State of the Sector: What’s Next for Higher Ed

0:00:13.4 Speaker 1: Hello and welcome to Office Hours with EAB. Today’s episode was adapted from a recent webcast in which EAB presented our annual State of the Sector research and the news is not great. US higher education has crossed a structural tipping point driven by the combined threats of political volatility, financial strain, demographic headwinds, and rapid advances in AI. Our top researchers unpack the data and suggest a path, or rather multiple paths through, depending on your circumstances. So give these folks a listen and enjoy.

0:00:57.7 Sally Amoruso: Hello and welcome to our conversation today about our 2026 EAB State of the Sector. I am Sally Amoruso, I serve as Chief Partner Officer at EAB, and I am joined by two esteemed colleagues, Carla Hickman and Colin Koproske, who lead our research enterprise. Ever since EAB was founded, or at least our research enterprise was founded back in 2008, we have been looking at secular trends across the sector and elevating and interrogating those that we felt were most worthy of our partners’ attention. About six years ago we started to synthesize all of those into what we call the State of the Sector. And this year our State of the Sector focuses on four fronts of upheaval that we see our partner institutions having to navigate. The first is around external accountability, the second around financial sustainability, market relevance, and then finally institutional agility. And we are going to talk through what our research has found, and we’re also going to talk a little bit about what we see as winning strategies around each of those as well. So thank you for joining us. Carla, I’d love to have you lead off first around external accountability, because that isn’t really new, is it? I mean, higher ed has always had external accountability. What makes it new in the current context?

0:02:24.1 Carla Hickman: I appreciate the question. I will say, as we were thinking through all of the many trends and all of the many forces that we could examine, it was impossible to not acknowledge the policy landscape across 2025 and the ways in which that was shaping our partners’ behaviors and how they were thinking about strategy. But for us, we didn’t name this section policy. We named it External Accountability because that represented for us a longstanding conversation the sector has been grappling with. Two years ago we talked about the lack of public confidence in higher education and tough questions that people were fielding around what is the mission? Does this actually improve my life and my standing? If I never set foot on a college campus, can I still explain why universities are so critical to our country, to me? And so the external accountability is really the coming together of bipartisan leaders but also the general public really forcing higher education to examine. Do you have a good answer to some of the fundamental questions we’ve been asking about your purpose, your mission and the outcomes you deliver?

0:03:37.1 Sally Amoruso: So what I’m hearing in your commentary, and I think it’s important to highlight this, is that this is not just a Trump administration issue.

0:03:46.5 Carla Hickman: Absolutely not. It is true that the Trump administration, I think, picked up the steam of the conversation and there is no doubt we’re seeing a flurry of executive orders. I’m sure both of you can remember when we were literally counting dozens a week. And I understand why higher education leaders sort of fell back on their heels and said, this feels like a new moment. But actually if you look at those policies, we kind of anticipated that some of those questions were going to be asked not just because there was a blueprint with Project 2025, but actually because some of these questions around funding, the questions around what is the role of the federal government in supporting research, some questions around who is higher education built for and do we actually have a way to measure the outcome or the return that the taxpayer should expect from funding? Those are questions that have been around. This is not new. And Colin, I know you looked at a lot of data that showed again, it didn’t actually matter if you were in a red state or a blue state, if you were affiliated Democratic, Republican or independent, there’s sort of this growing consensus that there were some questions that we needed to answer.

0:05:02.4 Colin Koproske: We’ve talked a lot about sort of underlying sector vulnerabilities that have been around for quite some time. But there have been cultural, organizational, regulatory, insulating factors that meant we were able to push off some of these harder questions about accountability. What I’ve noticed is even if you look at some of the kind of up and coming contenders for the Democratic presidential ticket in 2028, many of them governors, many of them mayors or senators, congressmen and women, when they’re asked about higher ed, they’ll often talk about some of the challenges facing young men and accessing workforce or higher ed. They’ll talk about affordability concerns, they’ll talk about needing to strengthen the two year at community college and sort of career and technical education sector. You don’t hear a full throated defense of a sort of traditional four year liberal arts education or of things like the research enterprise necessarily. So that’s created a lot of discord, a lot of conflict among our partners around where they should tailor their message, how they should tailor their message and where we may have lost the plot. And we talked about over the last couple of years the echo chamber problem, a sector, a lot of our partners kind of having a conversation among themselves that simply isn’t getting to the…

0:06:17.8 Colin Koproske: Carla, you talked about the median American voter does not have a bachelor’s degree. So we’ve really struggled to get that message out there. And we’ve argued that around some of these core issues like workforce integration and employer partnerships, around civic pluralism, around the resonance and relevance of our value proposition to our regions and our nation, economically, those are still sort of purple-coated, bipartisan value propositions that we think more and more schools are going to need to talk about loudly to regain some public support.

0:06:51.2 Sally Amoruso: And so the hope that a new administration would allow the pendulum to swing completely back is probably a false hope. Is that fair?

0:07:01.5 Colin Koproske: And I think so. And you tee up kind of an interesting issue here from a messaging standpoint. We can either talk about how much happier and how much more money college graduates are making than the American who might not have a college degree or only has a high school degree. And that message has not played very well to the public who might not have had access to the college degree or might have taken on some loans, might have had a couple of years of college and then dropped out. Or we can talk about the importance of what happens at a university to the broader society, to the core kind of bread and butter economic issues that the average American has. And I think that value proposition is there. It’s a big part of what’s saved some of the research funding. Quite frankly, if you think about healthcare research on some of the afflictions and diseases and issues that a lot of folks are facing, we can make that argument about more investment in our university means a better community, a more vibrant state economy, a stronger nation. That’s there, and I think the presidents, the provosts, the heads of MarCom and communication, the trustees who can amplify that kind of message are going to do better by their institutions if they can focus there.

0:08:12.9 Sally Amoruso: So when we see institutions that are actually doing well and winning at the messaging to legislators and actually doing that work on campus, of course, to fulfill that messaging, what are the no-regrets areas that we believe that institutions should be leaning into here around public accountability? Colin, do you want to comment on that as well?

0:08:35.5 Colin Koproske: The ones that I’d highlight are first, just this. We talked about power jobs, which means leaning into higher ed as the fastest and most reliable route to the middle class for students, for working adults who might want a leg up, might want to reskill. The second we’ve talked about, and this is challenging, we acknowledge, is to lean into fostering civic pluralism. And the murder of Charlie Kirk on a campus not too long ago made this a much more difficult conversation. But we’re all searching for this message that we can put out to the public, that a college is the place where you can be psychologically and physically safe in having potentially dangerous intellectual conversations, or might be challenging intellectual conversations. But to make that really real in a way that folks from both sides of the aisle can trust. A third key pillar we’d be talking about is advancing regional and national resilience alongside some of the political, cultural, economic pillars that folks are concerned about. And then we’d also argue that people leading universities seek to lean into this moment around transparency and accountability. There is this kind of desire to maintain as autonomous as possible from the folks who might provide a declining subsidy, but a subsidy nonetheless from the state and federal congressional allocations.

0:09:57.0 Colin Koproske: But there are going to be more and more strings attached, we think, to more and more funding, whether it’s state or federal. So being able to paint a clear picture with data about the economic and other kinds of outcomes your students are getting, about the productivity and output of your faculty from a research standpoint, we think it’s important to lean into those things and start to ask those hard questions of ourselves now, so that when our boards and our states and other sort of potentially new accreditors in the future start asking those hard questions, we’re prepared to answer them.

0:10:32.0 Sally Amoruso: Thank you. So the public accountability is one facet, and it probably reflects some of the reasons why enrollments have been declining, why funding has been declining. And that has created a pretty tough situation from a business model standpoint for many of our partners. And, Carla, I’d love for you to just elaborate a little bit on what this sort of convergence of both revenue and cost pressures is creating.

0:11:04.6 Carla Hickman: I think we’ve all known in the sector for some time, or we’ve had conversations that the business model is fundamentally broken or the business model of higher education is flawed. And the good news here is on both the cost and revenue side, there are some well established playbooks for how you deal with that. What is unique about this current moment, and I think why many of our partners feel so stressed, is that we are seeing what we’re calling synchronized compression, which means every single expense, every single revenue item is under pressure simultaneously.

0:11:39.5 Sally Amoruso: Yes.

0:11:40.0 Carla Hickman: And our business model was designed to absorb a shock here or there. We could have a down enrollment year where we could have a year where we were a little bit worried about the cost pressures from the just rising cost of maintaining physical plant. But everything feels like it’s under strain all at once. And I’ll acknowledge the policy landscape has made that more challenging. So I don’t envy the CFOs who are trying to run the scenarios on what does it mean if we do wind up with fewer research dollars. The loan caps are very real, visa policies and the impact on international enrollment, that is very real. But it’s that synchronized compression that I think people are really feeling stressed by. And as both of you know, and I’m sure the listeners know, we had a little bit of good news on the enrollment front this year because it was the fall of 2025 and we had people announcing record classes and we celebrate that with them. But anybody who’s been paying attention to the demographic cliff knows 2025 was the top of the mountain. We were always supposed to see strong enrollment in ’25.

0:12:49.9 Carla Hickman: This year, 2026 really represents the beginning of that downward trajectory. So demographics and enrollment are only going to get a bit tougher and we’re starting to see how the markets are responding where some institutions are able to grow and strengthen while others are truly struggling.

0:13:10.4 Sally Amoruso: And Colin, it’s not just about demographics. I mean, we’re seeing other trends that are more market driven that are compounding the top line pressures.

0:13:20.3 Colin Koproske: We’ve been talking about the demographic cliff for quite some time, at least since Nathan Grawe’s famous book Demographics and the Demand for Higher Education. And we’ve known when it was going to start hitting, whatever your kind of geographic metaphor is. If you think there’s going to be a gradual erosion or a cliff, it’s going to start coming in terms of the availability of 18 year old high school graduates next year. But it’s happening at the same time as a couple other trends. One is declining college going rates. And so we’ve seen in some cases rising high school graduation rates over the last 5, 10, 15 years. We’ve seen maybe better GPAs, more folks seeming to graduate and plan to go on to college but not matriculating. And we’ve known from many of our partners who we work with in our enrollment services division, the application volume they’re seeing, even if it’s skyrocketing, it’s very difficult to convert to yield. We’re seeing folks go to their wait lists and even find in the fall they’ve got folks who’ve submitted expensive deposits and aren’t showing up. So kind of getting from the top of that funnel and what will be a shrinking funnel moving into the future to a matriculating 18 or 19 year old undergraduate is becoming more and more challenging.

0:14:36.4 Colin Koproske: We’re seeing a growing gender divide that’s been really tough to crack, that’s got a lot of causes. But increasingly folks are struggling to figure out how to get more and more of those male high school graduates into college. And then the other big challenge I would point out is just the sort of discounting wars and the challenge that more and more institutions might be maintaining a flat or growing incoming first year class, but have a declining net tuition revenue overall or per student. And so that means they’re spending more and more just to recruit and yield those students over time. We actually looked at some data and found that if you think of a universe of 100 high school graduates, for every 100 high school graduates, there is one out of that 100 that has an SAT score over 1200 and can afford private university without aid.

0:15:28.4 Sally Amoruso: So when your trustee is telling you go find more full pay students, that is the image that you need to paint for that trustee.

0:15:38.7 Colin Koproske: We’ve got thousands and thousands of schools that hope for an easy button. If we just get our story out there and buy some more billboards or some airport ads, we can find more and more of those high ability, high pay students that our faculty or staff might be interested in. But there are 2,000, 3,000 other colleges thinking the same thing at the same time. And then the more and more we see large, elite, national, well endowed institutions desire to grow, we’re going to see a food chain effect that affects the sort of middle of the market.

0:16:12.5 Sally Amoruso: Carla, this is a concept that you and I have talked about a bit, which is that there is still this considerable focus on a return to growth across the sector. Everyone thinks that if they can just fix X, Y and Z that they will grow. And we do see some institutions, let’s call them the winners, that are looking at prolonged growth over the next decade, perhaps even further. But for others, the reality may not include growth. Can you speak to that a little bit? And this idea of a post-growth world.

0:16:47.4 Carla Hickman: I think there is some wishful or maybe magical thinking that you will always be the outlier or the exception. Whether you’re going after those high ability students or you’re going after more international students or whatever that strategy may be. And I think the truth is if you see markets that you believe are underserved, those might be adults, individuals that have some credits, but no degree. The question you need to ask yourself is, One, is the product, the credential, the experience we deliver today, actually what they want and need? And so a lot of people are hinging their growth on going after what they see as underserved or untapped markets. They’re not asking any critical questions about whether what they deliver is what that audience actually wants. So I think for many people instead, if they want to have a defined value proposition, they want to deliver what they’ve always delivered. They’re going to have to be more comfortable with what is the level of enrollment that we can expect to sustain through the [0:17:50.1] [Inaudible]. And if you really need to grow, then perhaps we’re going to have to change something. And so we’ve been doing a lot of credential innovation workshops.

0:17:59.5 Carla Hickman: I mean, how many years have we talked about the fact that could we make a stackable credential happen? Could we think about a shorter time to degree, an accelerated bachelors? Those aren’t just thought exercises anymore. If you really want to grow and serve some of these student populations, those have to be practical exercises. And where we started, knowing all the pressures on cost, you’re really going to have to think about what are we going to pull back from or where are we going to find the resources that are required if we’re really going to invest in that level of credential design and marketing.

0:18:33.7 Colin Koproske: What your comments made me think of… Remember as a concept I think all three of us use a lot with our partners, which is outside in versus inside out strategy. Inside out being the kind of typical phenomenon we see in strategic plans or even in poor business execution, which we would not recommend. That means kind of our mission is to become a bigger, better version of ourselves. And we hope that you’re excited about that. You’ll come join us at EAB University. Outside in strategy is I’m going to entrepreneurially go look for markets, student needs, parental concerns, economic niches where I can maybe jump into that and meet that need faster or better or more locally than many of my competitors. And many of the kind of meteoric growth stories we’ve seen in higher education, I think of Southern New Hampshire University and Paul LeBlanc’s story, involve that kind of an entrepreneurial spirit. But you don’t need to be Paul LeBlanc to do that. Even if you’re a small regional public university in a Midwest state and you feel like you’re struggling, there might be local workforce needs around law enforcement or teaching or healthcare or manufacturing, where one program, if it’s delivered in the right place at the right time in the right format, can meet a need or respond to a need that can really help and drive tuition revenue, drive your reputation, increase your political stature in your state.

0:20:01.6 Colin Koproske: And that kind of strategic approach to growth, as opposed to my university just needs to figure out how to tell its broad story better in bigger markets, is likely to be a smarter strategy moving forward.

0:20:15.4 Sally Amoruso: And so when we think about that playbook, what are some of the missteps that we see continuing to be made as to how leadership teams are approaching cost savings? Because it does seem to be a little bit of Groundhog Day. The teams continue to make these mistakes and how they are trying very hard and with all best intentions to close those budget gaps.

0:20:42.5 Carla Hickman: Colin, I’ll start with one and then see what some of your favorites are. My first thing is a lot of these pushes have been optional. So think shared services. We have known for a long time that there are efficiencies to be gained and service quality improvements to be had through shared service. But at many institutions it is still opt in. So they ask the deans if they would like to participate. We’re starting to see that move where it can’t be optional. It has to instead be the way that we operate and the way that we think about the delivery of service. So that’s one, the cost management playbook can’t be a choice. It has to be a strategic decision.

0:21:25.5 Colin Koproske: I would offer two more. One would be the idea that you must either be in growth mode or in cutting mode. And I think that Richard Holdobler and others that we’ve talked about were very clear on needing to paint a picture of strategic reallocation as a norm, meaning our institution has a North Star or some strategic directions or some areas of strength that we’re going to bet in. But that does mean that there are areas of lower ROI that might be a little bit outside of our missional strengths or outside of what we think is economically viable for our institution where we think we can compete. And so it does mean that we’re going to have to downsize in some areas and invest in other areas. And that does mean that there are going to be some cuts that our president or provost or CFO has to oversee that have some opponents, that people are going to feel unhappy, potentially even unheard at the end of those conversations. But I think we’ve gone too long without starting some of those difficult conversations on many campuses. And it’s better to start having those conversations in a time where growth is still possible than waiting too long and having this wishful thinking we talked about and having to make a much harsher set of decisions from a point of financial exigency.

0:22:44.0 Colin Koproske: The second mistake we often find is across the board cuts, which relates to this point I made about reallocation. So often because it’s politically expedient, we might say, hey, we’ve got a $10 million or a $20 million deficit or a budget hole we need to fill. We’re going to go around to each division and office and ask you to find X number or X percentage of savings here. But that can mean in an area like recruitment or enrollment management or student advising or career advising, or in a particular academic department that’s prepared to grow, you’re cutting just as much from an area of strategic growth importance as you are from an area that really hasn’t had demand for 10 or 20 years or so. That might seem expedient as a way to get through the next six months, but it’s really going to starve the institution over the five to ten year time horizon. And that relates, I know, Sally, to a lot of the conversations you’ve had around getting the board and the president on the same page around that longer term financial picture, not just the kind of short term numbers.

0:23:46.8 Sally Amoruso: Well, it’s not just politically expedient, it feels fair. Everyone shares the pain. What is an alternative way to think about that though, Colin? How should teams be thinking about strategic cost cutting? In the same way that you’re encouraging them to think about strategic growth?

0:24:04.1 Colin Koproske: Well, I think they have to. We often call this portfolio logic of understanding that many activities within the university are loss leaders or need to be subsidized by other areas that bring in net revenue. And that’s okay. And that’s certainly part of the message a good CFO or a provost or president needs to send. The point is that those are intended and understood broadly and so that we’re intentional about where we’re going to need to focus and potentially subsidize, but also intentional about where we need to find sources of new revenue that can subsidize those areas that might be hard to cut or important to provide. So the basic point to start is just whether it’s your academic programs, your auxiliary revenues, your research profile, or athletics, which we haven’t talked about yet. A lot’s been going on in that space. You have to understand the inflows and outflows from an ROI perspective and at least paint a picture of what those numbers look like. Then you need to have an understanding of productivity. And often that is kind of a third rail in the academic affairs space. But if you’re looking at metrics like student credit hour production per faculty FTE in academic departments, that’s advanced stuff for most academic affairs leaders.

0:25:18.1 Colin Koproske: But it can’t afford to go unmonitored, I think, these days. And so at least understanding where those credit hours, where the tuition revenue is coming in can help you use that data to inform the decisions you might make, even if it doesn’t dictate the final decision.

0:25:33.0 Sally Amoruso: Which gets us to the third front, which is around market relevance and thinking with a market lens. Colin, tell us what we’re seeing on that front in terms of how the market is rationalizing.

0:25:45.3 Colin Koproske: That transitions to this more existential question which we always love to pontificate about in higher ed, which is is college worth it? And you can read a lot of articles almost every day, you can wake up and get a different take on this. And we all know from studying the sector for quite some time there’s one or two statistics that we tend to trot out to defend ourselves against these attacks about low or decreasing ROI. One is often just historically that you’ll make a million more dollars in salary and wages over your lifetime if you attain a college degree versus if you don’t. The other is that the college wage premium is near or at a record high even in the last year we measured. The challenge is that there’s an important caveat to those statistics, and that is it’s historical and on average. So those statistics are measuring everybody out in the workforce today, at least in the US, who has a bachelor’s degree is still earning wages against everybody else who has only a high school degree. The challenge is that more recently there has been some data coming from a number of sources, whether they’re Federal Reserve banks or research organizations like Burning Glass Institute that have raised some caution, I think, for those of us covering this story.

0:27:00.8 Colin Koproske: So one is that unemployment rates among recent college graduates now look remarkably similar to those with only a high school degree. And for young men, that gap has closed a little bit even more. The second is that college graduates make up a growing share of the long-term unemployed. So folks who are in the job market looking for a job, trying applying, but six months or more has passed and they’re still being tracked by those who are tracking this rate. And the third is that Burning Glass Institute found that 52% of graduates a year after graduating college are underemployed. So they’re in a job or a role that doesn’t require a bachelor’s degree. And most of the folks in that role don’t have a bachelor’s degree. And traditionally we’ve said, well, that’s the liberal arts, or that’s a kind of a… That’s a typical graduate who might take a slower approach to starting their career. Maybe they need a couple of internships, they need to experiment, kind of get their legs under them. But the Burning Glass Institute found that 10 years later, if you look at those 52%, three fourths of them were still underemployed.

0:28:08.3 Colin Koproske: So that does mean, I think for those who are in this kind of 22 to 32 cohort right now on LinkedIn, sending those resumes out, the job market looks different. And we’re seeing whether it’s caused directly by AI or indirectly maybe impacted by the way AI is affecting the workforce. And I know we’ll get into that. A field like computer science is now struggling when 10 years ago it would look like a sure bet for your son or daughter if they were asking what to major in if all they wanted was a guaranteed job. Now we’re seeing a higher unemployment rate for computer science majors than average baccalaureate graduates, and shrinking enrollments for many programs that have been booming over the last 10 years. So that’s putting colleges in this position of really struggling to make an argument to increasingly concerned parents and students who are paranoid about automation and the kind of manufacturing and other kinds of labor, high skilled trades, and then augmentation or AI disruption among the gig economy and knowledge economy jobs that have been there for the last 50 years for our college graduates.

0:29:14.1 Sally Amoruso: So is this AI taking entry level jobs? What are your thoughts?

0:29:20.1 Colin Koproske: I think we’re kind of caught in this. It’s either entirely AI or AI is a fad in a bubble that’s about to go away. And I think it’s helpful to analogize back to the Internet in the ’90s and early aughts. Which ended up causing a bubble in terms of the stock market. But certainly it’s impacted almost every job that we could imagine and is still critically important today. I think the threat is that there will be fewer new jobs created in the near term as CEOs and other employers seek to maximize sort of revenue per employee and start to think, gosh, what if I can automate or use artificial intelligence tools and increasingly agentic AI tools to do a lot of that entry level knowledge and service work, whether that’s analyzing large amounts of data or generating lots of basic content. They’re going to be looking to that middle management rank to manage teams of really AI employees potentially in the future, or they’re hoping that can happen in the near term and are making sort of personnel bets on that. And we’ve seen Amazon, for example, say that it’s going to need 500,000 fewer warehouse workers, but 14 or 15,000 fewer white collar workers at the same time.

0:30:38.8 Colin Koproske: So the more and more we see those economic signals, I think that is impacting some of this labor market noise we’re seeing. It’s not entirely driven by AI, but I think AI is coming in to a market that was already challenged by the mismatch in the supply of BA and BS grads in certain fields and the supply of jobs awaiting those graduates.

0:31:04.0 Sally Amoruso: Carla, so much of what our teams do in the program portfolio realm is to look at market research and look at industry trends. Lately it’s been to support some tough decisions sometimes around realigning or contracting a program portfolio. In the context of this and of market relevance and of work integrated learning, how would you encourage our partners to be thinking about their programs and approaching their programs?

0:31:33.6 Carla Hickman: I always tell people my best advice is that you need multiple inputs. But too few institutions are looking at the labor market and the stability of the labor market. And I don’t just mean open positions. I do think this is a conversation around how skills and competencies are changing in various fields. And I’m always hesitant to tell someone that a job posting is a great place to understand what a person actually needs to do on the job. But I do think we need to be thinking more less about the major and more about what does our curriculum provide and allow students to learn and demonstrate and articulate from a skills and competencies perspective. If you believe what Colin just said, fewer entry level positions, more of the rote work being automated, that changes the bar for what that entry level worker needs to be able to prove. It changes the skills that that employer is looking for. Is your curriculum therefore reinforcing teaching and supporting students in developing that type of skill set? And then the truth is, don’t be too quick to follow a fad. So that’s why I say multiple. If you’re only looking at the labor market, you’re probably doing it wrong.

0:32:53.3 Carla Hickman: So you also need to talk to students, their interests, what they think a major prepares them for, need to understand what other institutions are offering and what their enrollments and conferrals have looked like over time. And of course you need to think about your faculty and your region and what you’re good at. You get to triangulate all of that. But I think I would remind people that when you think about your program portfolio, it’s less about the major and it’s more about what does the curriculum actually teach and how much of that happens in the classroom versus outside of the classroom and how intentional have you been in shaping that kind of co-curricular experience for your student body.

0:33:35.0 Sally Amoruso: You literally wrote a seminal study on experiential learning. What does that look like in the current environment? And what are the more innovative thinkers and practitioners doing in that space?

0:33:49.7 Colin Koproske: We’ve been talking a lot about a book that was actually written in 2017 by the President of Northeastern called Robot Proof. And I think it was very prescient because it was all about the kinds of literacies, as the president called it, that the undergraduate needs to graduate with these days. That might cause us to sort of rethink the major and the role that the major plays. As Carla said, the way we’ve designed general education and the way we incorporate experiential or work based learning. And he talked about we spend so much time kind of arguing over the title of majors or should we have a degree in AI or our program approval processes. But we might need to be a little bit more radical into unbundling or rebundling or reimagining undergraduate education for a couple of reasons. He talked about data literacy, tech literacy and human literacy as being the three important kind of capabilities or sets of skills that every… At least for him, Northeastern graduate needed to have. And it plugs into this. You’re either going to work in the sector that is creating these robots or these kind of agentic AI driven tools.

0:34:59.9 Colin Koproske: You’re going to be really good at working with them or your humanistic kind of discernment, empathetic critical thinking skills are going to be so strong that you’re going to be indispensable to an organization, whether it’s for profit or nonprofit, that’s looking to adapt to these kinds of new technologies and work around them or contemplate their impact on the world, on the environment and on society. But I’ve been using the phrase a return to relationships. And the reason I like this is one of the kind of last bastions or best defenses, especially for a traditional, more liberal arts or residential based college, is this is the place where you’re going to meet the friends, the co workers, potentially your spouse, the folks that are going to be a part of your life for the rest of your career and for your life. And that’s going to be increasingly hard to do. As more and more education goes online, as more and more work goes remote, as more and more job listings get hundreds of AI assisted applications within a second that they’re posted, often the person who knows a person who knows that hiring manager is going to have even more of a leg up than they had in the past.

0:36:09.3 Colin Koproske: So if I were the president of a university, that’s a big part of the message I would be sending to the kind of paranoid undergraduate and their parents who want to know there’s a job awaiting that student at the end of the English degree, a computer science degree, mechanical engineering, whatever it is. Our faculty know people, you’re going to meet people, you’re going to develop those relationships so that someone is going to answer your phone call. And that speaks to another issue we’ve been talking a lot about, which is just, is Gen Z and are our students today prepared to make those phone calls? We’ve been reading and thinking a lot about the psychosocial readiness and the willingness and those kinds of soft social skills that we want our young employees to have and how much time Gen Z and Gen Alpha to come after is spending alone on devices potentially in the future with AI companions and friends and affiliates. So we’ve got to figure out how to remedy that and fight against it to some degree so that this traditional value proposition of both this kind of social relational impact we can have on students in their lives and the direct economic value proposition of landing them a job can come true.

0:37:20.7 Sally Amoruso: Carla, are we going to see skills and competency based education just surging everywhere as a result of this so that we can actually assess the acquisition of these skills that Colin’s talking about?

0:37:33.8 Carla Hickman: I have not yet seen proof that employers have the mechanisms and infrastructure in place for that to really be understood and interpreted in their hiring. What I do believe we’re going to have is a continued conversation around what are those skills and those competencies and importantly, what can you actually achieve in the undergraduate moment? What should you actually be learning and developing in the K-12 education system? And then what is going to have to be refreshed, reskilled, retuned, retrained over time so I actually think the skills and competency conversation I hope may become more conversation about lifelong learning and how we educate, retrain and continue education. Given how dynamic the economy is. I don’t think there is anything wrong with developing a skills print, having a transcript that specifies these were the skills and these are the experiences that help to articulate those. But we’re going to have to do that. Not like one university experimenting, one employer experimenting. I do think that’s going to require us as a sector to come together in the same way some professional associations have done that for their fields. So we all have to be singing from the same songbook on skills and competencies for them to work.

0:38:55.2 Carla Hickman: And I think that we’re also going to have to start thinking about this beyond just the undergraduate moment. We’re going to have to start thinking about how this touches an entire career or lifespan.

0:39:04.6 Sally Amoruso: And that connects back to the market relevance and the career outcomes. And I told the employers are coming along, this is not going to be something that really takes hold. I want to just telescope out one moment on market relevance and talk about how the market itself is rationalizing. Because one of the things that we haven’t really talked about is the fact that this is an ecosystem and there is a bit of a food chain. We talked about winners and how there is a run to scale in some of our previous states of the sector. And that has a knock on effect as some of those winners expand their footprint, create network campuses, perhaps even acquire other campuses in different cities, internationally and so forth. Carla, I’d love for you to just talk about how the market is rationalizing, what that looks like and how institutions need to understand their position in the market and what that means.

0:40:07.2 Carla Hickman: So let me be a little more specific about who is winning and who is experiencing enrollment growth, maybe to start. There were five categories of institutions that we identified in our research this year. The first one’s a bit different in kind. We hinted at them already. Those are what we call the online giants. So those are serving a very specific student population. They have seen double digit growth since the 2010 period and have been able to sustain that. They clearly saw a market need and have met it. But that isn’t easily replicated by most institutions in the sector as we’ve already established. If you look at the four other groups here, you see the Ivy Plus, so the Ivy League plus UChicago and some others. Those institutions are doing quite well. Some of them actually are looking to grow. So I think it’s interesting. We’ve always assumed that selectivity for them meant a small undergraduate class size. I think you should pause. We are starting to see signals that the Ivy League class is looking to expand their undergraduate student populations. That’s the knock on effect that you just mentioned. So imagine that they start taking a few more students, even if that’s at small numbers, that immediately impacts the next group, the next group down the national elite private.

0:41:28.4 Carla Hickman: So think Rice and Duke and Vanderbilt. They’re following some of the practices you just noted. So not only growing at what we might call their main campus, but looking at ways to extend their footprint through a multi campus network. Some of that is domestic, some of that’s global. So really starting to see those private elites grow. Large urban publics and big public flagships also doing well. And it’s very easy to see where when those institutions do well that immediately impacts the regional publics and the more access focused institutions in the state and on down the line. So put that against the backdrop of where we started. Fewer 18 year olds to start with some demographic contraction. Some states will feel that sooner than others. The larger institutions with double digit growth saying hey, maybe we can grow just a little bit more. Maybe we can expand into a region or a market we historically did not play. You’re going to find that the vast majority, everybody else so that’s the overall… But it’s like 2,100 other institutions, they’ve been running really hard just to stand still and some of them are already seeing a decline.

0:42:43.9 Carla Hickman: I think there is a likelihood that those institutions that are running so hard or declining, they’re either going to have to get comfortable with operating at a smaller headcount, a smaller institutional size, and be comfortable that they can do that well and still deliver a high quality educational experience, or they might be having to think about how they want to ally themselves with some of the winners at market so that they can be seen as a partner to those institutions instead of a competitor.

0:43:17.2 Colin Koproske: So about 2,300 total institutions we looked at, what we saw was that 175 of those 2,300 comprise almost half of the market in terms of total enrollment. So that’s 8% of the institutions. So 8% of the institutions in the US are north of 46% of the total market. And that’s up from roughly 37–38% 10 or 15 years ago. So that does mean you are seeing what you call this market rationalization. We’ve seen in many industries. Higher ed has been resistant to it. But the everybody else category is at about a 7% decline over the last 15 years. Those five segments we talked about are all at double digit total enrollment growth. So even if you just look at privates versus publics, what it’s hiding is often that it’s the institutions that are already large, already have national brands that are winning more and more share and buoying some of these overall enrollment figures we’re seeing. But if you’re a smaller regional public or a smaller regional private, on average, you’re having a tough time fighting for enrollment.

0:44:24.5 Sally Amoruso: Where I do see the more regionally focused institutions winning, it’s when they lean into that market relevance really hard and they find those student populations and they actually have a brand promise that is fulfilled in a very transparent way. So I think you’re absolutely right that we see these giants starting to get bigger and bigger and bigger and success begets success and there is cumulative advantage there. But there are also innovative regional players that are leaning into that outside in and making it work. So just wanted to throw that out there as well. So much of what we obsess about goes to the fourth front, which is what can our partners do and what makes it hard to just say, okay, I’m going to take an outside in approach and we are going to pivot our strategy and we’re going to manage the cost through strategic cost cutting and we’re going to be in a great place in three to five years. And that is around institutional agility, which is not… Agility is not a word that is often associated with higher ed because the institutional structures are such drags on change. And I’d love, Colin, for you to talk about the six attributes that your team identified as being reflective of what thriving institutions need to develop.

0:45:56.4 Sally Amoruso: Because I think it’s a good moment for leaders to do a checklist in their own mind about how their institutions either fulfill or perhaps need to work on these six attributes.

0:46:08.6 Colin Koproske: I’m happy to walk through six of these sort of organizational attributes and then I think we’d love to hear from you, Sally, given all your work with presidents and boards and cabinets, holistically, how you would grade the sector against these six? To what extent do you think the average institution that we work with is prepared to deal with some of these headwinds? But briefly, let me kind of overview the six attributes of organizational institutional agility we think are going to be critical over the next decade or so. The first is decision resolve. And that is what it sounds like. It’s the courage, the bravery to name that there is a decision to be made and following through on that decision. The second is unapologetic focus, which relates to that decision resolve. And that means that you’re willing to name a real priority, which might involve something that is no longer a priority, and being open to the trade offs or the discomfort that might cause among your alumni, maybe even among your cabinet and your own board. But being able to say, in order to become truly renowned at X, it means we might need to do a little bit less of Y and Z and to name that explicitly on your strategic plan or to roll that out in your stump speech.

0:47:24.7 Colin Koproske: And that provides you that North Star that might be accompanied by a harder message around disinvestment or reallocation. The third kind of muscle is portfolio logic, and that is viewing every activity at the university with a sort of business model lens and understanding how the cash flows, as it were, whether it’s your research portfolio, your athletics portfolio, your academic portfolio, or even in the admin finance sector, what you have in house, what you outsource, what you do through a kind of consortial partnership to understand how those numbers work. And often we keep finding institutions that are waking up and finding a hidden structural deficit that they simply haven’t been paying attention to and starting from scratch in some of these financial conversations. The fourth capability would be change ready systems. So Carla talked about how higher ed tends to be a very fixed cost business with our facilities, with our labor salary and benefits. If we think about how slow the process of changing those people, those facilities, those models tends to be. That’s one reason why Paul LeBlanc, for example, at Southern New Hampshire felt, well, I’ve got to kind of start my entrepreneurial venture outside of the core university.

0:48:43.2 Colin Koproske: For those who don’t have that lever available to them or who really do want to evolve or change the core academic operation, it does mean you’ve got to have more flexible staffing, more flexible kinds of business models on campus to be able to adapt quickly. The last two are what we called sort of endurance capabilities, and they relate to the cabinet and the president as executive in particular. The first there would be urgent long termism, which is a phrase we kind of coined. And it sounds ironic or like an oxymoron, but it’s really helpful in painting the picture of trying to get beyond just meeting next year’s first year class and trying to ask ourselves the tough question of if I’m president in five years from now or still president 10 years from now… And talk about how we see less of that these days… What are the tough conversations I need to have this fall or this summer that are going to feel like, hey, maybe we can put this off, maybe we can punt this down the road. We’ve got a lot of new folks. We want morale to be high. What changes might we need to start putting in place now as a favor either to the next administration or to do well to your future self who still wants to have a job and be in seat as president in 2035?

0:50:01.2 Colin Koproske: And that might be around your academic portfolio or some of these kinds of entrepreneurial bets around the program portfolio we’ve talked about before. The last capability is what we call executive resilience. And that is either we’ve got to keep executive teams in place longer in higher education, or even if a president, provost, CFO, board chair moves on to a different position, we’ve got to do some kind of succession planning that keeps initiatives and keeps major endeavors in place. Otherwise, faculty and staff, I think for good reason, feel like this is another new leadership team. We can wait out some of these kind of urgent fires that the president seems to be talking about, and that creates this kind of vicious, pernicious cycle of inertia that’s not going to adapt to many of the headwinds we talked about today. So those are issues we’re working on all the time with our cabinet partners. I’m curious, Sally, to hear from you. How would you grade the sector against those six capabilities? And how are you seeing people react when you put these six out in front of them?

0:51:09.5 Sally Amoruso: So I think that all of them are probably areas where there is significant improvement needed. But I think the one that really jumps out at me that I obsess over is the executive resilience. Because if you think about where we have had continuity, particularly on the private side, you have board members who have been there sometimes 30 or 40 years who remember what it was like to be a student on campus when they were a student. You have faculty who have been there 30 or 40 years. Where we have seen churn is in the executive ranks, and in particular the accelerating churn of presidents, which I think is really disserving the sector. And yet the first three fronts that we talked about are creating preconditions that make it very difficult for new presidents in particular to succeed. You also have boards that, while well meaning, really don’t reflect higher education and expertise in higher education, less than 10% of trustees have any experience on campus. And so we are asking of our presidents not just to be the mayors that they always have been in terms of being the statesperson and representing their campuses. But we’re asking them to be CEOs and that’s a fundamentally different role.

0:52:41.1 Sally Amoruso: And in corporations, CEOs have staying power. It’s one of the positions that has tremendous staying power. So to be a CEO in a role that could get you a vote of no confidence tomorrow if you are making the right decisions for the institution, there are just a lot of barriers that we have put up to being a successful CEO. And yet that is what is necessary. That’s what those operating capabilities represent to me. So I do think they’re very interrelated. But I think that executive resilience is the hardest one because anytime you have a new president coming into seat, they’re going to do the listening tour and there’s a little bit of a start and stop as cabinets press pause, waiting for the new leader as new. Sometimes new leadership is brought on with that president. And then you have faculty who are sort of skeptical about the staying power of presidents these days and that may create even greater resistance to change. Where we have seen individuals, presidents, provosts, who are really successful, it is around really embracing those operating capabilities and doing that with a level of fearlessness around what it means for their jobs.

0:54:03.3 Sally Amoruso: So I think about the leaders that Colin, you and Carla, you and I, we all work with and those that we talk to and then get together and say, wow, that was really a lesson in leadership. It is around being able to prioritize long term institutional thriving over your interests in keeping your own presidency going or as an individual at times. And that’s very, very difficult. But I think that is what is going to be needed to really help our institutions and the sector thrive. On that note, I’d love to shift a little bit to what the teams are doing. And Carla, where you are deploying the research teams to continue to support these efforts over the next year.

0:54:58.5 Carla Hickman: That we are always continuously researching and we were thinking about… We got good questions from partners as they’ve engaged with this work. So one of the study areas that we are prioritizing for the new year connects several of the areas we’ve discussed today and that are what are the systems for career success and what partnerships, cross sector partnerships actually look like. So how do we take good ideas around whether it’s skills that we need students to learn, experiential learning and work based placements and internships, thinking about continued education and when they’d return and actually look at that within regions where all of the actors, the K-12, the post secondary and the employer market are successfully working together. A lot of folks tell me that can’t be done. We’re not Finland, we’re not Germany, we don’t have those national models. And so I want to push people that we may not have a national model, but there are regional models that can work and I think create the kind of staying power and collective responsibility for outcomes that might be a winning strategy headed into the new year. So if you’re listening and excited about that topic, that is one where we’re really excited to go find real examples of what that looks like at scale.

0:56:19.3 Sally Amoruso: Roland, I know you have had an abiding interest in the psychology of Gen Z and that that has fed into our thinking about the upcoming Presidential Experience Lab. Can you talk a little bit about the connection between that Gen Z mentality, some of what we’re seeing in terms of loneliness and so forth, and where we’re headed with the Experience Lab?

0:56:44.1 Colin Koproske: Sure. We found a lot of statistics among our research team when we looked at the current generation. And it’s a big generation. Gen Z is anywhere from 12 to 28 years old. So we’ve got Gen Z managers in the workplace, got Gen Z’s in middle school. But one kind of experience that I think they share is having grown up with algorithm driven technology on devices that often are sitting right there on their nightstand. And we all experienced this, but didn’t necessarily grow up with it. And whether it’s TikTok or Snapchat or Instagram, Facebook, there’s been a lot of conversation in the zeitgeist led by Jonathan Haidt, Tristan Harris and others trying to sound the alarm on the psychological and social impacts, mostly negative impacts that this kind of device addiction has created. And this is subject to a lot of interesting and vibrant academic debate. But we’re really hoping to bring presidents together in this year’s Presidential Experience Lab around a conversation that’s sort of the promise and perils of this kind of social technology, which we should remind our listeners here is about to get changed dramatically by a topic we were just talking about, artificial intelligence.

0:58:01.0 Colin Koproske: The promise is, like it or not, we’re increasingly working and interacting with each other through this kind of technology. And it does have some upsides around remote work or keeping in touch with friends or family and communicating with them and finding pockets of folks with shared interests that you might never find face to face. And in terms of just the core business the university is in of finding potential students who are good matches for them and advertising their programs. These platforms are increasingly way more important than some of the traditional channels whether that be print advertising or TV, obviously radio. Even search engine optimization is now much more about these kinds of answer engine ChatGPT-like interfaces and how universities can make sure they’ve got a good presence on those websites. I think the time has come for this kind of conversation and we’re excited to help presidents sort of cut through the noise on social media.

0:58:59.4 Sally Amoruso: Really looking forward to that. I’m also looking forward to our partners inviting us to campus with our state of the sector. Many many partners find that board retreats, cabinet retreats, bringing campus along can be accelerated through the education that the state of the sector can bring and it can foster really important conversations on your campus. So I hope that you will consider inviting an EAB staff member out to share this research and to start to engender those kinds of constructive conversations. Thank you so much.