America’s high school graduating class is projected to shrink 13%. Colleges are already feeling the squeeze

America has spent decades building a sprawling higher-education system around a steady supply of college-age students.

Now, there are about to be fewer of them to go around.

The U.S. graduated a record 3.9 million high school students in 2025.

But that peak marks a turning point: By 2041, the country is projected to produce about 3.4 million high school graduates a year, a 13% drop, according to the Western Interstate Commission for Higher Education .

Colleges are already competing harder for the students who are available and are having more trouble predicting which acceptees will ultimately enroll.

Students using the Common App applied to an average of 6.56 colleges this admissions cycle, up from 6.37 a year earlier.

That competition comes as rising costs put more pressure on college budgets.

For schools that depend heavily on tuition to pay the bills, an empty seat means lost revenue; for the most vulnerable institutions, enough empty seats can threaten their survival.

“Nearly every college in the country is facing some kind of financial pressure,” Robert Kelchen, a professor at the University of Tennessee, Knoxville, who studies higher education finance, told Fortune .

Some schools are disappearing or joining forces with other institutions.

The Federal Reserve Bank of Philadelphia estimated that 80 colleges could close between 2025 and 2029, adding to the more than 300 degree-granting institutions that have shut down since 2008.

Merger talks are becoming another part of the conversation: 31% of private nonprofit college presidents surveyed said their institutions had held serious discussions about a merger or acquisition , with financial stability the most commonly cited reason.

At the same time, the traditional four-year college path is facing more competition.

Enrollment at public two-year institutions focused on vocational programs grew nearly 20% between spring 2020 and spring 2025, according to the National Student Clearinghouse Research Center .