The Coming Higher Ed Shakeout

Over the next decade, American higher education will undergo a profound shakeout.

The system will become more stratified, with elite institutions continuing to offer a rich, immersive and interdisciplinary education, while many other colleges will face existential threats. This stratification risks entrenching inequality, reducing social mobility and transforming the university experience into even more of a transactional commodity.

Institutions without the resources, brand recognition or endowments of top-tier universities will struggle to sustain their current models, particularly as many lower-income students and their families demand a highly flexible education and faster, cheaper, workforce-aligned credentials over a rigorous, well-rounded, relationship-rich education.

Yet, amid these challenges, opportunities exist for institutions that are nimble, entrepreneurial and willing to innovate. The colleges that thrive will be those that rethink how they deliver education, redefine their value proposition and leverage their unique strengths.

Unlike more entrenched institutions that are constrained by tradition and slow to change, institutions that can leverage their location and unique identity have a chance to reinvent themselves—but only if they move decisively.

The coming decade is the moment when the future of American higher education will be decided. The stakes could not be higher.

Urban and Regional Public Universities: A Choice Between Generic Education or Bold Innovation

Many urban public and prestigious regional universities are at a crossroads. As higher education faces enrollment declines, financial pressures and shifting student expectations, these institutions can either offer a generic, commodified education or differentiate themselves through innovation, strategic foresight and bold leadership.

Institutions in thriving metro areas with growing industries have a unique opportunity to raise their profile and better serve their stakeholders, but only if they take proactive steps to adapt to a rapidly changing landscape. Success is not guaranteed and complacency is not an option.

Here are the key challenges and opportunities these institutions face:

• A changing student profile: Many incoming students will arrive unevenly prepared for the rigor that these universities aim to offer. Some will struggle with foundational skills, while others may resist traditional lecture-based courses and a well-rounded education that goes beyond job training. Meeting students where they are—without lowering academic standards—will require innovative teaching, engagement and support strategies.
• The demand for cheaper, faster credentials: More students (and their parents) are prioritizing shorter, job-focused degrees over a traditional four-year education. Institutions must balance academic rigor with flexibility, offering market-responsive programs while preserving the depth of learning that prepares graduates for long-term success.
• The cost squeeze: As tuition costs rise, these universities must maintain affordability without sacrificing quality. Competing with flagship public universities and private institutions means investing in top-tier faculty, cutting-edge research, a wide range of majors and state-of-the-art facilities—all while keeping costs manageable for students.
• The marginalization of the humanities and social sciences: There is a real risk that fields like history, philosophy, literature, foreign language study and even some social sciences will be treated as service departments, existing only to fulfill general education requirements. If these disciplines are allowed to decline, institutions risk producing technically proficient but intellectually shallow graduates—those who can build AI but not engage with its ethical implications or design systems without considering their broader societal impact.

To stand out and lead in the evolving higher education landscape, urban and regional public universities must:

• Blend STEM and professional excellence with interdisciplinary learning: Students should graduate not just with technical skills, but as adaptable, critical thinkers capable of ethical reasoning, innovation and leadership.
• Rethink general education and high-impact learning: Move beyond check-the-box gen ed courses and create cohesive, inquiry-driven programs that emphasize cultural and historical literacy, social science frameworks and the frontiers of science in ways that are engaging and relevant.
• Invest in strategic innovation: Expand hybrid and flexible learning models, enhance undergraduate research and experiential learning, and foster deeper industry partnerships that provide students with both job readiness and intellectual breadth.

Urban public and regional universities cannot afford to be passive observers in the coming higher ed shakeout. The institutions that thrive will be those that boldly redefine what higher education can be—offering not just credentials, but an education that prepares students for leadership, complexity and change.

The Coming Shakeout: Understanding the Forces Driving Higher Education’s Reckoning

Higher education in the United States is approaching a moment of profound upheaval. Over the next decade, a combination of demographic shifts, economic pressures, technological disruptions and shifting societal attitudes will force many colleges and universities to either adapt or risk closure. While elite institutions with significant endowments and strong brand recognition will continue to thrive, many broad-access institutions, small private colleges and regional public universities will struggle to survive in a landscape that is rapidly becoming more stratified, competitive and market-driven.

The coming higher ed shakeout is not merely a cyclical challenge, but a structural transformation that will redefine the role of the university in American society. The institutions that emerge stronger will be those that can innovate, differentiate and respond strategically to changing realities, while those that cling to unsustainable models will face significant financial and enrollment crises. Understanding the forces driving this shakeout is essential for both policymakers and higher education leaders who seek to navigate the coming decade.

1. The Demographic Cliff: Fewer Students, More Competition. One of the most pressing drivers of the higher ed shakeout is the declining pool of traditional college-age students. The number of high school graduates in the United States is likely to peak this year and then enter a period of sustained decline. By 2035, the high school–to–college pipeline will be about 10 percent smaller than it is today.

The factors contributing to the demographic decline, including a falling birth rate, leading to fewer high school graduates entering the higher education system. The Northeast and Midwest—regions historically home to a high concentration of colleges—will experience the steepest declines, while the South and West will see more modest reductions.

At the same time, college-going rates are declining, as rising tuition costs, skepticism about student debt and alternative career pathways (such as trade schools or direct workforce entry) push students away from traditional four-year degrees.

Implications of the demographic cliff include increased competition for students, leading to increased marketing expenditures and tuition discounting; more institutional closures and mergers; and a shift toward adult learners, online education and alternate markets by offering more certificates and certifications.

2. The Economic Squeeze: Rising Costs and Financial Uncertainty. The financial model that has sustained American higher education for decades is becoming unsustainable for many institutions. Colleges are facing a perfect storm of rising costs, declining state support and growing resistance to high tuition prices. At most institutions, tuition revenue is stagnant or declining, even as the cost of running a university continues to grow, driven by expenses such as faculty salaries, administrative overhead, facilities maintenance and technology infrastructure. Colleges must also invest in new digital learning tools and student services, further increasing financial pressure.

Meanwhile, the explosion of student loan debt—now over $1.7 trillion—has led many students and families to seek cheaper and faster alternatives, such as community college, vocational training or skipping college altogether.

In response to both economic and demographic pressures, many institutions are shifting away from broad-based liberal arts education and moving toward a more transactional, market-driven model of learning. While the most resourced universities will continue offering traditional, relationship-rich education, many regional campuses will function more like job-training centers.

The Higher Ed Shakeout Has Already Begun

The coming decade will not be kind to colleges that fail to adapt to the new realities of American higher education. The demographic cliff, financial squeeze and shift toward market-driven learning are already reshaping the landscape, with many institutions being forced to cut programs, lay off faculty or shut down entirely.

Who will thrive? Institutions that provide a clear return on investment. Entrepreneurial institutions that carve out a distinctive niche, especially in STEM and STEM-adjacent fields. Colleges that provide more than a credential—institutions that emphasize mentorship, experiential learning and real faculty engagement—will stand apart from transactional, credential-focused competitors.

Who will falter? Traditional liberal arts colleges without a clear value proposition. Broad-access regional universities that resist change. Schools that fail to integrate career readiness, rely too heavily on outdated lecture models or neglect student engagement in online programs will lose students to more flexible, responsive competitors. For-profit and online colleges that offer low-value degrees without mentorship or research opportunities will also face tough times.

The institutions likely to disappear include underfunded, low-enrollment colleges with no brand identity and colleges that offer a little bit of everything but excel at nothing.

The future belongs to institutions with a clear mission and a compelling educational model, not those that attempt to be all things to all people.

The shakeout will widen the gap between elite and nonelite institutions, raising serious questions about equity, access and the future role of higher education in American society. The choices that universities make today will determine whether they flourish, flounder or fade away in the years ahead.

Reimagining Higher Education: Centering Student Learning in an Era of Disruption

The coming higher education shakeout will force institutions to make a choice: continue operating under outdated models and struggle to survive or innovate to ensure a transformative, student-centered education. While elite institutions can rely on prestige and deep financial resources, most colleges and universities must adapt to new realities—shifting demographics, rising costs and increasing demands for workforce alignment—while still preserving the depth and rigor of a well-rounded education.

To thrive, institutions must rethink how they engage students, integrate disciplines, enhance learning experiences and sustain themselves financially. The future of higher education will belong to those that place student learning—not institutional tradition—at the center of their mission.

1. Reinvent general education as a transformative, student-centered experience. For too many students, general education feels like a box-checking exercise rather than a meaningful intellectual journey. Colleges must restructure these courses to emphasize relevance, engagement and interdisciplinary thinking. Here’s how:

• Define the literacies that all graduates should acquire: Reimagine gen ed in terms of cultural and historical literacies, ensuring that every undergraduate is exposed to global histories, philosophical traditions and artistic expressions, to key frameworks in psychology, economics, sociology and political science and to the frontiers of science, in biomedicine, climate science, cosmology and neuroscience.
• Big question courses: Replace siloed introductory courses with interdisciplinary courses that tackle fundamental issues—e.g., What does it mean to live a good life? How do societies change? These should integrate perspectives from the humanities, sciences and professional fields.
• Integrating humanities with STEM and pre-professional fields: Courses in AI ethics, medical humanities and the history of innovation ensure that students develop both technical expertise and ethical reasoning.
• Active, inquiry-based learning: Move away from passive lectures toward project-based learning, research opportunities and real-world problem-solving that prepare students for both careers and civic life.

2. Use technology and online learning to enhance, not replace, human engagement. Technology-enhanced and online education offer flexibility and cost savings, but they should enhance—not replace—the mentorship, collaboration and deep engagement that define a meaningful education.

• Leveraging technology to deepen learning: Technology, when used intentionally, can make learning more interactive, analytical and collaborative. Digital platforms like Perusall and Hypothesis allow students to collaboratively annotate texts. Data visualization software, GIS mapping and 3-D modeling help students see complex patterns, historical trends and scientific structures. AI-powered tools and computational methods enable students to analyze large data sets and examine literary patterns, while platforms like Miro, Google Workspace and coding collaboration tools support team-driven projects, simulations and interactive case studies.
• Connecting classrooms through online communication: Video conferencing and collaborative workspaces can link classes across campuses or even continents, fostering electronic pen pal relationships that enrich learning. Shared digital spaces allow students to co-author research, debate ideas and solve problems together in real time, while virtual exchanges provide authentic opportunities for language practice and cultural immersion without travel.
• Faculty-embedded, cohort-based digital learning: Online courses must include regular faculty interaction, such as virtual office hours, discussion-based seminars and faculty-led research projects. Structured, peer-driven experiences can prevent the isolation that leads to high dropout rates in self-paced courses.
• Making learning visible through collaborative online projects: When students create and share projects online—whether through digital archives, blogs, interactive maps, data visualizations or multimedia storytelling—learning becomes more visible, meaningful and impactful. By placing projects online, education moves beyond passive consumption—students become knowledge producers, problem-solvers and contributors to a larger intellectual ecosystem.

3. Integrating the humanities, STEM and professional fields for a deeper education. By fusing technical expertise with humanistic inquiry, institutions can produce graduates who are not just job-ready but prepared to think critically, act ethically and lead with insight. To move beyond disciplinary silos, the most forward-looking institutions will:

• Create interdisciplinary degree pathways: A well-rounded pre-health curriculum should go beyond biology and chemistry to include medical ethics, health informatics, the literature of pain and illness, and the sociology of health, ensuring future health-care professionals understand both the science and the human experience of medicine.
• Embed ethics, communication and history across majors: Regardless of field, students should engage with moral reasoning, cross-cultural communication and the history of their profession, helping them navigate ethical dilemmas, understand societal impact and communicate effectively.
• Emphasize professional identity formation: Successful professionals aren’t just technical experts—they are leaders, decision-makers and problem-solvers. Integrating the humanities into professional education cultivates ethical awareness, historical perspective, critical thinking and interpersonal skills, fostering a deeper sense of purpose and responsibility in their careers.

4. Expand access to high-impact learning experiences. One of the key dividing lines between elite universities and broad-access institutions is who gets access to transformative educational experiences such as undergraduate research, study abroad and faculty mentorship. These opportunities must not be limited to a privileged few.

• Undergraduate research for all: Colleges must develop faculty-led research initiatives that provide students—especially those at regional and public institutions—opportunities to engage in original inquiry and intellectual discovery.
• Internships with structured reflection: Career preparation should not be a transactional job placement exercise but an opportunity to integrate workplace experience with academic and ethical analysis.
• Global and civic learning for everyone: Study abroad, community-based projects and service learning must be made financially accessible so that students from all backgrounds can participate.

5. Reinventing the college business model: sustainability without compromise. The traditional financial model of higher education—relying on cross-subsidization from large service courses and professional degrees—is collapsing. To remain sustainable, colleges must diversify revenue streams, reach new student markets and forge external partnerships.

Successful institutions will expand beyond traditional undergraduates. They will aggressively recruit working professionals through flexible evening, weekend and online programs that focus on career advancement.

They will offer stackable credentials: Many students no longer want—or need—a four-year degree. Colleges should offer certifications in high-demand fields like cybersecurity, AI and data analytics, with the option to apply them toward a degree later.

They will also expand opportunities for high school students to earn college credit to create a pipeline of engaged, well-prepared learners.

In addition, these schools will identify and aggressively pursue new revenue streams and strategic partnerships. Too many universities underutilize government grants (NSF, NIH, Department of Education) and philanthropic funding that could support research, student programs and workforce training.

Colleges must also forge stronger ties with industry by creating customized degree pathways, corporate-sponsored apprenticeships and executive education programs.

While elite universities dominate endowment-driven giving, all institutions must expand alumni engagement, cultivate corporate sponsorships and launch targeted small-donor campaigns to create new financial foundations.

The higher education shakeout will widen the gap between institutions that evolve and those that stagnate. The colleges and universities that center student learning—rather than institutional inertia—will be the ones that emerge stronger.

This moment is not just about survival—it is about redefining the role of higher education in the 21st century. The institutions that embrace change, prioritize student learning and innovate boldly will not only withstand the shakeout—they will lead the future of higher education.

Higher Education’s Future Is Being Decided Now

The coming higher education shakeout will force institutions to make hard choices. Colleges that cling to outdated models, resist change or fail to articulate their unique value will struggle to survive. But for nimble, creative and forward-thinking institutions, this moment presents an opportunity to redefine what higher education can be.

The challenge is not just to survive but to thrive—to provide an education that is not only marketable but meaningful, not just transactional but transformative. Institutions that can blend workforce preparation with deep intellectual engagement, offer students real mentorship and community, and find ways to stand out in a competitive landscape will emerge stronger than ever.

The future of American higher education is being reshaped now. The institutions that act decisively will be the ones that remain standing when the shakeout is over.