What is the demographic enrollment cliff? It refers to the significant drop in the college-age population that starts this fall in the 2026-27 academic year, and it represents a prolonged period of time — projecting at least fifteen years — when Hawai’i will be producing fewer high school graduates. In fact, Hawai’i is projected to produce 33% fewer high school graduates by the 2041-42 academic year. Signs of this are already being seen as Hawai’i’s Department of Education (DOE), where their enrollments have been dropping for eight consecutive years.
Why is demographic cliff happening? A number of factors contribute to the demographic cliff. Most attribute the demographic cliff to the declining birth rate. Other factors include out-migration and the lack of immigration and in-migration coming to Hawai’i. Hawaiʻi like the United States is a land of immigrants. As history has demonstrated in Hawai’i, first generation immigrants tend to have more children with ensuing generations having fewer children over time.
Why worry about the demographic cliff? This phenomenon has widespread social and economic implications for Hawai’i. By producing fewer high school and college graduates, Hawai’i will produce fewer future workers, affecting its efforts to advance economic development for the state. Having fewer young people in the workforce will adversely impact the tax base, providing less revenue (assuming tax rates remain the same) for the state to support a variety of services for its citizens. To see how impactful a demographic cliff can be to a state or country, just look at China. For many years, China had a national one child policy until 2016. In recent years, China ended this policy, because they realized that, among other problems, the size of their workforce would not be sufficient to support an aging population that was living longer. Unfortunately, due to a prolong period of time, having one child became engrained in China’s culture and they are not seeing much benefit from the ending of the one child policy. Having more children is expensive and after the prolonged one child policy was engrained into their culture, it has been very difficult reversing this trend. Similarly, other countries like Japan and America are experiencing the same phenomenon.
The same problem looms for Hawai’i. What can be done to mitigate the demographic cliff? There are a number of interventions that can minimize its adverse impact. First, to mitigate Hawaiʻiʻs brain drain, it must incentivize students to stay home for their college education. One option is to do what New Mexico did when faced with a similar situation. They created the Opportunity Scholarship program that provides free tuition and fees to any public university for all students who graduate from a Hawaiʻi high school. This turned around New Mexico’s brain drain. Why do this? View it as an investment in Hawaiʻi’s future. Barring this investment, the future is unlikely to improve.
Second, Hawai’i universities should consider offering in-state or deeply discounted rates to students in nearby states. Out-of-state tuition is a by-product of the 20th century and really needs to be examine for its utility, especially in a competitive market where states are trying to lure students from out of state. Some may ask, why do we have out of state tuition? The theory is in-state families pay taxes and as a result, they deserve to have lower tuition rates. The flaw in this theory is if the goal is to attract more students in a dwindling student pool, then reducing or eliminating out of state tuition may help attract students. It has also been shown that students tend to work and stay close to the university they graduate from (the caveat is does the location of the university provide a robust environment for employment opportunities?) For example, states like California have very diversified and robust opportunities for graduates to find their first jobs. This is not the case for Hawai’i at this point in time.
Third, states like Texas, they require as part of high school graduation that all students complete a Free Application for Federal Student Aid (FAFSA). Students can opt out with parental permission or if they are 18 or older. Many qualified Hawai’i students are leaving up to $7,500 on the table by not applying for federal aid. Hawai’i does not have to reinvent the wheel if we are open to learning from what other states and institutions are doing.
Besides educational interventions, Hawaiʻi needs to address its economic development by diversifying its economy. When have you heard that before? I know it has been said for fifty plus years and little has been done. The best way Hawaiʻi can do this is to elevate its current standing as the worst state to do business and strive towards improving its standing. One of the reasons it is so costly and unfriendly to do business in Hawaiʻi is the bureaucracy it has created for doing business. Ask any business and they will lament the onerous and timely process for securing building permits, etc. By becoming more business friendly, Hawaiʻi may attract and retain more businesses and provide opportunities for kamaʻaina to return to the Islands.
The demographic enrollment cliff is here. The question is, what will Hawai’i do to mitigate its adverse effects and ensure a softer landing? Doing nothing and maintaining the status quo is likely to have undesirable long-term impacts. Political leaders are infamous for being reactive and not proactive. Only time will tell if this is true for Hawaiʻi.
Alan Shoho is provost and senior vice president at Hawai’i Pacific University. He may be reached at ashoho@hpu.edu.
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