College enrollment's surprising comeback in 2023 came as institutions finally caught up to Gen Z’s thirst for skills-based hiring and training

U.S. colleges seem to have caught on to the skills-based revolution. 

After falling for a decade, college enrollment in the U.S. finally ticked up last year, with higher education institutions across the nation adding 176,000 students, according to the National Student Clearinghouse Research Center.

In what executive director Doug Shapiro called “a welcome change,” the number of enrolled students rose 1.5% between 2022 and 2023, to 18.3 million, after falling steadily from 20.5 million in 2011. “The number of students in college has finally turned the corner after years of decline,” Shapiro said in a statement. 

But the numbers don’t mean that the four-year liberal arts degree has made a comeback. If anything, colleges are catching up to demographic and cultural shifts that prioritize concrete skills and question the ballooning costs of education. The main one is the education hack beloved by Gen Z: Skills-based training.

Just look at the data: The largest enrollment rise was for community colleges with strong vocational programs, which posted a 16% increase from 2022 to 2023, the NSCR noted.

Students “are voting with their feet,” Kathleen deLaski, founder of Education Design Lab, said on LinkedIn, noting that community colleges were growing into “new role[s] as regional talent brokers for high demand jobs.” 

Elsewhere, interest in trade schools is also booming, with enrollment up for construction trades, repair, and precision production programs, the NSCR noted. 

‘Budget-minded’ students

The shift reflects a growing practicality among Gen Z as well as the lingering effects of the pandemic, when millions of young people were shoved into subpar remote-learning setups that turned off many from further education. A whopping 68% of Gen Z now say they don’t need a college degree to be successful, according to a YPulse survey. 

This youngest Gen Z cohort also says that work experience is more important than schooling, The74 reported. As Fortune previously reported, more than half of college students struggle to stay focused in classes they don’t believe teach practical skills. And having seen what a high debt load can do to Gen X and Millennial peers, Gen Z is understandably wary of college costs.

(At the high school level, school attendance has plummeted since the pandemic and has just kept on dropping.)

Community colleges, many of which offer shorter, employment-focused programs, “offer a pretty good alternative for the budget-minded consumer,” Thomas Brock, director of the Community College Research Center at Columbia University’s Teachers College, told Inside Higher Ed.

“Many [students] really are thinking about postsecondary education primarily for their career ambitions, looking at opportunities to acquire skills that they can use to get better jobs, to move ahead,” he told the outlet. 

In a similar vein, among private four-year schools, the most selective institutions as well as open-access schools, where anyone can enroll, saw increases, while others saw declines. 

Eric Greenberg, president of the consulting firm Greenberg Educational Group, told CNBC that families are becoming “more value-conscious” in their education decisions, including focusing on pre-professional programs that more clearly lead into a specific career track.

For much of the late 20th century, getting a four-year college degree was seen as a sure path to the good life—career success in a (white-collar) job and a steadily increasing standard of living. That perception led to an explosion in college enrollment as more and more young people got degrees. 

But shortly after the Great Recession some 15 years ago, American youth began souring on college in increasing numbers. Growing educational attainment did little to prevent a decline in living standards among Americans even as it loaded up 44 million of them with a record $1.7 trillion in debt. Today, most teenagers believe only a two-year degree or certificate is all that’s needed for success. 

Employers, too, have publicly questioned the value of a four-year degree. Since then-IBM CEO Ginni Rometty coined the term “new collar jobs” in 2011, major companies including Apple, Delta, Google, and General Motors joined IBM in dropping long-held degree requirements. By late 2022, only 4 in 10 U.S-based jobs posting required a bachelor’s degree, according to an analysis from Burning Glass Institute. 

That attitude shift, combined with demographic changes—smaller numbers of college-age people—have led enrollment to fall over 2 million since 2011. 

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