In this 7th annual end-of-year episode of the Changing Higher Ed® podcast, Dr. Drumm McNaughton becomes the guest of our podcast as we welcome this year's guest host, Tom Netting, of TEN Government Strategies, to review McNaughton's higher ed predictions for 2024 and explore his higher education 2025 predictions. The discussion reveals how higher education fared over the polarizing election year and what to expect in the coming year. 

Review of 2024 Higher Ed Predictions and Outcomes Political Environment and Higher Education: Grade A

The prediction about increased political involvement in higher education proved remarkably accurate in 2024, particularly given the election year dynamics. The sector experienced unprecedented political scrutiny, culminating in the October 7th congressional hearings that led to the departure of three university presidents. State-level political intervention was particularly evident in Florida, where more than a fifth of University of Florida professors failed post-tenure review under new requirements.

A Foundation for Individual Rights and Expression (FIRE) survey of 6,000 faculty members across 55 colleges revealed that one in seven faculty members reported being disciplined or threatened with discipline due to their teaching, research, academic discussions, or off-campus speech. The election year amplified these tensions, with higher education becoming a focal point in political debates.

2024 Enrollment Challenges and Demographics: Grade A

The prediction regarding enrollment challenges proved accurate, with institutions facing significant pressures:

• FAFSA rollout complications created unexpected enrollment barriers
• Regional institutions and private colleges were particularly affected
• Institutions under 1,000 students faced the greatest vulnerability
• Demographic realities showed concerning trends: from 3.4 million students in 2010 to 3.9 million by 2025, with a projected drop back to 3.4 million over the next 15 years.

Institutional Closures and Market Consolidation: Grade A

The closure rate accelerated dramatically, rising from 50 closures in 2022 to 80 in 2023. In 2024, 16 nonprofits closed, with Christian colleges representing half of these closures. The impact extended beyond campuses - Wells College's closure in Aurora affected the town's elementary school, water treatment plant, and community medical center. Academic realignment became crucial, exemplified by West Virginia University's cuts of 143 faculty positions and 28 programs and PASSHE's consolidation of six universities into two regional entities.

As predicted, smaller private institutions became prime targets for acquisition:

• Institutions under 1,000 enrollment faced greatest pressure
• Those without strong endowments particularly vulnerable
• Early movers in seeking partnerships fared better than those waiting until financial crisis
• Market showing clear signs of mature-to-declining industry characteristics

Technology and Artificial Intelligence Adoption: Grade A-

The sector showed a clear divide in AI adoption approaches:

• Miami Dade College and Kogod Business School fully integrated AI across curricula
• Other institutions maintained strict opposition to AI-generated content
• Faculty concerns about AI replacing jobs emerged at institutions like University of Wisconsin
• Progressive institutions recognized AI's potential in enrollment management, student outcomes measurement, and program assessment

Student Needs and Pandemic Recovery: A-

Post-pandemic adaptation revealed mixed results:

• Successful intense tutoring programs demonstrated three to four months of focused support could gain students a year in academic progress
• Faculty resistance to changing traditional teaching methods remained stronger than anticipated
• Growing sense of student and faculty disengagement emerged
• Increased burden on faculty as informal student counselors
• Shift toward more transactional educational relationships

Higher Education 2025 Predictions Legislative and Regulatory Environment

1. Higher Education Act Reform

• Partial reform through budget reconciliation rather than comprehensive overhaul
• Implementation of short-term Pell Grants with bipartisan support
• Department of Education reorganization likely but not dissolution
• Enhanced focus on workforce development while maintaining liberal arts values

1. Regulatory Changes

• Significant modifications to existing regulations under new administration
• Major changes to accreditation oversight through legislation
• Evolution of NACIQI's role and authority
• Enhanced institutional accountability measures
• Challenges to regulatory authority through cases like Loper Bright

Market Evolution and Institutional Viability

1. Enrollment and Demographics

• One-time enrollment increase in early 2025 due to FAFSA resolution
• Subsequent decline as demographic cliff impacts materialize
• Uncertainty in international student enrollment due to immigration policies
• Critical need for innovative recruitment strategies
• Expansion of direct admission programs

1. Institutional Sustainability

• Accelerated pace of closures and mergers
• Increased pressure on institutions under 1,000 enrollment
• Four strategic options: acquire, sell, consolidate, or close
• Enhanced focus on mission-critical programs
• Need for proactive partnership exploration while financially viable

Academic and Administrative Transformation

1. Campus Climate and Governance

• Continued pressure on DEI initiatives with more institutions modifying policies
• Persistent free speech challenges requiring balanced approaches
• Enhanced board engagement beyond traditional meeting schedules
• Evolution of shared governance models
• Balance between oversight and operational support

1. Technology Integration

• Required AI adoption across operations
• Integration of AI into teaching and administrative functions
• Need for systematic faculty development in technology
• Balance between innovation and academic integrity
• Enhanced focus on critical thinking in AI use

1. Financial Sustainability

• Limited progress on broad student debt forgiveness
• Focus on program cost-benefit analysis
• Innovation in financial aid delivery
• Growing emphasis on affordability initiatives
• Enhanced scrutiny of return on investment

Strategic Imperatives for Leadership Proactive Planning and Adaptation

Institutions must:

• Develop comprehensive contingency plans for enrollment fluctuations
• Create distinctive value propositions
• Implement effective academic realignment strategies
• Balance workforce needs with educational mission
• Consider strategic partnerships before financial pressure becomes acute

Governance and Leadership Evolution

Boards must:

• Increase engagement frequency
• Maintain appropriate oversight without micromanagement
• Consider institutional sustainability options proactively
• Support presidents in navigating complex challenges
• Ensure alignment between mission and market realities
• Focus on student success and community impact

Wrapping Up McNaughton's 2025 Higher Ed Predictions

The higher education landscape stands at a critical juncture where decisions made in 2025 will determine institutional trajectories for years to come. Success requires balancing traditional academic values with market realities while maintaining focus on student success and institutional sustainability. The sector must embrace transformation while preserving core educational missions, requiring unprecedented levels of strategic thinking and proactive leadership.

The demographic cliff, political challenges, technological change, and market evolution demand a new approach to higher education leadership. Institutions that survive and thrive will be those that can adapt to changing conditions while preserving their essential character and mission. The time for proactive strategic planning and decisive action is now, before external pressures force reactive responses.

Read the transcript on our website at https://changinghighered.com/higher-education-2025-predictions-2024-year-in-review/

#Highereducation #2025HigherEdPredictions #HigherEducationPodcast

About Our Podcast Guest Host

Tom Netting

Having spent all of his professional career devoted to higher education policy oversight and implementation, Tom Netting has an extensive knowledge of the laws and regulations governing all aspects of higher education. His considerable background and experience have afforded him the opportunity to view the development and implementation of federal higher education and workforce development policy in their entirety – including issues related to higher education and workforce development, health care, veteran affairs policies, and the procurement of federal appropriations.

About the Co-Host

Dr. Drumm McNaughton is the founder, CEO, and Principal Consultant at The Change Leader, Inc. A highly sought-after higher education consultant with 20+ years of experience, Dr. McNaughton works with leadership, management, and boards of both U.S. and international institutions. His expertise spans key areas, including accreditation, governance, strategic planning, presidential onboarding, mergers, acquisitions, and strategic alliances. Dr. McNaughton’s approach combines a holistic methodology with a deep understanding of the contemporary and evolving challenges facing higher education institutions worldwide to ensure his clients succeed in their mission.