Higher education has an identity problem

Everyone in higher education knows the numbers. High school graduates peaked at 3.9 million in 2025 and will fall 13 percent to 3.4 million by 2041. The college-going rate has dropped from 70 percent to 62 percent. Over a hundred campuses have closed or merged since 2020, and the Federal Reserve Bank of Philadelphia estimates that in a worst-case scenario, 80 more could close per year.

These figures appear in every board presentation and provost retreat I attend. They are treated like a weather forecast—something external happening to us. But the enrollment cliff is not happening to higher education. It is revealing something about higher education that was already true: too many institutions cannot articulate what they are for.

The mismatch nobody wants to name

Here is a number that should alarm us more than any enrollment projection: 96 percent of employers say critical thinking is essential for new hires, but only 56 percent believe recent graduates demonstrate it. That is a 40-point gap between what we promise and what we deliver. Only 30 percent of 2025 graduates found jobs in their field. Nearly half said they felt unprepared for the positions they applied for.

We have spent decades insisting that the value of a degree is self-evident. The public is no longer buying it. Gallup found that confidence in higher education hit a floor of 36 percent in 2023 and 2024 before ticking up slightly to 42 percent in 2025—the first increase in a decade, and still well below the 57 percent recorded when they started measuring in 2015. When researchers asked what would restore confidence, the top answer was not more research output or better rankings. It was: teach practical skills.

Too many institutions cannot articulate what they are for. The enrollment cliff just made it visible.

Three institutions that answered the question

The universities that are growing through the cliff share one characteristic: they reorganized around a clear answer to what are you for?

Georgia State University decided it was for student completion—specifically, for closing the achievement gaps that conventional universities treated as inevitable. They built a predictive analytics system that reviews 800 risk factors for each of their 50,000 students every night and triggers advisor outreach within 48 hours when a student drifts off course. The results are extraordinary. Their six-year graduation rate rose 23 percentage points. Hispanic graduation rates climbed 36 points. African-American rates climbed 31 points. For seven consecutive years, underrepresented students have graduated at or above the rate of the student body. They eliminated the gap by changing the institution, not by selecting different students.

Arizona State University decided it was for access at scale without sacrificing quality. They grew from 61,000 online students in 2022 to over 80,000 projected for fall 2025, with total annual enrollment exceeding 194,000. ASU’s president, Michael Crow, has been blunt about the philosophy behind it: “It’s the institutions that need to grow and adapt and meet the needs of potential students, not vice versa.” He calls it an error to “sit back and say that we’re just going to weather the storm and then re-launch the vision.”

Western Governors University decided it was for working adults who need credentials that map to real competencies. Their fully competency-based model serves 192,000 students at roughly $8,300 a year. The median student age is 33. There are no semesters. You advance by demonstrating what you know, not by accumulating seat time. As one Deloitte higher education report put it: “We need to abandon time as a measure of outcome or success. Instead, we need to focus on the credit as a demonstrated competency.”

What the identity crisis actually looks like

Most institutions have not made this kind of choice. They offer a little bit of everything—residential experience, online options, continuing education, research ambitions, Division III athletics, study abroad—without being decisively good at any one thing. When enrollment pressure arrives, they respond with tuition discounts. Private nonprofit discount rates already exceed 50 percent, meaning institutions collect far less than half of their published sticker price. They are in a price war with no competitive differentiation to sustain it.

Meanwhile, 51 percent of institutions have begun integrating micro-credentials into their curricula, and 82 percent plan to within five years. Seventy-two percent of employers say they are more likely to hire candidates with industry micro-credentials. The World Economic Forum projects that 39 percent of workforce skills will be outdated by 2030. The market for credentials is fragmenting fast, and the four-year degree is no longer the only credible answer.

None of this means universities are doomed. It means that the ones who survive the next decade will be those who can articulate a specific, compelling value proposition—not “we provide a well-rounded education” but “we do this, for these people, better than anyone.”

“It’s up to the education institutions like ours to stop being innovation laggards and find ways to embrace these technological opportunities.”

— Michael Crow, President, Arizona State University

What I would tell a board today

If I were presenting to a university board this spring, I would not lead with enrollment projections. I would ask three questions:

First, what is our completion thesis? Georgia State proved that analytics-driven advising can raise graduation rates by 23 points and close racial achievement gaps entirely. Every 1 percent increase in retention generates $3.18 million in revenue. If a university cannot demonstrate that it is systematically improving completion, it is not just failing students—it is undermining its own financial model.

Second, who specifically are we for? Southern New Hampshire University went from 500 online students to 190,000 by committing fully to working adults over 25. Nearly 150,000 of their 190,000 students are over that age. They did not try to be everything. They built an institution around a specific population’s needs—flexibility, affordability, speed to credential—and executed relentlessly.

Third, what do we help people become? Not “educated” in the abstract. What capability, what career trajectory, what contribution? When 48 percent of graduates feel unprepared for entry-level positions, the answer cannot be “we teach them to think.” It has to be specific enough that an employer recognizes it and a prospective student believes it.

The fifteen-year window

The enrollment decline runs through 2041. That is not a blip. It is a fifteen-year structural shift in the market for postsecondary education. The institutions that treat this as a temporary enrollment management problem will manage their way into irrelevance. The ones that treat it as an invitation to answer the identity question—what are we for, and for whom?—will emerge stronger.

Higher education is not short on mission statements. It is short on institutions willing to make choices. The cliff does not punish the small. It punishes the undifferentiated.