Innovating the higher ed machine of the future
Higher education is feeling economic pressure from all directions. But with a mix of strategy and ingenuity, many are finding ways to build anew.
Time to read: 7 minutes
Key takeaways
- Rising operational costs, funding cuts, declining enrollments and other pressures are forcing some institutions to rethink their approach to knowledge creation and transfer.
- Market-driven programs, lifelong learning models and strategic mergers are emerging as critical tools for institutional sustainability.
- But experts warn there’s no one-size-fits-all model. To succeed, leaders need to identify a way forward that fits their institution’s strengths and mission.
Facing mounting financial pressure, Jeffrey Docking, president of Adrian College in rural southeastern Michigan, cast the lure of a college-funded varsity bass fishing program. Applications soared. Enrollment improved, too.
Aside from bass fishing, Adrian College has launched 48 new majors, minors and certificate programs over the past four years—including artificial intelligence, computer science, sales and supply chain management—all based on student demand and industry need.
Adrian College’s fortunes reversed. “Our enrollment is either up a little or at the water line,” Docking says. “We attracted traditional students with a better ability to pay, and many came here because of our new academic programs.” And by
We attracted students with a better ability to pay, and many came because of our new academic programs.
Bass fishing may not fit the traditional image of higher education, but innovation may be the new paradigm to not only reverse harrowing trends but help recast the future of higher education.
At a recent TIAA Institute Fellows Symposium, “Framing the Future of Higher Education,” experts and academic leaders explored the many headwinds facing higher education—declining numbers of traditional-age college students, increased labor costs, state and federal funding cuts, empty seats and increased concerns over higher ed’s return on investment—and strategies to chart a way forward.
Institutions will need to get creative and infuse new energy into their machines by offering crowd-sourced curricula, accelerated degree programs and entirely reimagined institutions, just for starters. Forget the old college try: Change needs to be made with alacrity and at scale.
Next-gen student recruitment
To fill empty seats, institutions are taking a page from Marketing 101: Know your audience. That’s fueling a different approach to curriculum. Bowling Green State University, for example, now offers a degree in pop culture—with course requirements of pop music and pop television. Merrimack College in Massachusetts joined a small cohort in exploring three-year bachelor’s degrees. A growing number of institutions offer free medical school for students pursuing less lucrative but much needed specialties like internal and family medicine.
Universities and colleges are also expanding their target markets by wooing nontraditional students. For instance, Tennessee’s free community college project, TN Reconnect, looks to attract older adults who haven’t yet attended college. New programs include more professional coursework alongside flexible calendars that enable credentialed development—especially important for people whose jobs are changing or being eliminated by technology.
Other institutions want to cast a wider net as the number of 18-year-olds declines, but many need to adapt in order to serve a broader age spectrum, says James Appleby, executive director of the Gerontological Society of America. By adopting an “age-inclusive” model, institutions can attract older learners seeking new skills or career changes, but that’s not all. By blending all age groups into a class, Appleby says, schools facilitate knowledge transfer between generations that helps prepare everyone for a multigenerational workforce.
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The measure of a college degree: earning power
Another challenge for higher education is explaining the value of a four-year degree to students and their families. Their skepticism isn’t just about rising tuition costs. A growing number of schools—including smaller colleges like Amherst, Grinnell and Pomona—have replaced loans with grants for students seeking financial aid.
“Few people pay the ‘sticker price,’” says Richard Ekman, president emeritus of the Council of Independent Colleges.
Yet many families still face a significant financial burden with tuition bills. A frequent question is whether a four-year degree is worth the cost.
“Colleges need to do a better job of pointing out that tuition is an investment in the graduate’s long-term capability to earn more than a noncollege graduate—often as much as $1 million more over a lifetime,” Ekman says. A 2022 study from Pew Research Center shows that while non-degreed workers were making more money compared to 10 years prior, the earnings gap between four-year college graduates and those without degrees was still more than 40%.1 That gap has increased steadily since 1970, according to Pew.
Universities and colleges are expanding their target markets by wooing nontraditional students.
Many schools are trying to be more responsive to marketplace demands and employer needs and find ways to better connect education to salaries. The growth of technology—and now AI—as a portion of the economy has spurred more STEM-related graduates across college campuses. From 2023 to 2033, science, technology, engineering and math jobs are expected to grow at more than three times the rate of non-STEM jobs.2 Nine out of 10 of the top-paying college majors are STEM-related.3
“As AI increasingly outperforms humans in predictive analytics and information processing, we need to shift our focus toward what humans do well: sense-making, creativity, empathy, critical thinking, judgment, ‘reading’ the other and navigating culture,” says Paul LeBlanc, former president of Southern New Hampshire University and author of “Students First: Equity, Access, and Opportunity in Higher Education.” “The Age of AI is an invitation for non-STEM disciplines to reinvigorate and reinvent themselves for this age in which we find ourselves.”
Smarter together: university mergers
Schools at the greatest risk of failing are the hundreds of small liberal arts colleges competing against more-resilient large schools with massive endowments, according to Ricardo Azziz, a former president of Augusta University and founder and principal of SPH Consulting Group.
“Mergers are difficult, but preferable to closures,” Azziz says. “The problem is that leaders in higher education are generally loath to consider mergers until the absolute last minute. By then they have little to offer a merger partner.”
Nonetheless, mergers among higher education institutions are becoming more common. The number of higher ed merger and acquisition transactions increased threefold in recent years, to 31 transactions between 2016 and 2020, up from 11 in 2001 to 2005.4 Another 16 nonprofit colleges and universities had closed their doors.5
Perhaps nowhere is this trend more evident than in Vermont, where—while reeling from financial losses due to Covid-19—three struggling four-year public universities merged in 2023 into one new entity: Vermont State University. While not often the preferred path for many institutions, mergers can offer not just a lifeline but renewed viability. At the combined Vermont State University, fall 2024 enrollment rose 5% compared with the prior year. The enrollment of first-year students alone jumped 14% over the same period compared with a nationwide increase of just 3.3% for freshmen at four-year public universities.6
While not often the preferred path for many higher ed institutions, mergers can offer not just a lifeline but renewed viability.
“When the merger officially began, we were building the plane while we were flying it,” says Jamia Danzy, Vermont State University dean of students. “Now our students can take classes between campuses, interact with one another through programs and intramurals at another campus or even switch campuses relatively easily to find a better fit.
“Ultimately, we serve a student population that really needs an affordable, accessible higher education,” Danzy says. “And we want to provide them with an experience that serves them and their families well and prepares them to be successful citizens.”
Turn higher ed trends into opportunities
No single trend dictates an institution’s destiny. Strong leadership makes it possible to spot genuine growth opportunities, or warn of potential risks.
How to approach a change in thinking
- Start with good data. Trends will only be as good as the data sourced. Use what’s dependable: The National Student Clearinghouse Research Center offers data cuts that drill down to local levels, and can tell many stories around enrollment trends and what interests students. The American Academy of Arts and Sciences and the State Higher Education Executive Officers Association are good sources also.
- Then personalize it. Trends will differ by region, institution type and even the kind of student you wish to attract. Students interested in big Southeastern universities likely want different experiences from those looking at liberal arts schools in the Pacific Northwest. Focus on what’s a logical extension of your institution.
- Build on your strengths. Compare your institution’s internal strengths to the trends you find. Perhaps your college or university is already part of a nascent trend you can further develop. STEM schools are bringing back liberal arts classes to help students better prepare for the working world, and liberal arts schools are leaning into their science programs as students flock to high-paying majors.
- Plan your entrance strategy. Being an early mover on a trend can involve a lot of work creating and piloting programs. Bass fishing, while a growing interest elsewhere, may be an unlikely fit at your institution if you don’t have the right talent to teach. Instead, consider creating a complementary program in environmental studies or look for opportunities to fill another gap in the marketplace.
Source: TIAA Institute and Richard Ekman
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1 “Is College Worth It?” Pew Research Center, May 23, 2024.
2 Bureau of Labor Statistics, Table 1.11 Employment in STEM occupations, 2023 and projected 2033.
3 New York Federal Reserve, “Labor Market for Recent College Grads,” February 22, 2024.
4 “Strengthening higher education comes through partnership, alliances, and mergers,” McKinsey & Co., July 20, 2023.
5 “Looking Back on 2024 in Higher Ed,” Inside Higher Ed, December 17, 2024.
6 National Student Clearinghouse Research Center, January 23, 2025.
This material is for informational or educational purposes only and is not fiduciary investment advice, or a securities, investment strategy, or insurance product recommendation. This material does not consider an individual’s own objectives or circumstances which should be the basis of any investment decision.
TIAA Institute is a division of TIAA.