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CounterCurrent:
A Budget and Business Forecast
In the face of budget strain, business, politics, and opposition, higher education must adapt with market conditions

CounterCurrent is the National Association of Scholars’ weekly newsletter, bringing you the most significant issues in academia and our responses to them.
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Category: Academic Reform, Current Events, Higher Ed;
Reading Time: ~5 minutes
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Oftentimes, those concerned with the state of higher education get wrapped up—rightly so—in bringing awareness to the loss of rigor, excellence, and pursuit of merit in academia. However, there is another facet of higher education forgotten right under our noses.

A former business professor of mine, and vice president of the college I attended, never let his students forget a simple fact: colleges are businesses. Though a liberal arts education, emphasizing the pursuit of truth, goodness, and beauty, is paramount to becoming a virtuous citizen, we can not forget that any college or university must be run well to teach students and achieve its academic mission. Whether you agree wholeheartedly with this sentiment, there is an indisputable element of truth—good business practices make for more successful institutions in the long-run. I would add, an eye to economic trends is also imperative.

Higher education must change with market conditions. How can schools prepare for the enrollment cliff of the next few years to keep their doors open? What happens when wildfires shutter doors for a semester? What about mergers and acquisitions between institutions? How do small to midsize schools attract the right students in a saturated market while distinguishing themselves from other institutions?

The problem is long-running.

A Federal Reserve Board study ([link removed]) finds that nearly a third of all two-year private for-profit institutions closed between 1996 and 2023. Only seven percent of four-year private non-profit colleges closed during the same period—a small number in comparison but likely to rise. The FED highlights this fact in a single sentence: “Public institutions hardly ever close.”

The paper’s authors explain that public institutions are often seen by politicians and the public as essential to local economies. The closure of a four-year college or university is therefore a “deeply political decision” requiring drastic steps to keep open. Such steps typically include grants and emergency appropriations, but also “mergers and consolidations.” We are seeing many more of these solutions for struggling four-year public and private institutions.

California governor Gavin Newsom revealed last week a $322 billion budget plan for the state with a mixed bag ([link removed]) for higher education. Some higher ed administrators expressed dismay over the proposed 2025-26 fiscal budget slashes to ongoing state funding, including an almost eight percent reduction—i.e., $375 million—to the California State University system, and $271 million slashed from the University of California system. Though Inside Higher Ed ([link removed]) says that the proposed budget isn’t all bad news, especially for students. The budget will keep “a $3.2 billion investment in state financial aid, including $2.6 billion toward Cal Grant awards and $527 million toward the state’s Middle Class Scholarship.”

California is not alone in education budget considerations.

The Iowa House of Representatives has formed a committee to conduct a “comprehensive review” of the state’s education system. Including ([link removed]) “looking at how the institutions spend state dollars and what they’re doing for Iowa’s workforce needs.” Looking farther west, Utah’s House Speaker Mike Schultz has suggested a ten percent “reallocation” in appropriations within the roughly $30 million budget for the state’s sixteen public colleges and universities in an effort to bolster efficiency. An article in the Salt Lake Tribune explains ([link removed]) ,

Schultz has previously said he wants higher education to operate more effectively—graduating more students and with degrees that land them in higher-paying jobs. He also has expressed concern about growing administrative costs, while the price for a student to attend has ballooned.

The first step for Utah colleges and universities according to Schultz? Eliminating or consolidating low-performing programs with low graduation rates. But what about administrative bloat and resulting tuition hikes ([link removed]) ? Perhaps this is a better place to start.

Anyone who stays apprised of the news knows of the horrific wildfires raging throughout the Los Angeles metro area in California and the devastation they are leaving behind. As for the effect on education, several college and university campuses ([link removed]) have canceled classes or closed their doors due to air quality warnings, and hundreds of K-12 schools have closed ([link removed]) for the same reason or worse—being in the line of fire. Right now, no higher education institutions have sustained damage, but the same cannot be said for K-12 schools—several of which are partial or total losses.

Mergers and acquisitions are just as much business talk as they are higher education talk these days.

Gannon University and Ursuline College have signed ([link removed]) an official agreement to merge by December 15, 2026. After a period of eighteen-months, Ursuline will be renamed “Ursuline College Campus of Gannon University” but will ([link removed]) “maintain its own distinct academic programs, athletics and facilities.” Together, the higher education system will be the “the largest Catholic system of higher education along Lake Erie,” with a student body of around 6,000 students and 1,300 employees. This merger will offer expanded opportunities for students of the smaller Ursuline College, and extend Gannon’s academics through Ursuline’s liberal arts focus. This seems like a win-win for now.

It is no secret that private, non-profit colleges are facing closures at an accelerated rate. Between 2008-2023, nearly 300 colleges and universities closed their doors ([link removed]) . In 2024, nearly twenty private, non-profit colleges went out of business ([link removed]) . Given these numbers, will the new major trend be mergers? It remains to be seen, but it could be an option for like-institutions who wish to keep their doors open. Alternatively, the first step before turning to a merger could be introspection of a school’s own modus operandi—i.e., assessing for administrative bloat, activism-infused curricula, and politicization on campus to name a few—this might be the ticket to lasting reform ([link removed]) .

Interestingly, non-profit institutions aren’t the only ones considering mergers. Read up on what is going on in Vermont ([link removed]) , a look into how public universities are facing mergers or shut downs, and how political and other realities, like the enrollment cliff ([link removed]) , make adapting to problems difficult.

In spite of looming education trends ([link removed]) , we go forth into 2025 staying stalwart on our path of championing academic reform regardless of budget strains, business, politics, and opposition.

Until next week.

Kali Jerrard
Communications Associate
National Association of Scholars
Read the Article ([link removed])
For more on the academic reform, current events, and higher ed:
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January 13, 2025


** A Crisis Averted is Not a Crisis Solved: DEI Reforms Face Resistance ([link removed])
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Wenyuan Wu

Many opposed to the woke orthodoxy have long waited for a systemwide course-correcting.

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January 08, 2025


** Debate Over H-1B Visa Highlights Failures of U.S. Higher Education ([link removed])
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Rob Jenkins

Conservative social media blew up last month in a heated debate between Elon Musk and Vivek Ramaswamy on one side and die-hard MAGA loyalists on the other. The topic was the H-1B visa program, which Musk and Ramaswamy support but some on the right want to see eliminated.

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January 08, 2021


** Report: Freedom to Learn ([link removed])
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National Association of Scholars

Freedom to Learn provides a guideline of 40 detailed suggestions for legislative reforms. These initiatives, if enacted by Congress, would encourage reform of America's costly, politicized, and dysfunctional system of higher education.


** About the NAS
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The National Association of Scholars, founded in 1987, emboldens reasoned scholarship and propels civil debate. We’re the leading organization of scholars and citizens committed to higher education as the catalyst of American freedom.

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