Enrollment at nonprofit colleges and universities held generally steady in fall 2015 despite downward pressure from demographic shifts, Fitch Ratings says. This reflects continued fundamental demand for these institutions.

According to the National Student Clearinghouse, total higher education enrollment fell about 340,000 to approximately 19.28 million from fall 2014 to fall 2015. However, four-year nonprofit public and private college enrollments were steady. Four-year, for-profit institutions saw over one-half of the national decline. The balancing factor came mainly from public two-year institutions, which are countercyclical in nature, and typically lose students to the workforce as the economy improves.

Fitch continues to expect that regional population trends will pressure enrollment at some nonprofit public and private four-year institutions. We believe declines will mostly affect smaller, less competitive or regional institutions in parts of the country with declining numbers of high school graduates.

While the Department of Education's National Center for Education Statistics projects that total high school graduates will remain essentially flat through 2022, the Western Interstate Commission for Higher Education's report, "Knocking at the College Door," notes that the number will vary widely by state and region. Some New England states are expected to show declines ranging from 5%-15%, while Colorado, Texas and Utah will likely continue to grow through 2028.

Fitch believes individual institutions may be able to mitigate adverse demographic trends through effective enrollment management (marketing, student retention and admissions & aid policies) and strategic planning to align programs and pricing to market demand.

Related Research: "2016 Outlook: U.S. Colleges and Universities" below and click here to listen to related conference call replay.

Additional information is available on www.fitchratings.com.

The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article, which may include hyperlinks to companies and current ratings, can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.

Related Research

2016 Outlook: U.S. Colleges and Universities

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=874786

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