Graduate enrollment growth appears as a ray of sunshine in the pandemic storm. As undergraduate enrollment slumped by 4.4% in fall 2020, graduate student numbers grew 2.9% year-over-year despite a global health crisis—momentum twice as fast as the year prior.
But appearances can be deceptive. Eduventures analysis of the Current Population Survey, chronicler of the lives of 400,000 Americans annually, shows that the proportion of bachelor’s degree holders enrolled in graduate education has fallen steadily since 2013.
How can enrollment be up and participation down at the same time? This is the plot twist in the graduate education story.
Ten Years After
The backdrop to the graduate enrollment bonanza is the rise of the largest cohort of bachelor’s-educated young professionals in U.S. history. Over the past two decades, the number of Americans with a bachelor’s degree as their highest level of education has grown dramatically. Among the 25-29 age group, the number of bachelor’s holders leapt by 59%. What was hailed as the “largest high school graduating class in American history” back in 2009, helping colleges ride out the Great Recession, is today a prospective graduate student market of unprecedented size.
But all is not well in graduate land.
Figure 1 shows self-reported graduate enrollment for Americans aged 25-44 educated to the bachelor’s level but no higher. The decline in the “graduate enrollment rate” (defined here as the proportion of Americans in that age band with a bachelor’s degree but no higher enrolled in graduate school) is clear.
Between 2013 and 2019, the graduate enrollment rate fell by 15%. It then cratered in the early weeks of the pandemic to 23% below the 2013 baseline, before recovering. Enrollment hesitation during America’s initial exposure to COVID-19 makes sense, but why the steady drop between 2013 and 2019? Hasn’t the surge in online master’s programs unleashed consumer demand?
The most obvious explanation for the participation rate fall-off is the robust health of the U.S. economy, which enjoyed the longest period of uninterrupted GDP growth on record from the end of the Great Recession until the pandemic. Unemployment fell to lows not seen in half a century. Of course, higher education enrollment tends to be counter-cyclical. Controlling for inflation, median wages for workers with a bachelor’s degree hit a new high in 2019, further disincentivizing graduate enrollment.
The next question is, as we navigate this next phase of the COVID crisis, will the graduate enrollment rate continue to rebound or start shrinking again? First, let’s disaggregate the data by age, gender, and race:
- Age: the graduate enrollment rate falls with age: about 20% of bachelor’s holders aged 22-24 reported graduate enrollment compared to only about 3% of those in their late 30s and early 40s. Every age group saw declining graduate participation rates over time, and all but one posted gains in 2021. The exception was the youngest cohort, aged 22-24. Their participation rate slumped dramatically this year, even compared to 2020. Why?
- Gender: women have long reported a higher graduate enrollment rate than men (about 20% higher). Both groups saw decline through 2020, but the male slump was more marked, exacerbating male underrepresentation. Why might that be?
- Race & Ethnicity: Black and Latinx Americans are less likely than average to report a bachelor’s degree but among bachelor’s holders are 30-50% more likely to report graduate enrollment. How to explain this? White Americans saw a graduate enrollment rebound in 2021, while Black and Latinx rates remained depressed compared to 2019, if still significantly above that of White rates.
The age question is easiest to answer. The 2021 graduate enrollment rate decline among the youngest cohort is consistent with a preference for campus-based graduate extensions to undergraduate programs and a reticence about the online stand-ins during the pandemic.
But what about the gender and race trends? Here is where graduate degree alternatives come in.
Enter Graduate Alternatives
Just as conventional graduate degree enrollment has grown in recent years, so have degree alternatives—from microcredentials to bootcamps. Many alternatives are offered by universities with ladders into master’s degrees.
Drawing on data from Coursera, edX and other sources, Eduventures estimates that in 2019 some 350,000 Americans with a bachelor’s degree were enrolled in these alternatives, the equivalent of 10-15% of “traditional” graduate enrollment. If accurate, this neatly plugs the enrollment deficit left by the declining graduate enrollment rate in Figure 1.
It is not clear to what extent graduate alternatives are captured in the CPS data. Survey takers ask about “college or university” enrollment, not program or institutional type. But it is a fair assumption that many respondents may judge alternatives as not what the questioner has in mind.
This suggests that the real story of Figure 1 is one of consumer choice rather than non-participation, underscoring the need for more nuanced data collection to tease out the full picture.
Graduate alternatives may also be implicated in the sharp drop in the graduate enrollment rate among White students, and the much higher rates exhibited by Black and Latinx Americans.
The disproportionate share of White men in tech jobs—the focus of many graduate non-degree programs—may betray this shift away from master’s degrees. Blacks and Latinx students may be disproportionately betting on master’s degrees to cement employability in a sometimes-unfavorable job climate just as White men swing toward next-generation degree alternatives.
The Bottom Line
Looked at another way, this “slump” is also innovation in action: the provision of shorter, less expensive, highly targeted alternatives to the master’s norm, widening access, expanding choice and refining value—and confounding data collection.
Yet racial disparities—who enrolls in what—risk perpetuating stubborn inequities.
How is the latest 2021 data shaping up? Current Population Survey data, available monthly for the first half of 2021, shows still depressed graduate enrollment versus the 2019 pre-pandemic benchmark through April but a turnaround in May and June—up 3% and 5% respectively. An unpredictable COVID trajectory plus the pandemic boost to the stock of online graduate programs may explain this resurgence. Perhaps graduate degree alternatives are showing up more often in CPS data, too. Equally, if conventional counter-cyclical logic holds, a decisive U.S. health and economic recovery in the autumn may see graduate enrollment fall off again.
The real test will be whether the coming months and years can produce not only higher graduate enrollment but end the long-term slide in the graduate enrollment rate. Better tracking the graduate non-degree boom—something Eduventures continues to pioneer—is vital to truly understand this dynamic market.
Read our latest report on the adult undergraduate and graduate markets, which includes our Adult Prospect Survey™ data, Adult Postsecondary Demand & the COVID-19 Pandemic: An Introduction.
Thursday August 19, 2021 at 2PM ET/1PM CT
Facebook just changed the rules. Right when enrollment teams were launching themselves into a new academic year and investing in new digital marketing tactics, the social media giant dropped a major announcement. At the end of August, they will reduce the types of ads marketers can show to teenage users (under 18) across their platforms—taking both Facebook and Instagram out of play for interest-based targeting.
Enrollment teams are now left to wonder: what audible can I call to still to effectively reach these teens? How can I get my institution in front of the prospective students who are searching for institution types like mine? Can I no longer rely on Facebook or Instagram in my recruitment efforts?
Join CEO Doug Hughes, VP of Digital Reva Levin, and Digital Director Stephen Roy as they explore the implications this announcement has on higher education and new ways enrollment teams can reinvest their digital marketing resources to successfully shape future classes.
Encoura Case Study: Anderson University
When COVID-19 surged, colleges and universities across the country braced for the unexpected challenges sure to come their way. At the beginning of the recruitment cycle, Anderson University had set forth a strong marketing plan to increase awareness of its online programs and highlight articulation agreements with local technical schools. Amidst a surging global pandemic, the AU team turned to Encoura Digital Solutions to quickly shift its marketing strategy, equipping AU to reach their enrollment goals and surpass previous years’ benchmarks.
Read the full case study to see how Anderson University worked with the Digital Solutions team to overcome the incredible challenges brought on by the pandemic.