For years now, more and more students are considering alternatives to four-year degrees. There is now a growing trend towards two-year programs or even shorter qualifications, also known as ‘non-university’ qualifications.
Rising college costs and associated student loan debt are also contributing factors. New borrowing limits in 2026 under President Donald Trump’s “Big and Beautiful Bill” are also a factor. Additionally, more students are seeking vocational training and career-driven pathways to gain a foothold in today’s softening labor market.
The term “Anchorage” first appeared about a decade ago to describe the rise of alternative college programs. Experts say that change will be noticeable this year.
According to a recent report from the National Student Clearinghouse Research Center, fall community college enrollment increased by 3% from the previous year, while public four-year university enrollment increased by 1.4%. Enrollment in private four-year nonprofit institutions decreased by 1.6% over the same period.
“Although overall enrollment is up slightly, what’s real is change across disciplines,” Matthew Holapple, senior director of research at the National Student Clearinghouse Research Center, said in a statement. “While community colleges and public universities are on the rise, private universities are in decline. This is a clear contrast to the broader growth of recent years.”
Golden West College students walk to GWC Student Union on Wednesday, September 3, 2025 in Huntington Beach.
Leonard Ortiz | Orange County Register | Media News Group | Getty Images
Derion Pollard, president and CEO of the American Association of Community Colleges, said the benefits of two-year degrees, vocational programs and other types of credentials are “amplified in an environment of economic uncertainty.”
It is true that the job market for new graduates is more unstable than it has been in recent years.
As the rise of artificial intelligence reshapes the workforce, there are fewer entry-level jobs available for those just starting out. Some experts say this is the beginning of an AI-driven white-collar recession.
New graduates face a tough job market
According to the National Association of Colleges and Employers, employers expect to hire only 1.6% more of 2026 graduates compared to 2025 graduates. NACE’s Job Outlook 2026 study found that this year, more employers are focusing on job candidates’ skills rather than degrees or grade point averages.
At the same time, other studies have shown that a shortage of skilled tradespeople is increasing job opportunities and wages in industries such as nursing care, manufacturing, and construction. Some in-demand trade jobs have average salaries well over $100,000 a year, according to job site Indeed.
The impact of the “big, beautiful bill” on higher education
President Trump’s “Big and Beautiful Act,” passed by Congress last July amid a tough job market, will bring even more fundamental changes to higher education.
This bill for the first time caps the amount students and their families can borrow from the federal government to pay for college and graduate school. The new federal student loan limits include a total lifetime borrowing limit of $257,500.
Tricia Scarlata, head of education savings at JPMorgan Asset Management, said that these restrictions are likely to encourage families to take more cost-effective paths, such as starting at a two-year college and then transferring to a four-year college, or choosing a public university over a private university.
“Now more than ever, considering return on investment is a must, not an option,” said Derek Brainard, director of finance at the education nonprofit AccessLex Institute.
The “Big Beautiful” law, which furthers the focus on “non-university,” also includes new provisions regarding short-term Pell grants. Starting in mid-2026, students enrolled in workforce training programs at community colleges may be eligible for Pell funding, a need-based aid program for low-income students.
“The creation of Workforce Pell Grants will increase interest in very short-term programs that are inexpensive and closely tied to employment,” said higher education expert Mark Kantrowitz. The grant is worth up to $7,395 in the 2025-26 academic year. Previously, these funds were only available to undergraduate students pursuing a degree.
“The smartest thing students can do today is to plan accurately. Consider scholarships, compare programs, and avoid thinking that federal loans will fill all the gaps,” Brainard said. “Students need to crunch the numbers early and understand program costs, federal restrictions, and long-term borrowing capabilities in advance.”
Subscribe to CNBC on YouTube.
