Higher Education is in the process of flux, of swift change that is set to take place over the next couple of decades, with dramatic effects felt as soon as the late 2020s. We see great changes happening in the University student population and financial landscape, particularly regarding increased diversity and scholarship allocation.

We know that the birth rate in the United States dropped by 13% after the 2008-2009 financial crisis and recession, so we can reasonably expect that the number of incoming students will sharply decline in the coming years. Even though the number of high school graduates is on the decline, student bodies composed of first-in-family college students, students of color, and low-income students is on the rise, the demographics of which depends on the region.

Higher education institutions outside of the Top 100 will experience fierce competition in within their individual local markets, and thus, will be the most affected by the current and upcoming changes.  According to the Center for American Progress, “Current demographic trends show that non-Hispanic whites will no longer comprise a majority of the U.S. population by 2050, when they will make up just 47 percent of the population. Already, half of all U.S. births are children of color.” With changing student market demographics, how do Universities prepare for these changes to best serve their students, while maintaining profit and integrity?

If colleges, especially regional institutions, two and four year degrees, are set to experience a major decrease in applicants and attract a quite diverse student body, the spotlight of focus needs to equally focus on recruitment and retention. Universities will remain sustainable by supporting the students they already have, rather than attempting to re-fill their student pipelines.

As the trends continue, colleges and state universities can expect to have fewer students who can pay the full tuition costs. How should a University financially equip a more diverse, low-tuition-paying range of students who are most likely to enroll and entice them to stay for the entirety of their four-year degree?

Colleges must be mindful in how they allocate funds and how they choose to support their students throughout their academic careers. Particularly, Universities can be careful to not overpay students in scholarships and make sure to properly fund students  who will be the first in their families to attend college, transfer students, and students with low-income backgrounds. In the coming years, Universities will attract students for whom the cost of tuition presents a challenge to enrollment, and thus funds need to be distributed to students who are in need and are most likely to enroll.

It is a question of balance, of strengthening and mindfulness, to be able to hold the big picture of the University’s health, financial and otherwise, in one hand, and the keep laser focus on the students who are most deserving of specialized support.

Students are leaving their degrees in increased number because of financial obstacles to tuition. The average Pell Grant afforded to students totals about two thirds of the maximum amount possible; 51% of Pell Grant recipients are likely to graduate from their four-year degrees compared to 65% of students who have not received the grant.

According to College Board, Pell Grant expenditures rose from $15.2 billion (in 2016 dollars) in 2006-07 to $35.8 billion in 2011-12, but declined to $26.6 billion by 2016-17. Antoinette Flores at the Center for American Progress notes: “At public four-year institutions, students from the lowest income group need to borrow almost twice as much as students from the highest income group to fund their education. This disproportionately affects students of color, since blacks and Latinos are more likely to fall in lower income categories than whites.” Over 31 million students over the last 20 years have left their studies without a degree or certificate, according to a 2014 study by the National Student Clearinghouse Research Center.

The incoming classes of students at Universities are growing more and more diverse from populations who have historically been eligible for need-based scholarships. With the diminishing impact of the Pell Grant on the ability for students to be able to financially manage paying for tuition throughout the course of four-year degrees, Universities mindfully turn their attention to this changed landscape by focusing on keeping students enrolled.

At this crossroads, predictive data modeling becomes most integral. Retention strategies are handled well by the advancement and development of computational models and predictive analytics, which can precisely point to particular reasons for drop out as a result of the increased affordable compute power, increased access to various kinds of data (often termed big data), and facility of data mining programs. These tools can be leveraged to identify which students are in greatest need of specialized financial and personal support, and determine the best strategies to ensure college students are able to complete their chosen degree programs.