College in the Year 2040

What does the future hold for the next generation of college students? Most of the changes 25 years from now will be a straightforward extrapolation of current trends.

Cuts in Government Support of Postsecondary Education

Federal and state governments will continue to cut their support of postsecondary education on a per-student, constant dollar basis. This will shift more of the burden of paying for college from the government to students and their families. Increases in family income will not keep pace with increases in the net price of a college education, contributing to increases in average student debt at graduation. Some students will react by shifting their enrollment from higher-cost colleges to lower-cost colleges, such as from 4-year colleges to 2-year colleges.

Public colleges will react by shifting more of their enrollment to out-of-state and international students, who pay higher tuition, making the student body at public colleges look more and more like private non-profit colleges, albeit with lower average family income.

Colleges will also compensate for revenue cuts by increasing class sizes, by offering classes less frequently and by hiring adjuncts and contract lecturers instead of full-time faculty. Tenured faculty positions will become less common. The quality of education will decrease and it will take longer for students to graduate.

College Costs and Financial Aid

There will be greater transparency concerning college costs and financial aid. There will be mandatory standards for college financial aid award letters, with required disclosures concerning net price and policies that affect the net price. The use of prior-prior-year income in determining financial aid eligibility will have been adopted, allowing students and their families to factor cost into the initial selection of schools. Standardized disclosures, along with better counseling, will help students and families make more informed decisions about the tradeoffs between affordability and quality.

Financial literacy training will be incorporated into the secondary school curriculum in most states, helping students make smarter borrowing decisions.

Scholarships from private sources will increase, but not enough to compensate for declines in average per-student support and grants from federal and state government sources and increases in college costs.

There will be greater simplicity in student aid programs, such as one grant, one student loan and one student employment program. Education tax benefits will also have been streamlined. There will either be a unified vehicle for saving for college and retirement or simplified methods of transferring money between college savings and retirement plans. All state prepaid tuition plans will have been replaced with 529 college savings plans.

Student Loans

Student debt at graduation will continue to increase by $1,000 to $2,000 per year. Student debt at graduation for a Bachelor’s degree will be more than $70,000 in the year 2040, more than double the current average debt. Almost all students will graduate with some education debt. Parent debt will also double, with about a third of parents borrowing to help their children pay for school.

Despite the dramatic increase in student loan debt, the debt will remain affordable, on average, because incomes will also increase. Average starting salaries for college graduates will be about $80,000. Nevertheless, some students will graduate with above-average debt for occupations that don’t pay as well.

Higher debt will be manifested in the form of longer repayment terms, as monthly loan payments maintain a constant percentage of monthly income.

Because of greater focus on the tradeoffs between net price (affordability) and the value of an education, the percentage of students graduating with excessive debt as compared with income will be stable. Despite improved disclosures and better counseling, some students will still make bad decisions. The cumulative debt for graduate and professional students will increase faster than cumulative debt for undergraduate students, especially for students pursuing professional degrees in law and medicine. A major newspaper will run a story about a student graduating from law school with about $1 million in student loan debt.

Educational investments, where investors provide financial support in exchange for a fixed percentage of the student’s income after graduation, will gain some traction as the availability of historical cash flow data helps make investors feel more comfortable with the concept. But traditional amortized education loans will continue to dominate the education financing marketplace. State proposals for educational investments will not be successful because of the difficulties in making correct program design decisions.

Alumni contributions to colleges will be affected by increases in debt at graduation, except at the wealthiest colleges. The percentage of alumni donating will decrease, but the average amount given per donor will increase as the financial well-being of alumni becomes increasingly stratified.

Financial aid for graduate and professional school will be predominantly in the form of student loans and assistantships, with fellowships reserved for academic fields of strategic national importance.

Student Demographic and Enrollment Changes

College enrollment will be 10% to 20% greater than today, but enrollment patterns will be influenced by affordability and educational outcomes (e.g., return on investment). Low- and moderate-income students will shift their enrollment to lower-cost colleges, such as from private non-profit colleges to public colleges and from 4-year colleges to 2-year colleges. Most of the enrollment growth will be among low-income and minority students. Minority students will become the new majority, with Caucasian students representing less than half of college enrollments.

The shift in enrollment from 4-year to 2-year colleges will contribute to ongoing declines in Bachelor’s degree attainment by low- and moderate-income students. Attempts to improve degree attainment rates at community colleges will demonstrate only slight success. Nevertheless, Bachelor’s degrees and more advanced degrees will become more important in the workforce.

The U.S. ranking in the Organization for Economic Co-operation and Development (OECD) statistics concerning tertiary educational attainment will continue to decline as other countries catch up and invest more in postsecondary education.

Enrollment at private non-profit colleges will tilt more toward wealthier students, as the low- and moderate-income students increasingly shift enrollment to lower-cost colleges.

Enrollment at second- and third-tier private non-profit institutions, which are among the most expensive and least generous, will decline. Small liberal arts colleges that are tuition dependent, not well-known nationally and less selective will fail financially as enrollments drop, forcing them to merge with nearby colleges, cut costs to increase enrollments (and achieve greater economy of scale) or close. Colleges with the highest net prices will be prone to failure as families become increasingly sensitive to the return on investment.

Colleges will increasingly rely on enrollment management technology, modeling enrollment behavior. This will continue the shift in institutional grants from need-based to non-need-based, but the benefits of leveraging will decrease as more colleges try to use financial aid to influence the enrollment of full-pay students. These students will continue to enroll at the most selective colleges and universities.

College campuses will become more feminine, with college enrollment shifting from 57% female today to 63% in 2040.

There will be a slight shift in college enrollment toward older, nontraditional students. There will also be more emphasis on lifelong learning and continuing education. Employers will take on a greater role in postsecondary education, providing more internships and on-the-job training, as well as more public/private partnerships like the Starbucks/Arizona State University relationship.

Shift toward Science, Technology, Engineering, Mathematics and Healthcare

The implementation of Gainful Employment regulations, and the 2020 expansion of these regulations to all colleges, not just for-profit colleges, will cause schools to emphasize academic majors that are more employable and which have greater income. Combined with families increasingly focused on the financial returns of a college education and new students becoming more job-focused, more students will major in science, technology, engineering and mathematics (STEM) and technical fields (i.e., health care, electricians, HVAC techs) and there will be a gradual “STEMification” of liberal arts fields. Enrollment in liberal arts fields will not decline as much as expected because of a perception of STEM fields as being more academically challenging. But, most of the growth in enrollment will be in STEM and technical fields.

State governments will create incentives to attract students majoring in STEM fields. These efforts will not increase the number of state residents majoring in STEM, but will shift enrollment of students who are interested in STEM from states that do not offer similar incentives.

STEM graduates will continue to command above-average salaries, as their problem-solving and technical skills provide practical utility that cannot as easily be treated as a commodity.

Use of Technology

There will be increased use of technology in the classroom, but the value will be questioned. Massive Open Online Courses (MOOCs) and online education will continue to be hyped as a magical solution to college affordability, but will fail to fulfill their promises. The students who are most capable of benefiting from online education are precisely the ones who will continue to enroll at the most selective colleges. Other students need more handholding and one-on-one personal contact than the MOOCs can provide because learning is difficult. Struggling to learn a concept is part of what makes learning effective. This fundamental lack of scalability will not be solved until robust artificial intelligence (AI) technology becomes available more than 50-100 years from now. In particular, artificial tutoring and knowledge-based teaching technology will need robust AI technology to diagnose how students are misunderstanding the subject matter, so that just-in-time remediation can address the students’ specific problems.

An increase in the number of distractions will cause attention spans in an online world to get shorter, making online education less effective for students who have difficulty concentrating. Instead, entrepreneurs will create education boot camps where an intense, highly-compressed academic schedule with no downtime will yield impressive results for a small minority of students. Most students will not be able to handle the pressure and need to concentrate associated with these immersive programs, which are akin to drinking water from a fire hose. Students will study from 8 in the morning to 8 in the evening until program completion. Examples will include intensive 6-month programs in software engineering and foreign language fluency.

Electronic textbooks will become more common and more faculty will self-publish their textbooks, replacing traditional publishers with Amazon, Apple and Barnes & Noble as middlemen. Textbook prices will drop by about a third. Digital publication will have a more transformative effect in the online and free publication of academic journals.


Education and scholarship foundations will become more politically active with regard to issue advocacy, following in the footsteps of the Gates and Lumina foundations and a more hands-on approach by Internet millionaires and billionaires. Students will sometimes serve as the swing vote in Presidential and Congressional elections, causing politicians to cater more to the interests of student constituents, albeit superficially. However, students will not emerge as a strong voting block because they remain disorganized, lack unity and fail to support a small set of focused proposals.

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