Using administrative data on more than six million German high school graduates from 1995 to 2018, this paper studies how labor market conditions around high school graduation affect postsecondary skill investments. Exploiting cyclical deviations from secular state-specific trends, I find procyclical overall university enrollment, especially at academic universities. Long-run attainment effects are procyclical for academic universities and countercyclical for applied universities. Using large-scale survey data, I present changes in expected returns to different degrees as a potential mechanism. During downturns, graduates expect lower returns to university degrees, while expected returns to the outside option, apprenticeships, are stable.