Colleges and universities are in an uneasy position, forced to contend with some of the biggest challenges they’ve ever seen while simultaneously being asked by students, staff, and other stakeholders to increase output and innovate. While challenges vary between institutions, there are a few shared, overarching challenges facing most of them: less money, more complexity, higher expectations, and demonstrable ROI for learners. What’s driving these complications and how can institutions respond?
In this series, we’ll explore these trends and uncover how institutions may be able to turn them into opportunities. The first part of this series will look at the financial pressures impacting colleges and universities.
The Financial Conundrum
Issues regarding funding and finances face most institutions. There are compounding reasons for this: student demographic shifts, stagnating enrollments, questions about the value of a degree, federal funding cuts, financial aid restrictions, and more. With even more proposed cuts to the federal higher education budget in 2027, including institutional funding and student support programs, colleges and universities must adapt.
To survive in today’s economy, institutions need to prioritize recruitment and retention and find new ways to save.
The Student Component
It’s not Earth-shattering news to say that institutions need to recruit more learners to campus if they want to increase revenue and stay afloat. But doing this successfully in 2027 and beyond means being more proactive and personalized; institutions can no longer wait for students to come to them. Rather, colleges and universities need to analyze their matriculation data, identify their right-fit student persona, and chase those individuals on new channels.
In last year’s enrollment survey, we found that one-third of prospective college students used AI tools to obtain information about their preferred college. This means institutions need to make sure their proven outcomes, key differentiators, and unique characteristics that support recruitment are front and center on their website and social platforms crawled by LLMs.
Retention is the other side of the same coin as recruitment. Students are prioritizing the return on their education investments and evaluating whether getting a degree reduces the onramp into the working world. As such, institutions may need to shift their messaging to underscore the value of a degree.
A recent Lumina Foundation and GALLUP survey found that 67 percent of students said they chose to pursue a degree because they expect better job opportunities, but 39 percent said the cost of attendance was a major factor in their decision of where to attend. To overcome concerns about finances and paying for college, institutions can be more transparent about what it actually costs to attend, including tuition, books and supplies, food and housing, transportation, and more. Additionally, institutions should showcase experiences from recent graduates or advocates to highlight campus culture and learning outcomes.
The GALLUP survey also showed that employers still value workers who have a degree or certificate, as 74 percent of employers said they believe the importance of these credentials will either increase or stay the same in the next few years. Highlighting job market data and showcasing the conversion from degree attainment to employment for recent graduates may help institutions recruit and retain learners.
The Technology Part
Like many businesses, balancing the budget and minimizing overhead can be challenging. This becomes even more complex as college staff compare their positions to equivalent roles in the private sector, which often have more flexibility and better pay. To keep up with evolving salary expectations, potentially decreasing revenue from enrollment shifts, and the overall costs of maintaining a higher education institution, campus leaders may look toward technology modernization as a solution.
First things first, modernizing campus technologies costs money. But it’s important to take a long-term perspective, as moving to a cloud student information system (SIS), for example, can lead to capital expenditure eventually shifting into operating expenses. Those upfront purchases will convert to subscription fees. With a SaaS SIS, institutions can reduce their dependency on legacy hardware and cut back on physical maintenance without losing computing power.
A SaaS SIS can also enable more efficient campus operations. Rather than relying on outdated, paper-based processes, colleges can streamline workflows and automate previously manual tasks, allowing staff to be more productive and, importantly, have more time to spend supporting and connecting with students.
Wasted spending is another issue that institutions often battle, especially if staff have onboarded systems without the appropriate oversight. In many cases, colleges and universities have duplicate, unused, or underutilized software licenses. By bringing everything together into one cloud ecosystem, institutions can reduce unnecessary spending without compromising operational efficiency.
Other technologies like analytics that enable more effective use of data to improve experiences or centralized business office systems that make it easier for finance teams to forecast and manage spending can help institutions combat financial challenges. Additional solutions like communications and workflow tools that automate tasks and foster greater collaboration on campus can power growth or productivity opportunities.
The Road Ahead
The state of higher education today is at an inflection point: Institutions are pressured to manage increasingly high expectations and new complexities despite sometimes unpredictable finances in an unpredictable economy. The good news is that there are opportunities to excel. Enrollments appear to be on the rise, many employers are still looking for graduates with college degrees, and technology is booming.
As colleges and universities navigate these waters, it is important to do so strategically and methodically. By focusing on student enrollment, retention, and success, and investing in technologies that can support more fluid, collaborative, and intelligent operations, institutions can position themselves to adapt, compete, and thrive.
