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Standing on shifting sands: Higher education enrollment challenges and strategies to persevere through them

June 18, 2025 · Authored by Daniel Greenstein

In this article, we explore how the current higher education landscape is impacting student enrollment across all types of colleges and universities throughout the country. While institutions face obstacles to attract, enroll and retain students, there are numerous short- and long-term solutions and strategies to consider to sustain your institution’s enrollment numbers and drive revenue. Keep reading to discover some effective approaches.

Predicting fall enrollments for U.S. universities and colleges is never easy – and it just got a lot harder.

Many parts of the country are just beginning to feel the impacts of a protracted decline in the size of the high school-leaving population – still a significant source of first-time enrollments. Thanks to Nathan Grawe’s Demographics and the Demand for Higher Education, the industry has had time to prepare for or at least digest the news of this massive demographic shift.

There has been substantially less time (none really) to grapple with the fundamental shift in how the U.S. federal government relates to universities and colleges. While sand continues to sift, they will stop moving so rapidly once the Big Beautiful Bill is signed into law later this summer, baking the administration’s higher education policy into the federal budget.

At that point, it is likely that we will see a combination of measures that will introduce significant uncertainty into student enrollments. For example, changes in the extent of and eligibility criteria for Pell Grant funding, and curtailment of federal student loan programs and on-ramps like TRIO and GEAR UP, could dampen demand from low-income students. So would tax increases on endowments – the source of so many scholarships.

Cuts in research funding and reductions in the overhead rates paid on research grants will impact funding for graduate students and likely weaken graduate student demand. So will visa restrictions on international students who contributed six percent (6%) of the total student population and more than a quarter of all graduate students in 2023.

That’s a lot, and to add even greater complexity – we won’t have any certainty until sometime in July (though politics are unpredictable) – as little as four to six weeks before students begin showing up on some campuses to start the fall 2025 semester.

How will institutions respond?

Even if only a few of these changes are implemented in the budget, we can expect a larger-than-average late-summer “melt,” to which some institutions will respond by making more attractive scholarship offers to applicants they have admitted but who have committed elsewhere or have not yet committed at all.

Action will take place in the undergraduate class and have cascading or ripple effects as schools with more status and/or scholarship dollars try to entice students away from those with less of either. And don’t be surprised if more than a few institutions sacrifice short-term net revenue to sustain enrollment, maintaining the appearance of stability – critical to seating next year’s class – while taking a short-term hit to their financial health.

The impacts will fall hardest on the financially weakest and the less selective schools that, combined, serve a disproportionate number of low- and middle-income students. Blows there will be doubly difficult to bear since these are the same colleges and universities that will be most affected by any changes to Pell Grants and federal loan funding. As a colleague explained, in the scramble to staunch hemorrhaging enrollments, pressures bearing down on selective research universities will quickly spread across the industry.

Strategies to approach future enrollment

Enrollment impacts for the 2026-27 and 2027-28 academic years are more difficult to predict and may be challenging to negotiate for the schools that begin seating their fall cohort more than a year before their start date.

I am seeing institutions mobilize to endure enrollment challenges and uncertainty in the following ways.

Build liquidity

These are in uncertain times, and in uncertain times, it is good to have money in the bank to steer an organization through unanticipated hardships and/or make a pivot. There are a variety of options, some taking longer than others to realize.

Borrow money: Despite high interest rates, elite universities, in particular, are taking on a record amount of new debt (over $11.5B in Q1 2025, up 40% over the same period last year)
Outsource transactional services: Focusing on those that don’t add significantly to brand distinctiveness and for which there is a mature and ready vendor market. I’m seeing interest in areas like financial and internal audit, research and grants administration and increasingly information technology (IT) assessments and transactional components of enrollment management
Monetize real estate and facilities: Contingent on your market, obviously, but if there are opportunities to sell, lease or even sell and lease back, consider this option
Re-think energy usage: Significant savings may be available for larger institutions. The fate of the Inflation Reduction Act (IRA) tax credits seems sealed, but for those with projects in the pipeline and able to make a quick start, there’s still a chance

Clarify, differentiate and promote your brand

Prospective students must understand who your institution serves, how it does so, at what price point, with what return on investment (ROI) and, crucially, how and why your institution differs from other options they might be considering. Common sense, right? It is – until you start browsing through university and college webpages, marketing materials and strategic plans and realize the extent of homogeneity that exists within specific sectors (community colleges, private liberal arts schools, research universities, etc.). Fight isomorphism! Dare to be distinctive, and ensure that your enrollment strategy, academic programs, student supports and even the performance of your back-office functions align with your brand.

Conclusion: There are ways to effectively address enrollment challenges

I’ve written extensively about longer-term options. I’ll continue to. I’ve tended to focus on streamlining business and administrative functions, increasing operational scale, rethinking the scope and management of the academic program array and emphasizing the importance of leadership and governance. There’s more to be said on those topics as the pace of innovation quickens across the industry, leading to new opportunities, but also to intense pressures. I’m even beginning to see significant shifts in institutional and system administrations. At least, they appear to be shifting from compliance-driven models that prioritize management efficiency, often at the expense of innovation, to accountability-driven models that grant business units a high degree of responsibility for determining strategic direction in exchange for a high degree of accountability. And I am convinced the topic list will grow in ways that we cannot fully anticipate as universities continue fundamentally to re-organize, re-focus and reform education, research, business and administrative functions – transforming everything, ironically, so they continue to fulfill their vitally important mission as engines of workforce development, social mobility and knowledge creation.

Please note: All views and opinions expressed are my own.

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