A variety of factors influence college and university enrollment, which in turn drives the student housing market. Those factors include enrollment growth, graduation rates and household finances.
Axiometrics, a RealPage company, will soon release its annual Student Housing Analytics Guide, which visually represents data on those topics and many others. Here, in anticipation of the publication, are some explanations behind some of the charts and tables to be found in the Analytics Guide.
As widely mentioned, national college enrollment, the main driver for student housing demand, declined somewhat from 2012-2015. However, enrollment growth turned positive in 2016, according to the National Center for Education Statistics.
National college enrollment increased from 19.9 million in 2015 to an estimated 20.1 million in 2016. Additionally — as depicted in the AxioStudent Analytics Guide, to be released in late August — total fall enrollment for degree-granting institutions is expected to increase to 20.3 million in 2017 and reach 21 million by the end of the forecast period (2022). Those gains may have a favorable impact on off-campus housing. The projected enrollment growth may be partially due to moderation in the job market and, to some extent, the pressure on many public universities, by their respective legislative bodies, to make higher education more affordable.
Enrollment increases at public universities and colleges over the next five years are expected to exceed those at private institutions, though positive growth is forecast for both. Enrollment at public universities is anticipated to grow an average 1.6% per year from 2017-2022, while growth at private universities is projected to average 1.2% per year, according to Axiometrics student housing research.
High School Graduation
High school graduation rates can be seen as one of the leading indicators of college enrollment: Students earning a high school diploma are potential college freshman – and off-campus housing tenants. In recent years, high school graduation rates have increased, even when growth of the high-school-age population may have had some dips or moderation, indicating that the perceived value of higher education continues to be positive.
High school graduation rates have been increasing since 2011 when an adjusted cohort graduation rate metric was implemented across states, districts and schools. Though the rate moderated slightly in 2016, Axiometrics is projecting high school graduation rates to improve in 2017. The forecast also shows an average graduation rate of 83.5% during the outlook – well above the 71.8% long-term-average (as of 1990).
College-Age Population: 18- to 24-Year-Old
The 19- to 24-year-old age cohort comprises most of the college student population and, therefore, off-campus housing renters. This group has been slightly declining since 2014. In 2015, it declined by 0.8% and in 2016 by 1.0%. The decline in size for this specific demographic may have been identified by some when the 14- to 17-year-old demographic declined similarly about five years ago. And 10 years ago, the size of the 7- to 13-year-old demographic – today’s 17- to 23-year-olds – also dropped.
However, Axiometrics’ most recent forecast indicates the 18- to 24-year-old population will increase slightly in 2017 and grow by an average of 0.9% per year during the outlook period (2017-2022).
The expected increase in size of this group may positively affect the levels of first-time degree-seeking enrollees; this specific group is expected to increase by an average of almost 47,000 per year students from 2017-2022.
Students’ (or, more accurately, parents’) income plays a big role in deciding which specific college to attend. Median household income has improved over the past few years. The rate is expected to increase by 1.9% in 2017 and average 2.4% per year during the outlook. But, the cost of attending college is also projected to increase by 2.9% in 2017 by an average of 2.6% per year from 2017-2022.
Affordability and Funding
Students’ ability to obtain financial aid, among other types of funding also is a deciding factor of which school to attend. This factor is especially important when debating between a public or private institution, and the cost that each of these options represents. Though the choice between private and public institutions can be driven by the quality of education expected, a private education usually costs significantly more than a public one.
The difference in cost between public and private schools has been increasing in the past few years. Private schools’ costs increased 3.5% in 2016 alone, with the average cost of attendance at about $39,000. The historical average growth was 2.7% per year. Public colleges’ average cost of attendance was $16,700 in 2016, a 2.8% increase from the year before and above the historical average of 2.6%.
The difference in growth of cost between public and private institutions may affect the difference in enrollment growth between the two (as shown on the first chart).
Costs increases for public institutions have slowed considerably since 2011, primarily due to the increase in state and local appropriations as the economy recovers.
Though cost of attending college continues to increase, the average income earned by education level speaks volumes as, generally, higher education translates into a higher income level.
Further information on these, and other student housing related topics, can be found in the AxioStudent Analytics Guide. The guide will be available to AxioStudent clients by the end of August on AXIOPortal®. Others will soon receive an offer to obtain a copy of the guide after viewing an AXIOPortal demonstration.