Students are not showing up for college amid tight labor market, NAICU president says

National Association of Independent Colleges and Universities President Barbara Mistick joins Yahoo Finance Live to discuss the state of college enrollments amid ongoing macroeconomic headwinds, unemployment rates, investing in education, and the outlook for college enrollments.

Video Transcript

JULIE HYMAN: The labor market shift is leading employers to adjust requirements for hiring, with job postings demanding a four-year degree, dropping to 41% in November, still down from pre-pandemic 2019 levels of 46%. That's according to data from the Burning Glass Institute.

Joining us now to discuss the state of college enrollment, National Association of Independent Colleges and Universities President Barbara Mystic. Barbara, thank you so much for being here. So when we look at the requirements of employers-- and we just talked about that statistic where we've seen it fall a little bit-- what effect is all of this having on college enrollment? I mean, not just that, but obviously, all of the pandemic sort of dynamics.

BARBARA MISTICK: Yeah, you're absolutely right, Julie. You've got two different dynamics going on at the same time. So you've got a really low unemployment rate. You have employers that have lost employees during the pandemic period. And they're really looking to pull students who would normally come into college right into the workforce out of high school.

So that is having an impact. We see students sending deposits in, signing up for college, and then not coming in the fall. And actually, they're not going to another institution. They're just not going into the higher ed system. So this is going to have an impact long-term because college is really-- it's the rampway to careers, not just to the first job.

BRAD SMITH: It's also a ramp way to extreme amount of debt. So when you think about the number of people that are trying to figure out if this is a good return on investment, are there majors where you would say, yes, absolutely, great return on investment. This is going to pay off over time, land you a job, and allow you upward career trajectory and momentum and advancement. And are there others where you would say, you know what? Maybe a trade or maybe just getting some type of career exposure early on enough while you're in a college experience.

BARBARA MISTICK: Now, Brad, it's a great question. And actually, the data on bachelor's degree students, the average debt for a bachelor degree student is less than $30,000 a year. And that's actually gone down each year in the last five years. So if you look at this as an investment in your future, we know that students who go to college will make over a million dollars additionally over their careers. And they're going to pay back in terms of their tax dollars as well.

So any kind of federal programs, federal student aid programs that help students through college are actually a great-- it's a great investment for our nation because you're investing in the future, and then those students who complete school go on to earn greater amounts of money and pay taxes at those levels.

So I think part of the difficulty is understanding that the big debt numbers that are out there are often for undergraduate degree combined with graduate degree. So I think if you take this one step at a time and look at it as a laddered approach-- and also make sure you take advantage of whatever resources are out there.

So at the federal level, there's Pell grants for low income students. At the state level, there are state grants. Private institutions give out over $43 billion a year in institutional aid. So be a wise consumer, and I think you'll see this as an opportunity for your career, not just for that first job.

JULIE HYMAN: At the same time, Barbara, I mean, I think student debt aside, people think higher education is too expensive, right? And it doesn't seem to be slowing down the rates of increase that we are seeing in tuition, unless you can tell me differently. What do you think the trajectory is going to be? Do you see, writ large, the industry trying to keep a check on those costs?

BARBARA MISTICK: Oh, the industry is working really hard on cost. And the best way to look at that is the College Board data, which shows that adjusted for inflation, the price of college is actually down. I know that--

JULIE HYMAN: Over what period of time?

BARBARA MISTICK: That's over the last 20 years. So what you're looking at today, the average tuition is about $32,000 a year today. So that's down considerably from-- if you adjust for inflation, it would be up much higher. So I think what's happening is there's this sense that it's unaffordable. And if you think it's unaffordable, then you're going to opt out immediately.

And I think what you have to do is really take a look-- I think Brad made a great point-- at what kind of career are you looking at. If you want to be a data scientist, you can't just take one short-term job program and become a data scientist. You've got to spend the time to learn the skills over time, know how to be a good problem solver, look at what you can do in terms of not just good communication skills, how to be an expert in your particular area, transferable skills, being committed to lifelong learning.

These are the things that employers want. You were just talking today about the jobs numbers. Employers want those higher skills. The difficulty today is we've got this crunch happening with low unemployment rates and the desire to get people into the workplace right away.

BRAD SMITH: Do you believe that there's a better way that we can design the education kind of structure within college, just to make sure that people are not only getting the education that will go in tandem with the career that they want to do, but to have exposure to that career beyond just trying to apply for internships and being able to, then, perhaps land a job later on?

Because there are a lot of college students that may be coming out next year and look at the environment and say, there are hiring freezes at the company I want to work with. There are layoffs that are already being rolled out. And there's clearly going to be some concern around cost structure for the headcount that companies that are some of the household names. That they may actually decide to say, you know what? I need to go get a job as a barista before I can actually go work at the company that I want. Oh, yeah, and by the way, I'm saddled with debt.

BARBARA MISTICK: Well, you know, I think the best thing that you can do is to experiment with the career that you're interested in. So if you are really looking to be in a particular career, take any opportunity you can, both internships, you mentioned externships, mentoring, looking at somebody that will let you shadow them in a career if you've got family members, or use your extended network to take a look at a career and experience it ahead of time.

Experience is a great teacher. I mean, I'd say be greedy about those experiences. Know your career. Know what you're looking at before you step into the academic program.

BRAD SMITH: All right, National Association of Independent Colleges and Universities President, thank you so much for joining us here today. We appreciate it. That's Barbara Mistick. Have a great weekend. Thanks.