EconExtra is a series of posts that go beyond the textbook, relating current events and recent developments in economics to content standards, and providing resource suggestions to help you incorporate the current events into your lessons.  This week's issue can be incorporated into discussions of individual decision making and opportunity costs, or broader discussions of investing in human capital.

The Issue

The pandemic seems to have “turbocharged” the decade long decrease in college and enrollment. According to the National Student Clearinghouse, there are 1.2 million fewer students than there were in the fall of 2019. The two-year drop is the largest drop in 50 years. While community colleges are being hit the hardest, four-year enrollment dropped significantly this past year too. Another interesting measure is that of those high school seniors who decided to take a “Covid Gap Year” in 2020, only 2% ended up enrolling in school in 2021.

It is likely that these “missing” students are working. Given how hourly wages for service industry jobs have increased dramatically in some places over the last two years, this may seem to be a smart move. However, putting off college will likely make getting that degree more difficult and more costly. The debate is whether or not these students are trading near-term income for higher earning potential later on.

In one study from Georgetown University, bachelor's degree holders were found to "earn a median of $2.8 million during their career, 75% more than if they had only a high school diploma." (NPR)

And don’t forget we already have a skills gap in the US, so fewer educated and skilled workers also threatens the economy.

Assignment

This NPR article is thorough and clearly states the statistics around the current trends, and the theories about why. They also include research on the benefits of an education to individuals and society. Students should begin by reading this. There are links within the article if you (or the students) are interested in pursuing any particular tangent or study quoted. 

The questions below can be used in whatever format you wish the students to address them.

1) Does it surprise you that college enrollment has been dropping over the last decade? What were some of the reasons given for this trend? Do you think the Covid drop will eventually reverse itself? Why or why not?

2) Which type of institution had the largest drop in enrollment? Which socio-economic group seems to have been impacted the most? What do you think the short-term impacts are for those who chose not to enroll?

3) What are the long-term financial impacts to those not enrolling? What are the non-economic (negative) externalities attributed to not pursuing education beyond high school?

4) What are the anticipated impacts on the overall economy if these students don’t resume their education, and if the downward trend in enrollment continues?

5) Do you know students who decided against furthering their education these last two years? What did they do instead? Have they/will they resume their education?

About the Author

Beth Tallman

Beth Tallman entered the working world armed with an MBA in finance and thoroughly enjoyed her first career working in manufacturing and telecommunications, including a stint overseas. She took advantage of an involuntary separation to try teaching high school math, something she had always dreamed of doing. When fate stepped in once again, Beth jumped on the opportunity to combine her passion for numbers, money, and education to develop curriculum and teach personal finance at Oberlin College. Beth now spends her time writing on personal finance and financial education, conducts student workshops, and develops finance curricula and educational content. She is also the Treasurer of Ohio Jump$tart Coalition for Personal Financial Literacy.

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