Minorities and the Recession-Era College Enrollment Boom.

The recession-era boom in the size of freshman classes at four-year colleges, community colleges and trade schools has been driven largely by a sharp increase in minority student enrollment, according to a Pew Research Center analysis of new data from the U.S. Department of Education.

Freshman enrollment at the nation’s 6,100 post-secondary institutions surged by 144,000 students from the fall of 2007 to the fall of 2008. This 6% increase was the largest in 40 years1, and almost three-quarters of it came from minority freshman enrollment growth.

From 2007 to 2008 (the first year of the recession), the freshman enrollment of Hispanics at post-secondary institutions grew by 15%, of blacks by 8%, of Asians by 6% and of whites by 3%.

Some of this minority enrollment surge is a simple byproduct of demographic change. In a nation whose population of youths is far more diverse than its population of adults, each new year brings a slightly larger share of minority teenagers into the pool of potential college freshmen. In addition, the first year of the recession was a time when young Hispanics, in particular, were completing high school at record rates. According to Census Bureau surveys, the Hispanic high school completion rate reached an all-time high in October 2008 at 70%.2 This was up 2.5 percentage points over October 2007 — a larger increase than for any other racial or ethnic group.

Minority college students tend to be clustered more at community colleges and trade schools than at four-year colleges. Even so, the minority freshman enrollment spike from 2007 to 2008 occurred at all basic levels of post-secondary education. The makeup of the freshman class at the nation’s less-than-four-year colleges and universities dropped from 55% white in 2007 to 53% white in 2008. Similarly, the composition of the freshman class at four-year schools dropped from 64% white in 2007 to 62% white in 2008.

The freshman enrollment boom has not been spread evenly across the nation’s post-secondary institutions. Two-year institutions (most of which are community colleges) saw the greatest increase — 11%. By contrast, the increase at four-year institutions was just 4% and the increase at less-than-two-year institutions (often referred to as trade schools) was 5%.

Another category that experienced large freshmen enrollment increases from 2007 to 2008 was the private, for-profit institutions; these may include four-year colleges and universities, such as the University of Phoenix, as well as two-year and less-than-two-year institutions. Freshmen enrollment grew 11% at these schools.

(The growth of the private, for-profit schools as well as issues related to growing student debt burdens will be the subject of a U.S. Senate Health, Education, Labor and Pensions committee hearing on June 24th.)

At the level of individual institutions of higher education there has been vast disparity in rates of freshmen enrollment growth. Indeed, half of the total increase in freshmen enrollment occurred at just 109 colleges and universities out of nearly 6,100.

I. Record Recession-Era Freshman Enrollment

In fall 2008, a record 2.6 million first-time, full-time freshmen were enrolled in the nation’s postsecondary institutions. This was 144,000 more than the 2007 freshman class, a 6% increase, which was the largest since 1968 at the height of the Vietnam War.3

Booming freshman enrollments are the direct result of at least two factors. First, the nation’s high school graduating class in 2008 (3.3 million) is estimated to have been the largest ever (National Center for Education Statistics, 2010a). Second, and more importantly, record rates of young high school completers are immediately enrolling in college. In October 2008, 68.6% of high school completers were enrolled in college in the fall immediately after completing high school (matching the previous high). In October 2009, a record 70% of recent high school completers immediately entered college (a historical high for the data series, which began in 1959) (Bureau of Labor Statistics, 2010).

This growth in freshman enrollment coincided with greatly diminished labor market opportunities facing the nation’s youths. The official Bureau of Labor Statistics unemployment rate for teens ages 16 to 19 rose to 21% in December 2008 (from 17% at the recession’s onset in December 2007). The teen labor market deteriorated even more in 2009. By October 2009, teen unemployment reached its highest level (28%) in the history of the series dating back to 1948. By many labor market indicators, youths have been among the groups most severely affected by this recession (Hipple, 2010).

The strong growth in freshman enrollment suggests that youths do “adapt to circumstances.” That is, when faced with a decline in employer demand, they boost their school enrollment and continue living with their parents rather than striking out on their own (Card and Lemieux, 2000). Some detailed empirical studies indicate that U.S. college enrollments in modern times have behaved countercyclically (Dellas and Sakellaris, 2003; Betts and McFarland, 1995). Labor economists point out that a youth’s opportunity costs or forgone labor market earnings are one of the larger costs of pursuing college. During a recession, forgone earnings may be diminished and college effectively cheaper.

This report examines the most recent available college freshman enrollment data to look at the characteristics of these freshmen as well as the nature of the institutions that are educating them. In some ways, the freshman enrollment boom has been quite widespread and in other ways highly circumscribed. In terms of student characteristics, the enrollment boom seems to have been broad-based. For example, both male and female freshman enrollment increased 6%. The next section shows that much of the freshman growth was due to minority or nonwhite students. Reflecting the changing demographics of the nation’s high school graduating classes, around three-quarters of the freshman enrollment boom is due to minority freshman enrollment growth. Furthermore, the minority freshman growth was not confined to two-year colleges and less-than-two-year institutions. The minority growth was widespread in terms of the basic tiers of higher education.

The third and fourth sections of the report examine the impact of the growth on specific postsecondary institutions. It shows that the enrollment boom was concentrated in certain states and highly focused on a very small number of large colleges and universities. Of the 144,000 increase in freshman enrollment, about 72,000 occurred at just 109 colleges and universities, so less than 2% of the nation’s colleges and universities accommodated half of the enrollment boom.

The fifth section returns to focus on students and examines the impact of the recession on student employment. The last section examines whether large freshman classes have continued since 2008.
II. Growth in Freshmen by Race/Ethnicity

Large freshman enrollment growth was evident among the nation’s racial and ethnic minorities. Overall freshman enrollment was up 6%. Hispanic freshmen increased by 40,000 compared with 2007, a 15% increase in enrollment and the largest of any of the major racial/ethnic groups.4 In comparison, freshman enrollment of black students increased by 8% and of Asians by 6%. White freshman enrollment increased 3% over 2007.

Not all college and universities are the same, and an important distinction concerns which colleges and universities the additional minority freshmen attended. Minority college students are concentrated at two-year colleges and less-than-two-year institutions in comparison with their white peers (National Center for Education Statistics, 2010b). Among undergraduates at four-year colleges and universities, minority undergraduates on average enroll at the less academically selective institutions compared with white undergraduates (Alon and Tienda, 2005).

The recent large increase in minority freshman enrollment was not disproportionately concentrated in the lower tiers of postsecondary education — that is, two-year colleges and less-than-two-year institutions. Total freshman enrollment increased by 144,000 students. White freshman enrollment increased by about 39,000 over all post-secondary institutions, so white freshmen accounted for about 27% of the freshman increase. The increase in white freshmen did not disproportionately occur at four-year schools. Total freshman enrollment at four-year institutions increased by about 55,000 freshmen, of whom only about 12,000 were white. So white freshmen accounted for about 23% of the freshman growth at four-year colleges and universities. Alternatively, nonwhites accounted for about 73% of the freshman growth throughout postsecondary education and about 77% of the growth at four-year schools.

Another way to grasp “who went where?” is to examine the racial composition of the freshman cohorts in each year. In 2007, whites made up 55% of the freshmen at less-than-four-year institutions. In 2008, whites were only 53% of the freshmen in these lower tiers of post-secondary education. But, at least in terms of broad tiers or categories of higher education, whites were less prevalent everywhere. In 2007, whites constituted 64% of the freshmen at four-year colleges; by 2008, the white share of freshmen at four-year schools had diminished to 62%.

In short, since 2007 there has been significant growth in minority freshmen (particularly Hispanic) and there has been significant minority freshman growth in each tier of postsecondary education, including four-year colleges and universities.
Explaining Robust Minority Freshman Growth

Given lag times in the availability of data, it is difficult to fully disentangle all the causes of the growth in minority freshman enrollment since 2007. For example, one possible explanation is that there has been a disproportionate increase in the number and share of minority students among the nation’s high school graduating senior classes. The most authoritative figures on the characteristics of high school graduating classes are compiled by the National Center for Education Statistics (NCES), but as of April 2010, the most recent school year for which NCES had published such data was 2006-2007.

However, Census Bureau household surveys provide more timely snapshots that allow for an examination of a closely related indicator: the number of 16- to 24-year-olds who completed high school in the calendar year of the survey. And, indeed, these data indicate that minority youth accounted for much of the growth in the number of 16- to 24-year-olds who recently completed high school. From October 2007 to October 2008, the total number of recent high school completers increased by about 200,000. The estimated number of white recent high school completers increased by about 47,000 over that period, so whites accounted for only about 24% of the growth in the stock of young high school completers. These data strongly suggest that the minority freshman college enrollment spike that occurred from 2007 to 2008 is closely related to the minority high school completion spike that occurred the same year.

Census data also show that the high school completion rate reached an all-time high of 84.9% in October 2008, and that high school completion rates for both white and Hispanic 18- to 24-year-olds reached all-time highs in 2008.5

The number of recent Hispanic high school completers grew by 29% from October 2007 to October 2008, according to the Census Bureau household survey. There are more Hispanic college freshmen in part because more Hispanic youths are finishing high school.

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1. Fall 2008 is the latest year available on freshman enrollments based on the Department of Education’s administrative data. However, the U.S. Bureau of Labor Statistics reported in April that the rate of immediate college entry of high school graduates increased from October 2008 to October 2009 and was at its highest level on record. So the growth in the nation’s college freshman ranks may have continued from 2008 to 2009; but we do not have official Department of Education data to confirm that.
2. This is the share of all 18- to 24-year-olds who have completed high school.
3. The freshman enrollment figures in this report refer to first-time, full-time, degree-seeking undergraduates. Unless otherwise noted, freshmen at all postsecondary institutions participating in Title IV federal financial aid programs are included, including those at institutions that don’t grant degrees.
4. Beginning with the fall 2008 data collection, the IPEDS altered the racial/ethnic classification of students to allow institutions to report students of “two or more races.” So in principle the racial/ethnic classification of freshmen in 2008 is not comparable to 2007’s. In practice, only 3,424 first-time, full-time freshmen reported being of “two or more races” in 2008 (or 0.1%), so the racial/ethnic identity of freshmen in 2008 is comparable to 2007.
5. Census high school completion rates count as completers youths who graduate with a high school diploma as well those attaining equivalent credentials (GEDs).