Pennsylvania recently followed Colorado, Maryland, and Utah in dropping college graduation requirements for many state jobs. This change will ease the task of filling positions in a competitive job market and may increase the diversity of the public sector workforce. But it could also steepen the enrollment decline now afflicting many state colleges and universities.

In his first executive order, Pennsylvania Governor Josh Shapiro opened up 65,000 state government positions to applicants without college degrees. In the order, Governor Shapiro stated “modernizing the Commonwealth’s hiring model to a model focused on skill, competency, and practical experience, rather than just educational background, will offer new opportunities for all Pennsylvanians to succeed professionally.”

Aside from state governments, many private employers are welcoming more non-degree holders. Among the companies leading the transition to “skills-based employment” are AT&T, Microsoft, and US Bank. The movement away from college degree requirements is being necessitated by labor shortages that developed in the late 2010s and have returned more recently as the economy quickly rebounded from the COVID-19 recession. It is also being pushed forward by non-profit advocacy groups such as Opportunity@Work, whose mission is “to rewire the US labor market so that all individuals Skilled Through Alternative Routes (STARs) can work, learn, and earn to their full potential.”

Last year, the Center for American Progress (CAP) published a study exploring the benefits of skills-based hiring for state and local government. CAP researchers argued that broadening opportunities for STARs would not only enable public sector employers to fill openings more quickly, but would also improve workforce diversity, noting that “a plurality of historically excluded workers—Black workers, Hispanic workers, rural workers, and veterans—are STARs.”

While removing college degree requirements is good for a diverse workforce, it may have adverse implications for higher educational institutions, which are already facing demographic headwinds. A dearth of students and the resulting lack of tuition revenue has already forced some private colleges to shut down, and public institutions are not immune from the shortage of students.

Nationwide, enrollment at public colleges has been declining over the past five years. According to data from National Student Clearinghouse Research Center, four-year public colleges enrolled 6% fewer undergraduates in fall 2022 than they did in fall 2017.

Enrollment trends vary widely across states. Arizona and Utah have seen significant increases, while Illinois, Minnesota and Ohio have experienced especially sharp declines. In Pennsylvania, state college enrollment has been falling for a decade and is now 22% below 2013 levels.

If prospective students realize that they no longer need a college degree to get a good job, they will be less likely to invest four years in higher education and take on student loans to finance it. Historically, young people have been advised to get a college degree to increase their lifetime earnings. For example, a Georgetown University analysis found that high school graduates had median lifetime earnings of $1.6 million while college students had a median of $2.8 million. But the authors went on to observe that 16% of high school students earned more than the college student median. Non-degreed professionals have traditionally been able to find high paying jobs as pipefitters, electricians, mechanics, welders, and plumbers.

With public and private employers dropping degree requirements, many more high school graduates will be able to match the lifetime income available to their college educated peers. The result is likely to be continued pressure on enrollment and tuition revenue.

Meanwhile, public higher education is becoming more expensive. According to the National Center for Education Statistics (NCES), constant dollar expenditures per full-time-equivalent student rose from $31,792 in 2009-10 to $40,989 in 2019–20, reflecting a 28.9% increase over ten years over and above the change in the Consumer Price Index.

To make ends meet, public colleges must seek additional state support, raise tuition, find alternative revenue sources and/​or make cuts. These last two options warrant more attention than they often receive. Many institutions have added administrators in recent decades and, with reduced enrollment, these non-teaching positions can be reduced without impacting the student experience.

State higher education systems can also save money by consolidating schools. Students at underutilized campuses could be transferred to another institution within the state system, freeing up their campuses for sale and conversion to other uses such as senior housing. Proceeds from the sale of no-longer-required facilities can be used to shore up the state system’s financial reserves.

With respect to new revenue sources, more public colleges may be able to replicate the successes the University of California and Arizona State University have had in attracting international students, who often pay full tuition.

College will remain a good choice for millions of young people in the decades ahead, but it is not for everyone. Public and private efforts to create more career pathways for STARS mean that a greater proportion of high school graduates will be able to join the workforce immediately rather than getting a higher education that may not interest them and will be no longer necessary for them to succeed. For state policymakers, the best response is to right-size their public colleges rather than fight the inevitable.