College Boom Towns Go Bust: Enrollment Decline's Economic Impact

Aria Freeman

5 min read

Post on May 21, 2025

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The Shrinking Student Population: A Demographic Shift

The national trend of declining college enrollment is undeniable. Several factors contribute to this demographic shift, creating a perfect storm for college boom towns heavily reliant on student populations. These include:

• Declining birth rates: A smaller pool of potential college students is entering the higher education system.
• Increased cost of tuition and living expenses: The rising cost of attending college, coupled with increasing living expenses, makes higher education inaccessible for many. The burden of student loan debt also plays a significant role.
• Rise of online learning: The increasing popularity of online courses and degree programs offers students alternatives to traditional on-campus learning, reducing the need to relocate to college towns.
• Changing student demographics: Shifting demographics and preferences are impacting enrollment patterns, with some students choosing alternative educational pathways or opting for colleges closer to home.

Towns like Athens, Ohio (home to Ohio University) and Flagstaff, Arizona (home to Northern Arizona University) have experienced significant enrollment drops in recent years, illustrating the widespread nature of this problem. Data from the National Student Clearinghouse Research Center shows a consistent decline in undergraduate enrollment across many institutions, further emphasizing the severity of this issue. These declining enrollment numbers directly translate to a shrinking student population, impacting various aspects of these communities.

The Economic Ripple Effect: Businesses and Revenue Streams

Many college towns are economically reliant on student spending. The departure of students creates a significant economic ripple effect, impacting various sectors:

• Impact on local businesses: Restaurants, bars, bookstores, and other businesses that cater to students experience immediate revenue loss as their customer base shrinks. Many small, local businesses are particularly vulnerable.
• Reduced property tax revenue: Fewer students mean lower property values and reduced property tax revenue for local governments, impacting essential services and infrastructure.
• Decreased demand for housing: The reduced student population leads to an oversupply of rental properties, decreasing rental income and impacting property values. This also affects faculty and staff housing demand.
• Decline in service sector jobs: The decrease in overall economic activity leads to job losses in the service sector, affecting employment rates within the community.

For example, the decline in student enrollment in a particular college town could lead to the closure of multiple restaurants and shops that previously thrived on student patronage. Data from local chambers of commerce often reveals significant decreases in sales tax revenue, directly correlating with the declining student population. This decline significantly impacts local government budgets and its ability to fund crucial services.

The Real Estate Market: A Housing Crisis in the Making?

The decreased student population dramatically impacts the real estate market in college towns. The consequences include:

• Over-supply of rental properties: Vacancy rates increase, leading to lower rental income and decreasing property values.
• Decreasing property values: Reduced demand for both student and faculty housing results in a decline in property values, potentially impacting homeowners significantly.
• Potential for foreclosures: Landlords struggling with low occupancy rates may face financial difficulties, potentially leading to foreclosures.
• Difficulty attracting new residents: The overall economic downturn can make attracting new residents, beyond the student population, challenging.

Some towns are attempting to mitigate the impact through strategies such as converting student housing into affordable housing for families or attracting other types of residents through initiatives focused on remote work opportunities. However, the challenges remain significant, requiring long-term, comprehensive solutions.

Diversification Strategies: Building a Sustainable Future

College towns facing enrollment decline must actively pursue economic diversification strategies to ensure long-term sustainability. These strategies include:

• Attracting new industries and businesses: Diversifying the economy by attracting businesses from diverse sectors reduces reliance on the student population.
• Developing tourism infrastructure: Leveraging the town's unique characteristics and attractions to boost tourism can create new revenue streams.
• Investing in technological infrastructure: Improving internet access and technological capabilities can attract remote workers and tech companies.
• Supporting entrepreneurship and small businesses: Providing resources and support for local entrepreneurs can foster innovation and economic growth.
• Encouraging remote work opportunities: Marketing the town as an attractive location for remote workers can boost the population and the economy.

Successful examples of towns that have diversified their economies demonstrate the viability of these strategies. By attracting diverse industries and investing in infrastructure, these communities have successfully mitigated the negative effects of declining enrollment and fostered sustainable economic growth.

Conclusion

The significant economic impact of declining college enrollment on boom towns is undeniable. Decreased revenue, struggling local businesses, and a depressed real estate market are just some of the consequences. However, by proactively implementing economic diversification strategies and attracting new residents, these communities can mitigate the effects of this national trend. Understanding the impact of declining enrollment is crucial for the future of college boom towns. By implementing effective diversification strategies, these communities can mitigate the effects of this national trend and build a sustainable future. Learn more about how to address the challenges of declining enrollment and build resilient communities.