program start dates so students are not limited to enrolling only at the start of the fall or spring semesters.

"We absolutely need to be creative about how we make it possible for students to work and grab some credits, work and grab some credits," said Wacker, St. Cloud State's president. "Not making it a bifurcated choice of either you work, or you go to school. That just doesn't make sense anymore in the new reality of our marketplace."