CCs brace for enrollment booms - here's why

This week, community colleges across the country will open with sharply higher enrollment, according to news stories from WA, MN, VA, NH, and CA.

CC enrollments are known to be counter-cyclical, they increase when the economy hits a rough patch. CC enrollment increases for three common reasons, plus a fourth that's appears to be novel with this downturn.

1. Unemployment Recessions force people out of work. Unemployed people seek new skills to get back into the workforce. The unemployed are particularly tempted by...

2. Short-term programs CCs offer a range of short-term options that attract re-tooling workers. CC certificates are available in as little as one quarter. And often, students get what they need w/out completing certificates - a welding class or CAD intro.

3. Low cost Obviously, CCs are the least expensive retraining option in America. This should give CCs a boost over for-profit institutions, but doesn't always.

4. Withering 529s Last and novel, CCs are benefiting from the crashing stock market, which didn't spare college savings accounts known as 529 plans. Since their inception in 1998, 529 plans have been increasingly popular since their inception in 1998 because, like a Roth IRA, they are free of capital gains taxes.

But 529s have suffered along with all stocks in the current recession - down a third this year alone, with more to come. Suddenly, mom and dad's saving isn't going to be enough for junior to attend State U, much less Private College. Economic realities may well alter the thinking (and the economic reality) of the class of 2009.

The 529 bust is a novel event. Very few students were enrolled during the last downturn (the dot com bust of 2000-1). And the effects of the 529 bust probably haven't been felt yet. 529s were doing well back in May when students were picking colleges; the stock market was still up around 13,000 (the DOW has fallen by an incredible 33% since then). We all know what's happened since.

The 529 issue will strain CCs to the breaking point in Fall 2009. All the more reason that CCs need to be protected from state budget cuts.