The number of Americans in graduate degree programs dropped a bit last year for the first time since 2003, according to the Council of Graduate Schools (CGS). Majors that saw the largest reductions were public administration, business and education. However, the number of foreign students enrolling in American grad school programs continued to grow.

A tough economy usually sends more people back into masters and other graduate programs. But CGS speculates that the economic downturn has gone on for so long that people are becoming afraid to leave jobs to go back to school, fearing they may not get another job when they graduate. Continued rises in the cost of graduate school are also making it tougher for people to cover tuition costs.

The ongoing rise of international grad students points to America’s continuing role as a magnet for advanced students worldwide. Other facts to emerge from CGS’ new study of trends from 2009 to 2010:

• The number of Hispanic students in grad school grew 5%, but black student enrollments dropped by 8%.
• New international students in U.S. grad schools increased by 4.7%.
• Women earned 60% of all master’s degrees in the U.S. in 2009 – 2010.

Though the study did not present specific numbers on companies paying for employee’s grad school, CGS speculated the employers have tightened up on educational benefits due to difficult times. One CGS representative called the drop in American grad students a tremendous threat to U.S. prosperity.

Although it’s written more for educators than for students, a new report from The Center For American Progress (CAP) on the future of online learning makes for pretty interesting reading. It begins sternly with a warning that: “America is in crisis. Employers say paradoxically they cannot find the right people to fill jobs even though the country is facing its highest unemployment rates in a generation,” and then goes on to indict America’s colleges for failing to fill the nation’s employment needs. Most interestingly, perhaps, it suggests that allot of our gold-plated prestige colleges and universities in the U.S. don’t really deserve their lofty reputations. The report cites “a growing acknowledgement that many American universities’ prestige came not from being the best at educating, but from being the best at research and from being selective and accepting the best and brightest.” It echoes a oft-made criticism that private colleges, in particular, have an easy time producing successful grads because they don’t have to make any effort to serve more than the select, “cream of the crop” type students they admit.

The study goes on to call online learning a “disruptive innovation” that will continue to grow dramatically due to its ability to deliver higher education to people who have, until now, been “not able to be served or…not desirable to serve,” namely adult learners and poor or minority students.

CAP goes on to paint a fascinating, and fairly radical picture of how state universities and private colleges will both have to upend their current models of teaching and institutional management. Dealing with the rising demand for online learning will force America schools to do something they haven’t done in decades: focus mainly on teaching.

On a less convincing note, the CAP’s report goes on to propose a standards system for rating the success of schools that involves a mish-mash of “90-day hire rate plus change in salary over some amount of time divided by total revenue per conferral plus retrospective student satisfaction plus the cohort repayment rate indexed to credit scores.” That sounds a bit like taking the disastrous standards approach of “no child left behind” that has virtually wrecked America’s public secondary school system, in my humble opinion, and applying it to higher education in the U.S. You can read the report here.