US universities are facing, in the words of a Kansas State University spokesperson, “a perfect demographic storm.” The number of students, domestic and international, is declining sharply.

Why? For international students, it’s a number of factors: Trump mainly, a strong dollar, the rise of viable options (Canada, UK, Australia, New Zealand and Ireland), and lack of post-study work opportunities. According to a preliminary survey by IIE, on an average, new student enrollment has declined by 7%.

And domestic students? According to the National Student Clearinghouse Research Center, over the last year, the number of undergraduates dropped to 1%. One reason is the decline in birthrate a couple of decades ago. Another is the steep tuition fees. According to NSCRC’s Doug Shapiro, “Affordability issues are the biggest hurdles. There’s only so much you can do with recruiting if the families can’t afford the tuition.”

He has a point. 70% graduates in the US have one thing in common – debt. According to a US News report, in 20 years, the average tuition and fees at private national universities have jumped 157%; the out-of-state tuition fees at public national universities have risen by a whopping 194%. The sharpest increase is in the tuition for in-state public national universities – 237%. No wonder young Americans are drowning in debt. And balking at the prospect of a university education.

There are fewer domestic students, fewer international students, and the competition for the shrinking pool is intense. Let’s take Kansas State as an example. According to a statement released earlier this year, the university saw a 20% decline in applications. The overall enrollment declined by 984 students this year. 

Private schools are in the same boat. The Wall Street Journal reported that for each of the last three years, enrollments at private non-profit schools have fallen. This has earlier led to private schools aggressively discounting tuition to boost enrolments and public universities levelling tuition fees for students across the 50 states. A battle has begun.

Oglethorpe University, a private liberal arts college in Atlanta, has offered to match the tuition fees of any flagship public university for high-achieving students. Robert Morris University, another private institution, released a statement offering to price match any public university in Pennsylvania and throw in a $3000 scholarship. This is only for in-state students. Public universities are not far behind. Michigan, South Dakota and Nebraska have levelled the fees for all domestic students. If you’re applying to these universities, it doesn’t matter which state you come from, you pay the same as a local. Private colleges have also aggressively discounted tuition in 2017-18. According to the National Association of College and University Business Officers, the average share of scholarships and aid for full-time freshmen was 49.9% of tuition and fees revenue. Smaller colleges are in fact offering higher discounts in order to attract students. The report said the situation was “precarious.”

So, how will price-matching impact US universities and students? Will it boost enrollment or weaken the financial infrastructure? Is it a strong enough answer to the main problem being faced by the US higher education sector – a shortfall in students? We will look to next year’s numbers.