Higher Education 2025 Predictions and 2024 Year in Review:

Changing Higher Ed Podcast 240 with guest host Tom Netting and co-host Dr. Drumm McNaughton

Transcript: Changing Higher Ed Podcast 240

End of Year 2024 & 2025 Predictions with Dr. Drumm McNaughton & guest host Tom Netting

[00:00:30] Introduction and Welcome

David:  Welcome to Changing Higher Ed®, a podcast dedicated to helping higher education leaders improve their institutions. With your host, Dr. Drumm McNaughton, CEO of The Change Leader, a consultancy that helps higher ed leaders holistically transform their institutions. Learn more at changinghighered.com. And now, here’s your host, Drumm McNaughton.

Drumm McNaughton: Hello listeners. Welcome back to our annual end of the year review where we take a look at 2024. It’s been one heck of a year, and guess who I’ve got to be my co-host for this? My regular Washington Update guest, Tom Netting. Tom, welcome back to the show.

Tom Netting: How are you, Drumm?

Drumm McNaughton: I’m doing great. How about you?

Tom Netting: Still a busy time, still a frenetic pace as we literally head into the last three weeks of the year. Congress is still in session as we know, but lots going on.

Drumm McNaughton: Oh yeah, no kidding. I am so pleased that you were willing to join me. Deb Maue has done this with me for four years and with her job responsibility she just wasn’t able to. You’re not a substitute, you’re the A string who was just sitting on the bench for a few years waiting for his turn at bat. So thank you.

Tom Netting: Well, thank you. I’m kind of liking the notion of a role reversal here.

Drumm McNaughton: So with that, I am going to seed the gavel to you, my friend. Take it away.

Tom Netting: Well, thank you. And thank you for providing me this opportunity.

[00:01:54] Reflecting on 2024 Predictions

Tom Netting: So Drumm, here’s the thing. I went back and looked at your predictions with Deb for 2024, and I don’t know whether to call you Nostradamus, or Carnac, or any one of the other individuals that are phenomenal prognosticators because candidly you’re top 10, and your predictions pretty much hold true to form. So, kudos to you to start off with, sir.

Let’s talk about the ten. Again, at the top of your list was increase in politics as the aforementioned start of this presentation went, we can’t ever get away from that. But you talk about the fact that the political environment and the involvement of higher education was going to be particularly important in an election year, and certainly we saw some of that.

Drumm McNaughton: Well, it’s one of those things that’s intuitively obvious to the most casual observer. Whenever you enter a presidential election year, it’s all going to happen. And it happens even more given the extreme polarization that we have between the two political parties.

Tom Netting: And the interesting thing is, we’re going to talk about your predictions and the year in review. Certainly, I’m assuming that there will be a prediction on where we go with higher education into 2025.

Drumm McNaughton: Oh, I wouldn’t even dream of doing that, Tom.

Tom Netting: Oh, come on. Again, one that was, not too hard to predict, but you went a little bit deeper than most people would. You talked about the concerns with declining enrollment growth across the higher education community, and you specifically talked about the impact on regional institutions and some of the private institutions, as well as the flagship universities.

Again, you were on point. We have definitely seen some drops in the overall enrollments of institutions. So again, whatever it was that you were pulling from your Spidey senses work little care to comment on that.

[00:03:43] Enrollment Challenges and FAFSA Impact

Drumm McNaughton: Yeah, the, the enrollment drops, they really happened for a number of reasons, we’re going to get into those more, but the big challenge that, I think, caused a lot of the drop that wasn’t expected had to do with the FASFA rollout. We’ll talk about that more, but that was really, that was a sucker punch that nobody was expecting.

Tom Netting: And again, it’s interesting. You also talked about public perception of college value and the trust in overall education. I certainly think that the FAFSA rollout played a major role in some of that in terms of both the number of drops in overall FAFSA forms last year. For the first time a nine percent decrease. But again, you were in tune with these things well in advance. Acquisition target was another area where you forecasted that there would be issues around the acquisition mode of institutions and struggling institutions. We certainly have seen some of that. Again, where were you pulling the information from on that one?

Drumm McNaughton: I’ve got relationships with a lot of different universities, with their presidents, as well as people who work in the higher education area and everybody is seeing the same things. We’ve got more capacity than we have students. It’s just going to get worse once we get into the enrollment cliff, as it’s called, but these institutions, they’re running deficits. They don’t have good endowments; they don’t have strong endowments. And if you’ve got less than a thousand students, you’re at risk.

Tom Netting: And again, you talked about that both from the targeting of acquisitions, but again, the demographic cliff, I’m going to pull in a little bit more on that string of the tapestry here in a little bit when we talk about the year in review.

[00:05:28] Technology and AI in Higher Education

Tom Netting: You also were on point with regard to technology and AI. My goodness, you can’t go anywhere right now without discussions around what is AI doing that’s favorable and is it going to also take over our entire world?

Drumm McNaughton: It’s interesting because with AI, you’ve got your quote, “traditionalists” who anything that AI puts out there is plagiarized and then you’ve got other institutions, and Madeline Pumariega is a great example of this, the president of Miami Dade College, they fully embraced AI, they’ve got programs, et cetera, they’re exposing their students and they’ve been doing this for four years now. So you’ve got multiple different spectrums. AI is going to change everything that we do. Is it going to replace jobs? Absolutely. We’ll get to more of that.

Tom Netting: Absolutely. And again, building some of these things together just so we can have the movement to the year review and the predictions, because I’m looking forward to those.

[00:06:31] Adapting to Student Needs Post-Pandemic

Tom Netting: You also did note that adapting to student’s needs, I think AI plays into that to a large degree. You talked about the pandemic as well and the fact that we would continue to see ongoing challenges for student bodies because of the pandemic and the shift that caused.

Again, you were spot on with both of those in terms of both the lost periods of time for, and maybe even a lost cohort of students, with the challenge that came, came about as a result of that.

Drumm McNaughton: I’m going to be really hard on myself on this one. There was a push for professors to adapt teaching methods to meet students at their needs, but by and large, most of the faculty still have the attitude that, and it’s sad, but it’s true, there’s, I wouldn’t say most, but I’d say a lot of the faculty still have the attitude that students need to meet to where the faculty is rather than faculty step down to meet where the students are.

That doesn’t work in situations like this, especially with the COVID, the drop, but also to with first gen students, low SES students, you’ve got to be able to meet the student where they are and not vice versa.

Tom Netting: Well, interestingly enough, don’t be too hard on yourself. Don’t beat yourself much on that one. Because I truly do believe that. I think they’re getting there, culture shifts take time, Drumm. And sometimes it takes a little longer for the old dog to try and be taught new tricks.

Drumm McNaughton: Well said, Tom. I’m not going to say a word.

Tom Netting: We can hope that all of us old dogs, I’ll put myself in that category to continue to learn new tricks. I am one that believes, and you’ve shared this with me as well on your end, if you’re not learning, you’re not living. The ability to continue to always try and learn is always important.

Intense tutoring programs. You also thought specifically about the fact that you thought that shorter term programs, especially for tutoring or even in shorter term credentials, I’ll ad lib that part, were going to be something that we were going to see more of, and certainly in legislative policy, and even in discussions on the regulatory front, we are seeing a kind of a regeneration of a recognition of shorter term programs.

Drumm McNaughton: Yes. And you know that, along with adapting to student needs, mix very well. There have been studies and institutions who have done this have seen four months, three to four months of intense tutoring to get students back up to the stage, they will gain a year in academic progress. So there is a way to overcome the COVID deficits, et cetera, et cetera. You just have to step out and do these kinds of things. Problematic they cost money.

Tom Netting: Absolutely. But again, I hope that as we talk about predictions for 2025 and also the year in review, I think that again, I play to my strengths or my comfort level, I think you are seeing Congress and the regulatory environment, looking to try and meet those challenges head on, because we all know that like we talked about just moments ago, there are groups of students, whether it be at the K through 12 level, certainly, and those are the ones that I think everybody is most concerned about. But there was a lost group of higher education students in all of this as well, and their ability to matriculate and to enter into the work world, I think, is something else that we’re going to need to be mindful of going forward.

Drumm McNaughton: i think you’re absolutely right

Tom Netting: Okay, so now that we’ve gone through, and I would give you an A, I was going to give you an A+ but you were hard on yourself, so I’ll back it down to an A, but I’ll tell you what, to have those 10 predictions and to have the conversation you had with Deb literally a year ago, and see how close and spot on you were on so many issues. Do you have tonight’s lotto numbers?

Drumm McNaughton: I wish i did. Trust me i’d be announcing my retirement a couple of years early if i did.

Tom Netting: And that’s why I’m asking you to share it. Cause then we could both retire, Drumm.

Drumm McNaughton: Tom you’re too much needed in where you’re doing but thank you.

Tom Netting: And likewise, my friend, again, I don’t want to make this a, a Kumbaya party, again, you’re not allowed to retire anytime soon.

So, let’s talk a little bit deeper and delve into these issues a little bit more.

[00:10:40] Political Influence on Higher Education

Tom Netting: The one issue that I left off of your predictions was the impact of the potential election.

So, I’m going to start there because you again, that was a softball one Drumm. Come on, elections are always going to have an impact on where the policies go.

Drumm McNaughton: Well, of course. Why do you think I made that as my first prediction of the year?

Tom Netting: There you go.

Drumm McNaughton: But this one is a major, major change. You know we’ve seen Congress, we’ve seen the country and the country, frankly, your Congress reflects what’s going on in the country. It is incredibly divided. You’ve got the left with policies. You’ve got the right with policies. It’s a pendulum swing. It goes from Democrat, when, Bush was in office, if you take a look back 20 years or 25 years, you had Bush, jr, which I know that it’s W rather than, his father, but when W was in office the pendulum was over to the right a bit. It wasn’t huge. They really started getting on the accountability bandwagon with that. Obama came in and it swung to the left, probably more than did Bush to the right. For example, the dear colleague letter having to do with Title IX was a major, major change in policy.

Tom Netting: Again, so simpatico because that was what I was thinking of as you were making the presentation. Sorry to interrupt you, but

keep going.

Drumm McNaughton: No, worries. Then you had Trump one come in and they made a lot of changes to the right. For example, they did away with, I shouldn’t say did away, but they changed the Title IX to where it was “not preponderance of evidence”, it was a more stringent standard. It wasn’t beyond a shadow of a doubt, et cetera, et cetera, but they changed the evidentiary. They changed a lot of the processes about Title IX. They also did, and we’re going to get to this, they also went in with accreditation and instead of having regional accreditors, and national, everyone was institutional. So, there’s only two types of accreditors, you have institutional accreditors, and you have programmatic accreditors. That is a major, major change trying to level a playing field that has not worked quite so well. Trump two looks like that pendulum is going to swing back even harder to the right than it was in Trump one. They’re talking about disbanding the Department of Education. Diversity issues, the right is very much against any kind of D.E.I. So, what are they going to do with that?

There are just so many unknowns right now, and we’re in the period before the inauguration, all we can do is speculate based on his political appointments, his cabinet members, and some of the things that he has said on the campaign trail, and they have said. So, it’s going to be a major thing.

I think the one thing we will see, and this is a prediction, we will see some form of the higher education act overhauled. Will it be the full act? I don’t think so. I don’t think they’ll ever be able to redo that, but there are many things that they need to redo.

Your thoughts, does this make sense to you? Because you’re in the, you’re in the thick of this,

Tom Netting: This would have been a Carnac moment if they would have seen us on video. Yes, I think your very much so. The things that I’m looking at, Drumm, are we haven’t had a reauthorization of the Higher Education Act since 2008. We are, to say overdue, would be an understatement of significant magnitude to the nth degree, so to speak.

So yes, I do think that you’re going to see an opportunity for a reauthorization to take place. And look, , we’re going through potentially some of the, for the lead up or the run up to that right now. Dr. Fox had been working so diligently and vigilantly on the college cost reduction act. She and the Republicans pursued trying to put that into the CR that is literally falling apart as we speak. But that’s another conversation for another podcast, but what their goal was is to try and bring it forward this year in order to then bring it forward next year as part of the budget resolution and the budget reconciliation process. So I think that you are spotting yet again in your reading of the future, , so to speak, in terms of the desire to move forward with at least portions, as you said, as well, interestingly enough, accreditation, outcomes, and other issues that you talked about, and maybe that you’ll dig a little deeper when we get to predictions, are things that are going to be relevant and important as we go forward with those conversations. And quite honestly, the continuation of the focus on workforce education, as well as academics in the broader context of student enrichment.

Drumm McNaughton: I want to come back to what you just said about workforce development, education, things along those lines. I believe that’s very important that we have that. But I think to do that and to disparage a four year or even a three-year bachelor’s degree, and we’ll talk about that because there are shifts going on, we’re starting to focus, and I’m going to equate this to what I observe in some of the younger generations and even in my generation as well, this instant gratification type thing. The college education doesn’t prepare you for a particular career or your first job. It prepares you for a career in your life. That’s what it’s supposed to do. And if you take away that period, if you focus so much on that first job, you’re not giving the students the tools that they need to be able to be successful in life. AACNU, the American Association of Colleges and Universities comes out every year, couple of years, and they have a survey that they do. I believe it’s with gallop, but I may be wrong, that looks at what are the key skills that higher ed needs to teach and that employers want in the graduates. The number one: the ability to work in teams, critical thinking, being able to look at data and draw conclusions. These are not STEM skills, these are life skills and if we’re doing away and we’re focusing on, let’s just get them to their first job, are they going to have those skills that they need to progress in a career going forward? I think that’s a TBD.

Tom Netting: I do too. But again, you also need to consider Democrats and Republicans alike, Drumm, spending a lot of time on debt to earnings. Because there are so much federal dollars in the higher education process, depending on what numbers you look at the 1. 1 to 1. 5 or 6 trillion in student loans, there is going to continue to be, on both sides of the aisle, and part of the dynamic in these discussions going forward, I truly do think is going to be a much more in depth look across all sectors of higher education on what the return of investment is from the federal fiscal interest on higher education

Drumm McNaughton: And I don’t think that is wrong to do, but I just hope that when people start looking at these types of things, they look at it from the broader perspective versus just saying, well, this person graduated from college and then they had to go work at a lower paid job versus being able to move into a CEO role. And I’m being facetious at this point.

Tom Netting: To be sure. But again, and the challenge of that is always the devil of the details. How do you find that right balance? And candidly, the same way you and I are talking about it now, that’s been the charge of all the individuals on both sides of the aisle, and both types of administration, to do so. And again, that, that conversation will continue on for quite some time.

[00:18:59] Public Perception and Higher Education

Tom Netting: You talked about this, and you gave me a good segue into the notion of what the perception of the public and the higher education community are. Let’s talk a little bit about that from your perspective.

Drumm McNaughton: Yeah, that’s a challenging thing, because if you take a look at the polling that’s out there. 10 years ago, higher ed had a very high public perception. Strongly approve, approve, et cetera, and that seems to have reversed. Now, is that related to politics and the way that politics and the media are talking about things? Does this have to do with student debt, the cost of education? Frankly, I don’t think you can say it’s one or the other, I think it’s just a combination thereof.

Tom Netting: I think it’s all that. And then some

Drumm McNaughton: Absolutely. But the challenge is being a university president right now is far more difficult than it’s ever been because it is way more politicized. Take, for example, the October 7th and the anti Semitism hearings. You’ve got, three of the six presidents who appeared are gone. One of them was in the process of leaving and had already announced their retirement. It’s not easy, and these are some of, if not the top higher ed institutions in the country. We can’t have this. The presidency is hard enough as it is. We need to pull higher ed out of the political realm. Now, how that happens, I have no idea. Maybe we’ll make a prediction on that one and see if I can, wreck my, 4. 0

Tom Netting: Your 4. 0 average. Well, here’s an amazing thing, Drumm. Literally as we were speaking, there was just a report that was released by Speaker Johnson, as well as the house leadership and Dr. Fox, along with others, on a seven-month long investigation into antisemitism across the American college campuses. Obviously haven’t read it or know anything that’s in it. But to your point, again, damn you Carnac, that literally just happened as we were speaking and as you were talking about that very issue.

Take that into a couple of other things that are important to the American public with regard to higher education. Free speech, and issues around academic freedom. Again, I don’t want to mix these because I don’t see them as direct areas of contention, but both of them seem to be on the minds of the media, as well as others, when it comes to the positioning of those colleges in their enrichment of the lives of individuals and how they bestow that upon them or help them to achieve that themselves, right?

Drumm McNaughton: Oh, ab, absolutely. And it’s very sad that higher ed has become as politicized as it is. There are many folks on the right who feel like higher education is just a bastion of liberalism and all you’re doing is, and I use this term deliberately, all you’re doing is grooming young people to be flaming liberals, and it’s a shame because, yes, many of the faculty are very liberal. There are conservative as well, but you’re not there to become more liberal or less liberal or more conservative less. You’re there to be exposed to multiple perspectives so that you can make your own mind up as far as how you believe. What is important to you?

We’ve gotten past that. If you take a look at Florida. Florida is really. It’s ground zero for attempting to remake higher education. More than a fifth of the professors at the University of Florida went through the post tenure review and they failed. Why? It recently required the reviews. You have New College, which was a shining star as far as a progressive, when I say progressive, I don’t mean liberal. I mean, new ways of doing things, the governor there replaced the board. They’ve changed it. They want to make it like an ultra-conservative higher education institution.

And then at University of Florida, you had, Ben Sasse, who has his PhD. He’s been through the academic process. He just recently left after 18 months and what happened there, it was not a good situation, so there’s a lot of things. The “Stop Woke Act.” That was ruled to be unconstitutional, but it took, a very short time to do that. I want to say it was like five to eight months to get that ruling. But we’re seeing the same thing with DEI. We’re seeing the same thing with institutional statements. Instead of coming out and making a stance, you’ve got many institutions saying, we are not going to say anything about it one way or the other. It’s sad for me to see how much state legislatures are trying to legislate the restriction of academic freedom and free speech. I knew I’d get back to that at some point.

Tom Netting: Knowing you, I knew you would as well. And again, this is one of those areas that I think, again, not giving you the easy out on this one, but I don’t see this one going away anytime soon, Drumm, either. This is something that we’ll continue to see on both sides, the opinion’s continuing to manifest and be discussed, quite diligently, as we move on.

Again, talk about FIRE a little bit, the Odyssey groups and some of the things that they’ve done with regard to campus censorship. Because I know that that’s, again, part of things that I know you’ve been looking at and tracking.

Drumm McNaughton: FIRE is the Foundation for Individual Rights and Expression, and they do a lot of work in that. I’m not going to try and position whether they’re, left, right, center, whatever. But they recently did a survey and it was a very large survey, 6,000 faculty members, 55 different colleges. One in seven faculty members said they were disciplined or threatened with discipline because of their teaching, research, academic discussions, or off campus speech. That’s really disturbing.

 The constitution that I read said in article one said the government shall not legislate any laws restricting the free speech of its citizens or something to that effect. You know, religion, same type of thing. Freedom of the press, same type of thing. But we’re seeing more and more state legislatures legislating things like the Stop Woke Act, which, the court said, “no, this is against Article One”. Texas faculty, they’re starting, reported out, they’re starting to self-censor for fear of retaliation. That’s where we’re going, and that is very saddening to me. I’m sorry, I’m getting almost for a loss of words because it’s very saddening to me. The purpose of higher education is to expose people to different viewpoints and allow them to make their own decision as what their value system is.

Some folks believe that we shouldn’t expose them to them because it might get them to be this way. There’s groups out there talking about this with transgender. Come on, folks. People are smart. You don’t have to deny them the ability to speak or talk about certain things. Other people can make up their minds.

Tom Netting: Well, and I think one thing that’s important there, Drumm, again, in the interest of, of balance, and one of the facts directly from the FIRE report is, it was actually more conservatives than liberal faculty members that said that they occasionally hid their own political beliefs. So again, this does cut across all instructors and all types of desire to share information with students at institutions of higher education, to your point. But again, I think it’s important to note that, again, both sides have their concerns about that.

[00:27:27] Mergers, Acquisitions, and Industry Challenges

Tom Netting: Talking a little bit more about mature and declining industries and how, again, you talked about some of the concerns in your lead in for 2024 about mergers and acquisitions and institutions that candidly, before Covid, potentially might have been on the precipice of closure because of the hard times of enrollments and as well as other fiscal challenges. Let’s talk a little bit more about the industry itself

Drumm McNaughton: If you remember Clayton Christensen, he predicted multiple years ago that 25% of all higher education institutions, it was either 25 or 50. I don’t remember for sure, but they would be going out of business and his co author with this just recently came out and said, “we’re on track to even exceed those numbers that Clayton talked about”. Well, here’s the challenge. In 2010, we had 3. 4 million students. Fast forward 15 years later, we have 3. 9. The enrollment cliff Demographic cliff whatever you call it, over the next 15 years, we’re going to drop back down to 3. 4. We have built all this capacity,

Tom Netting: for a shrinking number of students.

Drumm McNaughton: for a shrinking number of students.

So that’s part of it. That is the classic definition in business of a mature to declining market, is more capacity than you have customers.

Tom Netting: And to that point, the competition and the challenge for that shrinking overall group of students is going to be even higher, correct?

Drumm McNaughton: Exactly. And that’s where you’re going to start seeing far more cuts of programs, closures, et cetera. Public perception goes into that as well because people are coming out and saying, we don’t need a college degree, we can just go out and get a good paying job. A good paying job right now for somebody out of high school is $40, 000. Fast forward 10, 15 years, if you’re still making $40-45,000, but you’ve got a wife, or a husband, and two kids. $40-45,000 isn’t a good paying job. You have to be able to move up and progress. So, the public perception isn’t where it needs to be.

The cuts and closures, the closure rate’s accelerating. In 2022, there were 50 closures. 2023, there were 80. This went up. In 2023, there were 14 nonprofits. This year, 2024, we’ve had 16, that number being made up of 50% of Christian colleges, so, eight of those closed. The common denominator, small liberal arts colleges, enrollments of a thousand or less. Their endowments very small. What most folks don’t think about, although there was a great article in the chronicle that came out about this, when Wells College up in, Aurora in the Finger Lakes district of New York, closed, it came as a surprise to the town because of the impacts. The town, depended on the college for its elementary school, water treatment plant, community medical center. This announcement left leaders scrambling. Not only does it affect the students and faculty, but it affects the towns that people are in, fewer jobs, et cetera.

So, these are all things that folks aren’t really thinking about. But it’s a major impact when a college closes.

Tom Netting: So again, to that, we also therefore can probably surmise fewer jobs. Issues with regards to the lost and potential impact to the communities if these schools are closing. Correct?

Drumm McNaughton: Yes, absolutely. So, what’s happening? There’s the quote “academic realignment” that’s going on. West Virginia, they cut 143 faculty positions, 28 programs, it’s still not doing well. PASSHE, the Pennsylvania State System for Higher Education, they did consolidations, they had six universities, three in the west, three in the east that consolidated down to one west, one east. That is going a little bit better, but I think a lot of that has to do with Dan Greenstein and his pushing so hard, is what he did.

Root causes. The cost of higher ed is more than it’s ever been, even in real dollars versus the inflationary dollars. They’ve tried to do debt forgiveness. That hasn’t gone through. Well, and there’s multiple reasons for that. I’d say the cost is the biggest reason why people are losing faith in higher ed. That and they’re not finding the job that they want.

Tom Netting: Well, and unfortunately again as I noted previously, they’ve lost a little bit of faith in the access point, meaning the FAFSA application, in order to try and help them make those very important decisions.

I am going to, I’m going to jerk on your chain a little bit and remind you that there is also a place, in a very laudable place, for all of our skilled trades and the individuals who seek out very strong and very, very substantially fiscally capable programs in a number of the occupations. I think it was former Secretary of Health and Education and Welfare, John Gardner, who said, ” society which scorns excellence in plumbing as a humble activity and tolerates shoddiness in philosophy because it’s an exalted activity will have neither good plumbing nor good philosophy. Neither its pipes nor its theories will hold water”. So, again, that was a quote I’ve been waiting to bring out to you at some point in time, and that seemed an apropos place to do it.

Drumm McNaughton: Classic, just so classic.

[00:33:27] Challenges in Academic Realignment

Drumm McNaughton: There’s a lot of things that need to be done and can be done, obviously cost cutting. But remember, you’re never going to cut your way to growth. Academic realignment, the problem with academic realignment and shared governance frequently gets in the ways of this restructuring. Connecticut found that out in a major, major way of trying to realign academic programs. It needs to be done, but you’ve got to somehow get faculty on board.

The other mergers, acquisitions, and acquisitions, we’re seeing far more activity and, our firm has done quite a bit with that as well. And unfortunately, there’s closures as well, and we’re seeing that.

[00:34:06] The Demographic Cliff and Enrollment Woes

Tom Netting: Now, you talked a lot about the demographic cliff, and let’s be honest, enrollments, again, the students, are the engine that drive our universities and institutional systems. That is, again, the access to post-secondary education, is the number of individuals, we already talked about the fact that that is in decline. Care to talk a little bit more about that cliff? Because again, there’s never enough to talk about that right now, Drumm, because it is so real and will be so prevalent moving forward. And

Drumm McNaughton: And we touched on this a little bit earlier, in 10 years we’re going to have 500, 000 less people as freshmen than we currently have right now and that’s going to make the enrollment woes go up. Let’s face it, the peak number of 18-year high school graduates will peak this next year at about 3.9 million, followed by a 15-year decline. This is going to be very challenging. Again, I go back to the mature to declining industry, more capacity than you have quote customers. The challenge is going to be competition. Higher ed doesn’t like to think itself as being in competition with anybody. But guess what you are.

The institutions that are being affected the most are those rural serving institutions, the smaller ones, your Christian colleges, we talked about that a little bit ago. The demographic cliff is going to have significant impact on many institutions. When you stop and think about it, and this is just something that kind of came to me. If you think about an institution that has 10,000 students, which is not a bad number, if you’re dropping 500,000 students, that’s 50 institutions that are going to be impacted, or if it’s a thousand, that’s 500 institutions that are going to be impacted. These are huge numbers.

[00:36:12] Mergers, Acquisitions, and Institutional Closures

Tom Netting: To your point and to the prior conversation, they’re either going to go away or the other part is they might be consumed or transitioned into being a part of another institution, so consolidation may be the lifeline, such that it is, to some of these institutions as well.

Drumm McNaughton: That’s a great point, Tom, because what I typically have seen is higher ed institutions wait too long to consider being acquired by another institution. Let’s face it. If you go into the marketplace and you say, “Hey, I can buy a particular company that is profitable, declining trends, but it’s going to help with my offerings in the marketplace. i.e. there’s a new product or a better product, or in the case of higher ed, a new curriculum, a curriculum we don’t have, a better one, better faculty, better research, you’re willing to go ahead and make that leap of faith. And there are institutions out there who are looking for good targets. But if you’re down the road and you’ve got $40 million in debt, and you don’t have a name, you’ve got pretty good faculty, but it’s nothing to write home at who really wants to acquire you? The challenge is the boards are not looking forward far enough and they feel like if they sell the institution that they have failed. That is absolutely different than an entrepreneur thinks about it. An entrepreneur, they may do great, what’s their crowning achievement, selling the company, their exit strategy. We need to start thinking more like entrepreneurs and higher ed and I know that comment will have reverberations for a long time, but we really need to, we need to take, boards need to take, and presidents too need to take their fiduciary responsibilities very seriously. They do for the most part, but they need to also look at it from a long-term perspective and don’t be so attached to the institution but be more attached to the students and what’s best for them.

Tom Netting: And one of the things I’ll just add to there, and I agree with you. And so this is, as I often have heard people say, I’m in “violent agreement”. So, my violent agreement is one of the other things that those institutions are going to have to be mindful of, as we potentially see those acquisitions or consolidations, is the regulatory environment. There is a lot of greater regulatory impediments or challenges to changes of ownership or changes of control now under the new regulations than there were previously. And they apply to all institutions. A lot of them, let’s be honest, were written with the for profit and the private non-profit consolidations in mind. But as we talk about this potential declining maturing entity that is higher education and some of this in traditional academic settings, they’ve got to play by those rules too. So that’s going to play into it as well.

Drumm McNaughton: Except with a new administration coming into town, I think, and this will be one of my predictions. I think a lot of these regulations that were put in place or these rules, I’m speaking with somebody who really understands the difference between regulations and rules, and I have to be really careful with my language on this, but I think a lot of these rules that have been put in place are going to get scrapped.

Tom Netting: I think so and again you and I have had conversations with your listenership as in the past about The Loper Bright case and deference to Chevron and the fact that a lot of these regulations are going to be challenged, across all cabinet level agencies, not just higher ed, but certainly higher ed to be sure. So again, another thing for us to talk about in the new year.

Drumm McNaughton: Before, we leave the demographic cliff, leave the enrollment, I think there’s one other piece that’s really a big question in my mind, is the international students and deportation threats. There have been a number of higher ed institutions who have told their international students be here prior to the inauguration, because once the inauguration happens, we don’t know what’s going to be able to happen with immigration. Institutions are concerned about this. If we have a drop off of international students, on top of, demographic cliff, that is really going to hurt higher ed institutions from an enrollment perspective. Enrollment equals tuition, equals dollars, equals staying in business.

[00:41:02] Innovative Approaches to Enrollment

Tom Netting: So as we look at all of this and enrollments, what should institutions be looking at or considering right now? You know Wayne Gretzky always used to say that, “it’s all about going where the puck is going to be not looking at where it is currently.” Where’s the puck going to be and what would you suggest for them to be doing?

Drumm McNaughton: You know, Tom, there’s a few things that institutions can be doing.

One is academic realignment. You’ve got to take a look at your programs, which ones are profitable, which ones are not profitable. And unfortunately, that’s going to require some significant, it may require some significant changes. Some institutions are doing dual enrollment, i. e. enrolling students from high school and allowing them to get their G. E. Credits out. This is exploding in Idaho and in Indiana. This is a good thing. Many institutions will look at this as saying, “Oh my gosh, we’re losing one, we’re losing two years of potential tuition”. Well, guess what? You’re also speeding up your graduation rate. It’s a positive thing overall. Many of them are moving to three-year college degree, three year bachelor’s degrees. The New England commission on higher ed, the Northwest commission on higher ed, they have all been doing this for at least a year, if not longer. And HLC is now getting into that as well. So, it’s possible to get this approved. Is it going to require some changing around of where you do your general education credits, and you get those AACNU great things that employers want out of students? Yes. You don’t necessarily have to have four English courses. You may be able to do two English courses, but then put in writing requirements and other courses to where people can understand good writing. They can work in teams. They can do critical thinking and all those kinds of things. I think that’s really important.

There was another one that I just read about, which was amazing. Western New England University, it’s part of a growing number of colleges that are offering direct admissions. Now what are direct admissions? Bypassing applications, bypassing recommendations letters, sometimes even the application itself. When someone graduates, they’ve got transcripts and they go, this person, good, we’re going to go ahead and admit you to the college without even applying.

And, oh, by the way, we’re going to give you X number of aid, a scholarship or something like that. Think about it from a student perspective. College approaches you and say, we want you to come here and we’re going to give you these scholarships to do it.

Tom Netting: What have you done for me lately?

Drumm McNaughton: What have you done for me lately, one and two, do you really want me? They’re going to usually go with their first or second Institution that they apply to. Well, if you don’t have to apply it’s just like “wow, I’m good”, that says something huge to them.

Tom Netting: Well, Drumm, it also speaks to the prior discussion about competition a shrinking pool of individuals for a sustained and not necessarily overly constricting size of a group of incoming institutions. You’re fighting more for all of the individuals, supply and demand.

Drumm McNaughton: Mm hmm. Absolutely.

[00:44:21] Public Perception and Regulatory Challenges

Tom Netting: Talk about public perception with regard to that and also, I would be remiss if I didn’t ask you to talk a little bit about OPMs and the online environment because that plays heavily into this competition as well. No?

Drumm McNaughton: Oh, Oh, absolutely. Public perception, we’ve already talked about how it’s dropped significantly. But we’ve got five states who have done away with legacy admissions. That’s huge. We’ve got some states who are actually legislating “you cannot do legacy admissions”. There’s an elitist perception about higher ed, and these are some of the things that they’re doing to combat that. Is that a bad thing? No, I don’t think it is people, if you really want to take DEI away and the premise of, you are admitted based on your own merit, not your skin color, not anything like that, and oh, by the way, not because your parents went here as well. That is leveling the playing field,

Tom Netting: And to that end, also, again, you talked about it with Western New England University and others, as we’re seeing more and more institutions also moving away from ACT and the SAT or even on higher level degrees and credentials, the MCATs and everything else, being more optional than mandatory,

Drumm McNaughton: Except that you’re seeing some institutions going back to those as well.

Tom Netting: Right. And again, that’s why I’m curious because it does seem to be an ebb and a flow right now in that regard

Drumm McNaughton: Basically, I would not want to be an enrollment officer at a college or university right now. You have as much or more headaches than the university president does. And with so many different things up in the air, you mentioned OPMs, you can probably talk better to this than I can with all the legislation that’s bouncing around in college with the rulemaking at the Department, et cetera. OPMs have taken a major hit. 2U is actually moved away from, not completely, but they’re doing more micro credentials rather than boot camps, things like that. That’s what we’re starting to see is more of the stackable credentials. We’re starting to see more of micro credentials. Not only coming from the OPMs but coming from institutions as well.

Tom Netting: Again, what about and how does all this play with the faculty and the students, Drumm? Again, you talked about the admissions individuals. This has got to weigh heavily on, let’s be honest, the true providers of the education and the individuals that are receiving that education. No?

Drumm McNaughton: It certainly does. The public perceptions have obviously dropped, but there is a growing sense of student and faculty disengagement. I wouldn’t say the majority, but I say a number of students are going there and they’re looking at higher ed as just a check in the box rather than an opportunity to learn.

I think in some ways this goes back to the, oh, what’s the word I’m looking for? The immediate satisfaction.

Tom Netting: Instant gratification or things of that nature

Drumm McNaughton: Yeah, what you said

Tom Netting: Yeah, that thing.

Drumm McNaughton: I think it goes back to that instant gratification part but we’re hearing more complaints than we have in the past about college. You know, it’s becoming more transactional, checking the box, rather than a hunger to dive into a particular subject. I remember talking with a faculty member back, just after the pandemic, and faculty are completely burned out. They’re having more and more duties putting on. They’re becoming informal therapists for students. You know student will come in the office faculty member will say, “how’s it going”, and they don’t expect the student to unload on them but the student does.

Tom Netting: They do. Yeah.

Drumm McNaughton: So, it you know it’s very, very challenging in that. We’ve seen this quote social contract break down, with corporations and employees, back in the nineteen eighties and the nineteen nineties when we had corporate structuring. It’s not surprising that it’s happening. There is this thing called tenure, which many states are trying to do away with tenure or post tenure reviews, et cetera. They think there’s a lot of faculty out there who are deadwood that aren’t doing it once they’ve got tenure, they coast. That’s not really the case, but they’re allowed to go out, now that they have tenure, they can go out and do research in other areas. It’s a hot mess.

Tom Netting: Again, let’s play this forward. You’ve talked about the levels of challenges for everything from admissions, obviously the instructors and the like. Governance has those issues as well, right?

Drumm McNaughton: Yeah. Oh, absolutely. And I get so many different calls from board secretaries and board presidents about, “our board is not functioning well”. I had one from a colleague of mine about a week or two weeks ago and he told me, “My board is a mess. They can’t make a decision. They’re infighting, et cetera. Can you come help?” I think the poster child for this, really, is North Idaho College, who’s on “show cause” right now from the Northwest Commission because there’s been so much political infighting. I think one of the casualties of this huge political divide that we have right now is the ability to negotiate. The ability to find commonality and leverage those points. Instead, it’s become, “I’m right. You’re wrong, and I don’t like you. You’re a no-good S.O.B, et cetera, and I don’t want to work with you”. The days of the Senate being the last great deliberative body, as much as many folks don’t want to do away with the filibuster, frankly, unless they do away with the filibuster, they’re not going to get anything done and that’s going to have huge ramifications for the country.

Tom Netting: So, I’m watching the clock and I’m trying to be mindful. And again, as the case with you and I, we are going a little bit long. I want to hear it on AI and also on accessibility of costs before we give proper credence to your predictions for 2025. So, want to talk a little bit about those and then go into predictions?

Drumm McNaughton: Sure.

[00:50:51] The Role of AI in Higher Education

Drumm McNaughton: We talked a bit about AI a little bit earlier in the program. Some institutions are really embracing it. The Kogod Business School at American University. Their dean of their college of business directed, “we’re going to have AI in every class we have”. It may be building AI, maybe just using it etc. So, in twenty courses they’ve changed those courses to include that. We talked about Madeline Pumariega at Miami Dade College, they’re doing great. But then you’ve got the others, when it first came out, faculty were up in arms. I was doing a strategic plan with one institution, and I’ll use AI, I’ll input five, six, seven different things and say, write me a vision statement. I did that and it came out with a pretty darn good vision statement. The folks in the room said, we can’t use that. We’ve just plagiarized it. It’s okay, show me where it’s plagiarized. You’ve got the extremes of behavior.

AI is going to change everything. University of Wisconsin faculty, they’re concerned AI will replace them. No, there’s great uses for it. Enrollment management, that is a incredible place to use it because you don’t need the personal touch until later in the funnel. Measuring student outcomes, I haven’t seen anybody doing this yet, but using every year’s part of the accreditation process you have to measure student learning outcomes called program assessment. Why not program a i to be able to do that for you rather than having a faculty member spending a week two weeks on writing this up, you could have a i do it. In a matter of two hours. You don’t leave it to AI, you have a faculty review it, etc, but it makes perfect sense. So, AI we’re going to see more and more use of AI in higher ed and in society.

Tom Netting: Now a little bit about, accessibility and cost. We’ve talked a little bit about DEI. We’ve talked a little bit about a number of these pieces, but, again, this is what’s on the mind of a lot of people here in Washington, to be sure, is how do we grapple with accessibility, “cost”, as well as the fiscal interest as we look at all of these various issues.

Drumm McNaughton: It is a huge mess, it really is. More than 200 campuses have rolled back DEI efforts since April of this year, and that’s according to the Chronicle of Higher Education. 86 campuses have changed policies, even though lawmakers didn’t require them to do it.

Restructuring, closing offices, changing job responsibilities, there’s huge things going away. And I guess, WASC, because they were starting to come under fire proactively, I don’t know exactly why, WASC did this, but they backed away from the diversity statements and then backed away from the proposed changes when they had so much blowback from ACLU, many of their member institutions, et cetera. So, DEI is going to continue to be a flashpoint. What it reminds me of is, and you probably remember this as well, that old reverse discrimination lawsuits that we had. So, we’re seeing change, University of Michigan at Ann Arbor. The provost has banned diversity statements in faculty hiring, promotion, and tenure process, major things.

Tom Netting: Alright, so I want you to take a deep breath. I want to say, “thank you very much. Again I am always amazed at how well versed and well-read you are and, again, to your credit and to your listeners credit, all of what you bring to the passion, with regards to your reporting on higher education and the like. Again, your A to A plus from 2024 is one of the reasons why I want to give credence and time for your 2025 outlook and your predictions for 2025.

[00:55:00] Predictions for 2025

Tom Netting: So, drum roll and without further ado, all right, Nostradamus or Carnac what do we got looking forward into 2025?

Drumm McNaughton: Well, I think the first thing is going to be politics.

Tom Netting: Really? I’m shocked.

Drumm McNaughton: Well, you, out of deference to you, my friend.

HEA, we’re going to see it to some degree. And I think you’re probably right, it’s not going to be a bill that gets passed independent, where you’ve got to get past the majority in the Senate for debate. I think it’s going to get done via budget reconciliation. I think that’s probably the only way.

I think we’re going to see short term Pell. That is a priority for the Republicans, and I think, personally, I think it’s a really good thing.

Tom Netting: And Democrats alike, Bobby Scott, the Bipartisan Workforce Pell Act with Dr. Fox.

Drumm McNaughton: I think that’s very true. Department of Education going away. No, I don’t see that. Does it need to be reorganized? I probably shouldn’t go into this, but yes, it does. There needs to be better clarity on what their roles, responsibilities are, especially, and something I learned from you, looking at the triad. How does that all work together? The triad being the attorneys general from the states, the accreditors and the Department. I think I got that right, don’t I?

Tom Netting: You did. Well, let’s not hold it to just the Attorneys General, but the commissions that are in each state that are responsible, and react and respond a lot, to the Attorneys General.

Drumm McNaughton: Oh, absolutely. See, this is why I have you along to keep me honest and make sure that I’m saying things properly, like rules and regulations.

Tom Netting: There you go.

Drumm McNaughton: So, student debt repayment. I don’t see that having much legs. I really don’t, Student debt repayment wouldn’t be an issue if the cost of college was less, but there it is.

Institutional accountability. Yeah, I think we’re going to see more of that, especially in the first two years, looking at outcomes, earning assessments. I think we’re going to see all those.

Tom Netting: And as a way to potentially get at some of the issues related to cost. So those are kind of, I like the fact that you brought those up simultaneously, because there’s a lot of nexus between those two.

Drumm McNaughton: Absolutely.

Institutional oversight. Oh my, we are going to see some change in the accreditors for sure. It’s going to get legislated. Now NACIQI will definitely get involved with that and the NACIQI unfortunately has become much more of a political body than it used to be.

Tom Netting: The National Advisory Committee on Institutional Quality and Integrity, for those that are not quite as familiar with that acronym.

Drumm McNaughton: Thank you I appreciate that because I couldn’t remember it.

Closures and mergers. Yes, yes, yes. We are going to see an acceleration of that. I’m reading more and more institutions who are two weeks away from closing doors. People need to be aware, especially boards, of the impact that you have on your employee’s lives, your student’s lives, and your community’s lives. If you’re headed down that path, it’s not a failure. What you’re doing is making sure that you’re taking all those people into account.

Frankly, you’ve got four options. You can buy something. You can sell yourself. You can consolidate and, there’s organizations out there that can help you do that and work back end, et cetera, build a system, whatever. Or you can close. Which of those do you really want to do? It’s not close. So, the enrollment decline is going to happen. We’re going to have a little bump in 2025 because it’s really going to be the last good year before the demographic cliff, plus with FAFSA being fixed, which pretty much everything I’ve read it is, then we will be able to do that.

But subsequent years, it’s going to be difficult.

Deportation threats, that is a wild card. I have no idea what’s going to happen with that, but that could impact your enrollments. AI, embrace it. You’ve got to embrace it. There will still be institutions, and especially in faculty ranks, who will not want to embrace it, but you need to do it and figure out how you can use that to have students develop their own ability to think critically, i. e. generate something via AI, and then make them go in and analyze it, and is it correct, how does it work, etc.

Free speech is going to continue to be an issue on campuses. There were many folks who were very upset about the reactions to the October 7th stuff. Think back to the Vietnam War, the protests in Berkeley on campuses and things like that. These are students. It’s not wrong to be able to criticize things. It’s wrong to get violent about things and we’ve got to be able to remember that college is a place where students come to learn, most importantly, who they are and what they stand for, and part of the process of, I can’t believe I’m saying this, but I am, but part of the process of protesting is them finding out who they are.

And then lastly, DEI, I think given everything that I’ve seen, I think the efforts to stamp out DEI are going to continue. We’ve seen a lot of it. Are we going to see it to the same degree? It wouldn’t surprise me. So those are my predictions.

Tom Netting: We will see a year from now, God willing, we’re both here and both healthy and well. A couple of key takeaways very quick, literation. I see you talking a lot about disruption.

Drumm McNaughton: Yes.

Tom Netting: A lot about deregulation, and a lot about direction, meaning the direction and the changing that both the public and the families and students are already taking and how that will impact higher education.

And then the direction, as in the organizational direction, by all of the governance structures and all of the levels within the educational environment. Needing to, again, be adaptive and willing to participate and get involved in those processes early and often. Fair?

Drumm McNaughton: Absolutely. I think the days of a college or university board meeting once or twice a year are going the same way as the dinosaur. Boards have got to stay engaged much more and remember that old adage, NIFO. “Nose in fingers out.” You’re there to provide oversight, you’re not there to run the college.

[01:02:15] Closing Remarks and Acknowledgements

Tom Netting: Well, want to say thank you. I hope I lived up to Deb’s prior efforts in this regard. I, again, am astounded, as I said earlier, about the wealth of knowledge that you possess and certainly the passion that you bring. And I just wanted to say, Drumm, thank you for letting me sit on the other side of the process for once. I enjoyed it and I hope that you did too.

Drumm McNaughton: Tom, thank you so much. I did enjoy it. Deb has always done a fabulous job, and you have stepped in very admirably for her, so thank you for spending this time. It’s been fun to, look back at these things with you. You bring such a unique perspective to higher education; you’ve been in it so long from multiple different levels. I just want to thank you for all your service that you’ve done for this community.

Tom Netting: Thank you, very much and happy holidays, to you my friend.

Drumm McNaughton: And you as well. Looking forward to a wonderful 2025. Thanks for listening this week, and a special thank you to my co-host, Tom Netting. Tom, it was a pleasure working with you on this end of year, and as always, you never cease to amaze me about your knowledge about Washington, higher ed, and the political process. Thanks again. I really appreciate you taking the time.

I also want to give a special shout out, this time of year, to my team that helps me put these things together every week. Tamara Taylor from Show Up Strong, who’s my website extraordinaire person and also takes care of the majority of the marketing. And then David White from DavidWhiteVoice.com. Without the two of you, I don’t know how I would be able to succeed in doing all the things that The Change Leader does for higher education. So, to the two of you, thank you from the bottom of my heart for all that you do and all that you’ve done over the years.

Folks, special thank you to you as well for tuning in as often as you do. I’ve really enjoyed doing these podcasts, and I especially enjoy it when I hear great comments back from our audience saying, “I really learned so much about that”. That’s the whole purpose of doing these things and so thank you for tuning in and I hope you all have a wonderful and very successful 2025.