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The Gilded Age of Higher Education

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The 2022 college admissions cycle highlights two contradicting realities in higher education. On one hand, top-tier universities showcased their lowest admissions rates in history and a more socioeconomically diverse set of applicants. But greater economic inclusion at top institutions is not synonymous with equal opportunity. Since 2014, the rate of low-income Americans enrolling in college has been decreasing. Compared to previous generations, most young American adults are now more eager to earn a paycheck, placing a higher value on immediate income than a long-term career. Looking ahead to an increasingly global and technology-infused workspace, the growing differences in wealth and opportunities between the educated elite and low-skilled workers will become more pronounced, creating a more unequal workforce. 

Following the “golden era” of American higher education—the period between 1960 and 1970 when tuitions held at a constant level while investment in college campuses soared—colleges across the country saw an increase in enrollments. Perhaps it was changing demographics (the Baby Boomer generation began enrolling in universities in the mid-1970s), increased financial accessibility to college through federal grants, or a cultural shift in the perceived value of higher education that propelled this movement. Whatever the reason, from 1965 to 2014, enrollment of students in US universities increased from 5.92 million to 20.2 million students, peaking in 2011 at 21.01 million. After 2014, however, enrollments started to decline, and the Covid-19 pandemic only turbocharged this trend. 

Since 2019, 24 states across the United States have seen an average decrease of 4 percent in university enrollment. Five states in particular—Vermont, Alaska, Michigan, New Mexico and Pennsylvania—have seen enrollment declines higher than 10 percent. Economic uncertainty and employment hardship during the pandemic consolidated creeping doubts among the young adults who were already wary about attending college. Virtual classes, a rising minimum wage, and high tuitions prompted recent high school graduates to question the long-term value of higher education and instead enter low-paying jobs immediately after high school.

The perception that economic prosperity will arise from immediate employment after high school, however, is misguided. The reality is that the lifetime earnings of a college graduate are significantly higher than those without a college degree. A Georgetown University study found that median lifetime earnings are directly related to educational attainment, showing that Americans with a high school diploma earn $1.6 million in their lifetimes on average. Meanwhile, a worker with a bachelor’s degree earns an average of $2.8 million dollars, 75 percent higher than those just a high school diploma. Lifetime earnings increase even more for individuals with a master’s degree, totalling $3.2 million. In the long term, these significant differences in wages create immense wealth disparities in the United States. 

The current economic inequality in the United States means that the decline in enrollments does not affect all economic classes equally. Even before the pandemic, students from affluent backgrounds were more likely to enroll in four-year colleges. According to an analysis conducted at the University of Pennsylvania, this trend continues to the present day. In 2021, the median income of a family who sent their children to college was $58,500, 89 percent higher than the median income of a family whose children chose not to attend college. Even students who attend two-year colleges show a 39 percent lower median income than students attending four-year institutions. The existing disparities in wealth between students who choose to attend college and those who do not will grow wider as the difference in educational attainment, powered by the enrollment decrease, becomes more pronounced. 

This growing chasm will become more prominent as elite American colleges become more selective. Since the elimination of the standardized test requirement, the amount of applications to top institutions have soared and acceptance rates have fallen. In 2022, the ten hardest universities to gain admissions to in the United States all had acceptance rates of less than 8 percent. Despite these falling admission rates, top-tier universities still boast their diverse student bodies and financial aid initiatives. While it is true that college campuses now welcome a more inclusive group of students, this should not be confused with greater equity in the college process. In reality, lower enrollment rates and increasing competitiveness will, overall, decrease human capital in the United States. 
The consequences of decreasing enrollment in the United States will change the makeup of the American workforce. While top-tier institutions lower their acceptance rates, the non-college-educated majority will continue to grow. Rather than a “golden age” of higher education, we might be entering a new “gilded age,” in which elites will continue to participate and thrive in their tight-knit, highly educated circles while the bottom quintiles suffer from a stagnating quality of life.