Decline in college enrollments threatens state economy – Twin Cities

The hot job market may be good for the state’s young workers, but the continued decline in college enrollments could have lasting consequences for Minnesota’s economy, according to the head of the state’s largest higher education system.

Minnesota Chancellor Devinder Malhotra has asked lawmakers for a record $350 million increase in state support for the state’s 26 colleges and seven universities.

System enrollments are forecast to fall another 3.8 percent this school year and 31 percent over the past decade, and Malhotra said the system needs that money to grow again.

When the economy is strong, college enrollment typically falls, Malhotra said. But with fewer people earning college degrees, fewer qualified candidates are left to meet employers’ needs.

“The decline in enrollment is severely limiting our ability to provide Minnesota with the talent and workforce it needs, exacerbating labor shortages and threatening the state’s economic vitality,” he told lawmakers last week.


The Legislature wants 70 percent of Minnesota adults to have some sort of post-secondary degree, but the current number is in the mid-50s, Malhotra said.

In addition to an oversupply of good-paying jobs, the coronavirus pandemic has displaced many prospective college students. Just 61 percent of state high school graduates in 2021 enrolled in college this fall, compared with a peak of 71 percent in 2013.

Another problem for colleges are demographic trends in the Midwest, which are shrinking the pool of prospective students.

Malhotra said the state of Minnesota is trying to recruit more students who are underrepresented in college, such as low-income teens and people of color. They’re also trying to attract more adults who are already in the workforce with job-specific training.

And they want the state to pay for new investment in student services, which would help keep more students enrolling. About 30 percent of first-year students in the system don’t come back for their sophomore year; Addressing that would be “a game changer for enrollment,” Malhotra said.

Too many schools?

A huge influx of federal funds for pandemic recovery has kept many college and university budgets afloat over the past three years, but that money is running out. At the same time, the state has an unprecedented budget surplus and could afford to shoulder a heavier burden of higher education funding to stave off tuition increases.

Bill Maki, Minnesota state vice chancellor for finance and facilities, said the system is currently in good financial shape, but “we have some structural shortcomings in many of our colleges and universities as federal funding goes away.”

Rep. Kristin Robbins, R-Maple Grove, called the enrollment declines in the state of Minnesota “staggering” and suggested executives close some campuses.

“I don’t think we can invest at the scale needed to meet the goals when we have so many campuses to spread out the resources,” she said last week.

Governor’s Budget

Gov. Tim Walz’s budget recommendation provides the state of Minnesota with a $131.5 million increase in state working capital over the next biennium.

He has also proposed a $73 million biennial increase for the University of Minnesota’s system, which was asking for $205 million.

US enrollment has been relatively stable during the pandemic compared to the state of Minnesota.

Enrollments across the five campuses fell just 2.4 percent in 2020-21 and another 1.2 percent a year later. This year they have fallen slightly, just a tenth of a percent.

However, US outlying campuses are responsible for most of these losses.

The Twin Cities campus has declined the equivalent of 304 full-time students — 0.6 percent — since 2019-20, while the four smaller schools combined lost 1,954, or 14 percent, of their enrollments.

Rochester’s enrollment is up 12 percent since the pandemic, while Duluth (13 percent), Crookston (16 percent) and especially Morris (30 percent) have all suffered sharp losses.


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