Colleges & University Death Spiral

In January 2022, we wrote, One Million Fewer College Students in 2022 and followed that article up with Colleges Scrambling for Students where we outlined the crisis that few people are talking about up until now…From CNBC, Why more and more colleges are shutting closing down across the U.S.:

We’ll be graduating our lowest high school classes by population in 2025. And most enrollment professionals have been wringing their hands about this date of 2025, but many schools have seen those enrollment declines already.”

About 95% of U.S. colleges rely on tuition, according to Franek, meaning they rely on money from students to operate. Dwindling enrollment numbers mean less money, fewer student offerings and eventually a shuttered institution.

CNBC.com

The crisis doesn’t end there, in the United States we have millions of boomers retiring each year, enrolling in social security & medicare or medicaid and essentially leaving the labor force and on the other end, we don’t have enough young people graduating high schools or college/university to replace those leaving the labor force.

We are depleting the labor force at both ends of the human lifespan spectrum: young and old.

In Fed Pause, Demographics and Inflation, we make the case that the Fed is well aware of this labor force doom loop that will ultimately result in higher inflation as there won’t be enough workers to maintain the current economic ecosystem much less enable it to grow.

We don’t deal in hyperbole or hysterics here, we deal in aggregate data from a variety of sources but here are a few articles outlining the projected shortfalls with airline pilots, construction workers, power sports and hotels.

Ironically, with colleges and universities failing financially and shuttering, it begs the question of where the needed people will get their education to fill the shortages.

We’ll find a way to profit from this coming crisis so stay tuned, stay profitable and stay solvent…