Higher Education 2026 Planning and Outlook with Lessons from 2025 Predictions:

Changing Higher Ed podcast 291 with guest host Tom Netting and co-host Dr. Drumm McNaughton

Transcript: Changing Higher Ed podcast  291 – with guest host Tom Netting and co-host Dr. Drumm McNaughton | Higher Education Planning and Outlook for 2026 with the lessons learned from Dr. McNaughton’s 2025 predictions

Introduction to Changing Higher Ed^®

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.

[00:00:31] Introduction and Welcome

Drumm McNaughton: Thank you David.

Welcome listeners, and welcome to our annual end of the year review, where we take a look back at 2025. It’s been one heck of a year, and guess who I’ve got to co-host with me my regular Washington update Guest Tom Netting. Tom, welcome back to the show.

Tom Netting: Drumm good to be back. Kind of hard to believe it’s the end of the year already.

Drumm McNaughton: No kidding. I mean, I think I woke up two days ago and it was just turning to be 2025 and now we’re about to hit 2026.

Tom Netting: Amen. But you know what?

[00:01:06] Reflecting on 2025 Predictions

Tom Netting: You had a heck of a 2025, I’m going to start calling you Nostradamus and I might be asking you to come to Vegas with me after your predictions and what came true in 2025.

Drumm McNaughton: Yes, I’d have to say that both of us were pretty clairvoyant when it came to 2025. There were a lot of good predictions, and I’m really sorry to say a lot of them came true.

Tom Netting: To be honest with you, I think you batted a thousand.

[00:01:32] Higher Education Act and Department Reorganization

Tom Netting: I look back over our discussions from a year ago, you hit the fact that HEA was not going to come through on its own, but come through with reconciliation. You nailed the fact that short-term Pell would be included there. You talked specifically about reorganization of the Department of Education, and you even went so far as to say, Department will stand, but reorganization and the actual direct quote, “I think that there will be some movement in terms of the responsibilities and roles, especially as it relates to higher education and to the accrediting bodies”. You nailed that. Accreditation still continues to be one of the top issues of the day.

[00:02:13] Challenges in Higher Education

Tom Netting: Student loan repayment, you talked about the concerns around that and the need for continued focus on college costs. Certainly we see that coming through. And last but certainly not least, you also talked specifically about the issues around focus on outcomes and on institutional accountability. Everything from DEI, you wrap that in there as well as, other aspects of the changes in what the presidents of colleges and universities were going to need to be focused on, and the fact that they were going to need to meet more often throughout the course of 2025. Like I said, I think you hit it out of the park.

Drumm McNaughton: Well, thank you. It was, as I said before, I’m really sorry that I did because I have to think back to a podcast that I did with Gordon Gee five years ago, and he said, “COVID has accelerated needed changes in higher ed by a decade or more”. And he was absolutely right.

Gordon’s another one of those who’s very clairvoyant, really has his finger on the pulse of higher ed.

[00:03:19] Significant Changes in Higher Education

Drumm McNaughton: We have, for a while now, needed significant changes in higher ed. There’s a saying in India, Shiva dancing. There’s three entities in India, Brahma, Vishnu and Shiva. Brahma the creator, Vishnu the preserver, and Shiva the destroyer. Before you can have any kind of significant change, you have to destroy going into that. And when I step back and take a look at things, that’s where we are right now. We’re having to break up so much of what we thought was really good, and in many respects it was good, but these changes are necessary for us to move forward and make higher ed as meaningful for everybody else as we know it is now.

Tom Netting: And interestingly enough, we’ve seen a lot of that, I don’t know if it’s destruction, but certainly recasting of higher education. And if you think about it, I agree with you, whether it be from Ancient Proverbs or just reality, the Higher Education Act was last reauthorized almost 16 years ago, 2008, reauthorization started in 1965.

We, need some dismantling and some restructuring. And certainly there’s so many issues too that we focused on in 2025, that as we look at the end of the year, maybe we want to run through where we sit as we come to the conclusion of the year, focused on what you’re seeing top of mind. And then, I can’t wait to hear your predictions at the end of this, my friend, for 2026.

Drumm McNaughton: Well, I’m not sure I’m going to do this well as I did before, but let’s see where it goes. So starting with the outlook.

[00:05:04] Economic and Enrollment Pressures

Drumm McNaughton: Moody’s, Standard & Poor, they’re all saying that the outlook is negative. The citing federal policy shifts rising, costs, increased competition for students. We had some decent news at the higher ed education price index went up. It went up a little bit more than inflation. The bad news with that, it was the third worst since 2008. So the costs are going up, their expenses are growing faster than revenue, and enrollment, the enrollment cliff, new immigration restrictions, student loan caps, all of these are going to pressure enrollment.

Wait a minute. Now it sounds like I’m getting into predictions

Tom Netting: Already. Yes. You’re, don’t put the cart before the horse here. Drumm.

Drumm McNaughton: Okay. Well, let’s just put it this way. 2025 was a difficult year for higher ed and I would say 2026 may be equally as difficult.

Tom Netting: Now, I do have one test for you on this one as we get recent information.

[00:06:10] FAFSA and Student Loan Interest Rates

Tom Netting: They did announce that the Department of Education, just yesterday, that the number of FASFAs had actually grown by a significant number this year over last. I think some of that is simply because we had the problems with FAFSA over the prior two years. That might be a rationale for that 150% increase or thereabouts, but it was interesting for me to see that information come out and note that at a time when, as you said, overall projections are that the number of students is flat or declining.

Drumm McNaughton: Mm-hmm.

Tom Netting: There are certainly all the challenges you brought forward, but we’ve also got an economy that based on what just happened with the interest rates that we might also potentially see a reduction in student loan interest rates.

Drumm McNaughton: That would be a very good thing to have that decrease in, in the interest rate. But there’s a flip side to the FAFSA numbers growing and that flip side is a negative, saying that there are more students out there that need assistance than there were in the past. So I don’t think you can look at the FAFSA numbers just in the bubble of the last two years, three years since the FAFSA application was revised based on what, was Alexander, what was the senator’s name?

Tom Netting: Lamar Alexander.

Drumm McNaughton: Lamar Alexander, what he had wanted to do with this. I think you have to go back to previous, maybe even pre COVID before you see that and look at those numbers.

Tom Netting: No, to be sure. And again, FAFSA simplification had its benefits, but it also had its drawbacks in terms of the implementation and the like. And it was hard to take all of that and reconstitute it for any administration. But it is interesting to see that, again, back to your analogy of the three, I think we’re in the middle, we’re not seeing total destruction, but we’re not also seeing the heaven and so there’s a lot of, there’s a lot of push and pull here.

And again, that’s what I’m just like to emphasize as we talk about it, because that’s what I feel for most of this year is we talk about politics.

[00:08:12] Political Influence on Higher Education

Tom Netting: I mean, let’s be honest. Granted, politics plays into everything, but politics has had a heavy, heavy dose of its inclusion in this year. Fair statement?

Drumm McNaughton: It’s way more than fair. I don’t think there’s anything related to going on to higher ed right now from a macro perspective that doesn’t relate to politics. It’s taking over. It’s a battle of the right versus the left. And you and I have talked about this. That pendulum swing. When Democrats get in, we see more regulations. Republicans get in, we see less regulations. The problem is that pendulum has slammed up against the stop too hard this time, and it’s starting to break things down.

President Trump’s attacks on higher ed, they’re motivated by several factors. Combat perceived liberal bias and ” woke” analogies, campus protests, curbing dissent, and we’ll talk about this more, but using research funding and other federal funding as leverage to force universities to be in alignment with the Right’s political agenda. I mean, those are all very, in my opinion, very dangerous things.

The other piece with that, and this affects enrollment, is immigration.

[00:09:38] Immigration and Global Education Impact

Drumm McNaughton: The visa issues that we’ve seen, travel bans, it’s now up to 39 different countries, including Nigeria, which is among the top 10 countries that bring students in for higher ed, whether it be undergraduate, graduate, doctoral. This is critical because this hits enrollment, which hits college’s bottom lines, we haven’t seen as many closures in 2025 as we did in ’24 by one number.

Tom Netting: One number.

Drumm McNaughton: But you know, it still doesn’t make things good because with the demographic cliff, the first year we’re going to see that is enrollment for 2026. There’ll be far less traditional age students. It’s going to impact finances. Another reason why Moody’s and S&P have said the outlook for higher ed is negative.

Tom Netting: I think you’re right. And again, certainly we’ve seen all of those play out. Talk a little bit more about immigration. We’ve seen, again, data, you and I look at that on a regular basis. We are seeing a precipitous drop in foreign enrollments in the United States. We are also hearing about institutions looking and taking a critical look at their delivery of study abroad programs and their campuses abroad.

Drumm McNaughton: Mm-hmm.

Tom Netting: What’s your thought on the impact of immigration and the impact of the United States as a global educational provider, I guess is the broad way of looking at it.

Drumm McNaughton: It’s a mixed bag, Tom. The challenge that I am seeing, we had a lot of universities go branch campuses. New York University comes to mind, they’ve got branch campuses in Abu Dhabi, they’ve got it in Hong Kong, Singapore, I believe Australia as well. They’ve done a great job. They’re go through the US accreditation system, et cetera.

Here’s the challenge because the US it’s a twofold thing because the US has cut back on immigration, so much less foreign students are coming in. It hits the US enrollment, it hits the pocketbook, et cetera. Then on the other side, you’ve got, actually, there’s three pieces. You’ve got the research piece as well.

And many scholars come over here to do research, the visas. That’s, that’s impacting that as well. But on the other side of the coin, you’ve got China, you’ve got other countries as well, whose institutions are moving up significantly in The Times Higher Ed rankings, still, Harvard, Caltech, Princeton are way up there, Cambridge.

You’ve got all of these universities that are up there, but you’re seeing China starting to go up and up. So people are saying, I don’t need to go to the US anymore. I can get a high quality education that’s recognized globally, overseas, it costs them less. So that’s the other side of the coin that is hurting academics.

It’s hurting enrollments here and it’s hurting colleges, bottom lines.

Tom Netting: And it’s at a time.

[00:12:54] Accreditation and Institutional Accountability

Tom Netting: When our structure, our higher education structure is being significantly questioned, fair academic freedom, the way in which delivery is being done, the accountability measures and so much more are all in flux yet again, the word I choose to use

Drumm McNaughton: Mm-hmm.

Tom Netting: here in the, in our nation and in our what certainly my daily life looks at.

Is that not fair? I mean, we’re looking at a lot of upheaval, a lot of questioning of, like you said, the norms of the past, whether that be the research side, whether that be the utilization of the endowment funds, whether that be the type of delivery that is being provided, and is it too liberal or too conservative?

I espouse upon all of that. If you choose,

Drumm McNaughton: How long do we have?

Tom Netting: It’s your podcast. It can go as long as you want.

Drumm McNaughton: Well, without boring our listeners today, all of these things do come into play with that. Another thing that’s hurting enrollments from a foreign, enrollment perspective is the culture here in the US It has become very, us against them. Either you’re with me or you’re against me. You’ve seen over 10% of congress saying they are not going to run for reelection because it’s a toxic environment up on The Hill.

Well, you’ve also got shootings. Just recently you had the MIT professor shot. You had someone shot, oh, what was, I’m sorry, I forgot the other, the uni just recently.

Tom Netting: Well you had Brown University

Drumm McNaughton: Brown University, that’s what it was. And that’s not the only thing people view the US. Differently than they used to before.

It was always the land of opportunity. Now it still has that opportunity if in fact you meet the demographics of what other folks want to see. Some folks want to see not everyone, but what other folks want to see. And if you don’t meet them, should you be afraid for your own life and safety? Many folks coming from overseas, that is exactly how they feel.

You see that in tourism, but you also see that in foreign enrollment in US institutions. It’s sad to say, but you know, that’s the truth of the matter.

Tom Netting: It rolls into discussions like the antisemitism and the Palestinian discussions. It rolls into a number of those various things. I may be leading the witness towards your predictions at the end of today’s call, but. We’re seeing a great deal of pressure, as you said, downward pressure placed on institutions.

Right now. The hammer has certainly come down on the focus on traditional education, their roles, their responsibilities, and the like. Care to talk a little bit about that and I assume you’ll have something on that potentially in your predictions. I’m going to lead you that direction, if not

Drumm McNaughton: Oh, ab absolutely. We’ll have predictions on that in many respects, we as the university institution, we are trying to figure out what, who we are. For too long. We have been very insular. It’s learning is important, et cetera. We are the experts. Higher ed, if you go back to the California experiment with Clark Care, higher ed, is the public good.

Is it still important? Employers say, so the recent AAC&U survey of what employers want said that higher ed is doing a good job. That’s not what you hear in the news. But the employers are saying that they want to see civics, they want to see the public good, but they also want to see workforce development.

They want to see it be cost effective. We hear a lot about ROI for higher ed and I personally, I think. The ROI conversation has gone way too far, but students can’t be going to school. If you want to study something, great, but how is it going to help you going forward to make a living, become a better citizen, et cetera.

The stats are out there, the college education, you will end up earning three times the amount that you would with a bachelor, baccalaureate degree than you would with just a high school degree.

Tom Netting: We’ve certainly proven, again, whether it was through the negotiations from prior administration is literally back and forth over the last two decades on gainful employment and the like. But most recently in one big, beautiful Bill act now law, the assessment of earnings in relation to cost and borrowing is now part of the lexicon that I don’t think is ever going to go away from.

And that along with other outcomes, certainly as you noted, are things that I think that we’re going to see be a part of that new paradigm or that new structure going forward.

Drumm McNaughton: Oh, I agree. And for the first time ever, we have seen when people apply for FAFSA, we have seen a new earnings indicator warning students, that they show an interest in a university that graduates earn less than a high school student, there’s going to be a warning that pops up.

Tom Netting: that.

Drumm McNaughton: 23% of the institutions fall into this category

Tom Netting: Right now, the important thing here to think about though, is as we get further along, that’s going to become programmatic, not only institutional, but program by program. And I think that again, that’s going to be an interesting look into our future and hint 2026 of where some of this data and the like are going to go.

I’m sorry, mean to take you, off base with the discussions at the institutional level. Given our time, let’s take a step back from the institution. We’ve talked about some of the downward pressure there, some of the things that schools are experiencing.

[00:19:19] Department of Education and Policy Shifts

Tom Netting: Let’s talk about the triad and let’s start with the top end of the triad, the Department of Education.

You were correct that it wasn’t going to go away. It takes an act of Congress to do that as everybody has become all too familiar with over the course of this year. But certainly we’ve seen a lot of changes at the department. Your aspect and your take on the transition of OCTAE and the career in technical and vocational education.

Sorry, I get, in my world of acronyms, student financial aid going to labor, other parts going away from the department, but the department still obtaining, quote unquote, control your thoughts.

Drumm McNaughton: Well, do they really have control? That’s the question I would ask. You just had the department request a bunch of people come back. I believe it was an OCR to handle all of the complaints. They rift too many people and now they have huge backlog of complaints.

Tom Netting: And the courts came into play in that as well. because the Supreme Court and others made that determination and other courts at the, at their, the apPellate level.

Drumm McNaughton: Yes.

We’re seeing three pieces with this we’re seeing the outsourcing of programs to other departments. To me, in some ways, does it make sense? Maybe in some cases it does, but you’ve got people taking over these programs who don’t know anything about higher ed, which is really problematic because just take student loans for example.

They want to outsource that, or they have outsourced that to treasury or labor. You know that better than I, they’ve done away the OB3 did away with many of the student loan type programs. That’s going to impact enrollment. So. Trump on the campaign. He vowed to, and I’m quoting Fire, the radical left accreditors who have allowed our colleges to become dominated by Marxist maniacs and lunatics.

To me, that is almost a declaration of war on higher ed now.

Tom Netting: well certainly on the accreditation wing of the triad, and you gave me the perfect segue. You talked about the department and the administration side. We’ve got two other parts of that triangle accreditation you just led into. So talk about accreditation.

[00:21:50] Accreditation Process and Challenges

Drumm McNaughton: Well before, before we get to that, we’ll go with one of those bridges between the department and the accreditors

Tom Netting: for it.

Drumm McNaughton: which the National Advisory Committee on Institutional Quality and Integrity.

Tom Netting: It’s a mouthful, isn’t it?

Drumm McNaughton: It is a mouthful. NACIQI just rolls off the tongue so much easier. NACIQI is supposed to meet three times a year.

They didn’t meet in the summer. The speculation was to get those people who were appointed by President Biden off of NACIQI so that the department through President Trump would be able to appoint six. There’s 18 people total. Six appointed by Democrats, six appointed by Republicans, and six by the department.

The last meeting was on Tuesday and everyone was expecting huge fireworks. Well, they didn’t get them. It got a little bit testy when it came to electing who the new chair was going to be. I, like I say, it wasn’t completely free of drama, but what was interesting was delaying that summer meeting, they had three accreditors to review NECHE.

Who do they accredit?

Tom Netting: Harvard

Drumm McNaughton: Middle states, Columbia—WASC;, UCLA, these and others, these are three institutions that are in, or have been in the crosshairs of the Trump administration using the antisemitism hammer. And we’ll talk a little bit about hammers in a bit, because they’re bringing every hammer that I could potentially think of.

So we’re looking at that. And Nicholas Kent is vowed to make significant changes to accreditation process, to look at outcomes. Frankly, I would say, “go for it”. That’s really important. You need to be looking at outcomes, but you also need to be looking at processes as well, because the processes go for the outcomes.

Does it require a university, or should it require a university to spend a full year getting ready for an accreditation visit? Absolutely not, but something has to be done to simplify it, to look at outcomes, and to look at processes to make sure you’re going to get the right outcomes.

Tom Netting: But hold on. Let me add one more thing to that before we get away from it though. But we also have to understand the fact that accreditation and the process of acquiring accreditation is not a wind sprint, either. The President has put forward the notion of attempting to change accrediting agencies every three to four years. That’s the normal length of an accreditation process. And while you’re right, it may not take a short period of time or a long period of time to complete the self-study and the like. To go through accreditation and especially initial accreditation, is not a overnight process either. It takes years to go through, especially when we’re talking about these changes. So how all of that plays into the future, again, hint towards 2026 is again, I think something that is going to be very interesting.

Drumm McNaughton: Oh, absolutely. And there are new accreditors that are starting to pop up. You’ve got the Commission for Public Higher Education, which really is a joint venture between the Florida system, South Carolina, North Carolina, Georgia, Tennessee, and Texas. They’re looking at things in a different way. In some ways I think it’s very good. In other ways, is accreditation going to become a rubber stamp if you’re part of this triad? What I’m seeing coming out of this is some good stuff. We’ll have to wait and see.

The other one, which has me somewhat concerned, is the National Association for Academic Excellence. This is kind of a rebirth of ACICS. The Accrediting Council for Independent Colleges and Schools, has a lot of the same folks on there. This one is a little bit concerning. New America had a really good piece talking about the new accreditors that are coming up if anybody’s interested in reading that.

But these new accreditors are spouting up. The Commission for Public Higher Ed came because many Southern states, North Carolina and Florida, voted to make their state’s institutions change of creditors each year. This was in a reaction to SACS COC when Belle Wheelan was there. I know Belle personally, great person. Be that as it may, SACS was the only one who did not have any kind of DEI standard as part of their accreditation standards. All arrestee accreditors have followed suit. They have taken the DEI away based on the interpretations of the law in the Supreme Court decision recently. But the accreditors are having to change, and I think again, for the good, so that accreditation doesn’t become a one year, two year thing. Now making colleges change accreditors every cycle, to me is ridiculous. But you know, sometimes that’s what has to happen to make things change.

Tom Netting: And I was alluding to exactly that, that as they look to do things that are potentially positive and bring about change, and change is not always a bad thing. While there’s an initial fear of change, let’s be honest. Wayne’s world, Wayne’s World, sorry, I went to a weird place on that one. We fear change! Anyway, sorry, I digress. The reality is change does bring, it’s a disruptor and it does bring about good things with it as well. But you need to be fully informed. And the notion of changing accreditors on a frequent basis is not a fully informed decision making process, I would submit.

Drumm McNaughton: I agree.

[00:28:16] State-Level Accountability and Funding

Drumm McNaughton: And the last piece of the triad we haven’t talked about is the Attorneys General.

Tom Netting: Well, the states.

Drumm McNaughton: states.

Tom Netting: had to make the same statement. It’s broader than just the attorneys general. Because keep in mind you have your state boards of education and others who are major influencers in that process.

Drumm McNaughton: Absolutely. And it’s up to the states to hold institutions accountable. Well, part of the challenge is you’ve got certain states, very liberal when it comes to establishing higher ed and holding accountable, and then you have others who are very much in higher ed’s face about what’s going on.

I don’t have the background to talk about this as much, but I also know that with the Department being downsized, one of the things they’re talking about is putting more and more responsibility on the states. Now, is that a good thing? Don’t know what’s going to come out of that, but it’s going to certainly add expenses to the states, more cost, higher taxes, possibly. I mean, all of these great ideas, states rights, let’s push it down to the states, whatnot. The states, do they have the budget? I don’t know too many states at this point who’ve got all this extra money laying around to take care of these things.

Tom Netting: Or the bandwidth, and you bring up a very illustrative point, the Negotiated Rulemaking that just ended last week.

[00:29:53] Workforce Pell and Short-Term Programs

Tom Netting: The new Workforce Pell program. One of your predictions, by the way, that finally came to fruition.

Drumm McNaughton: Yes.

Tom Netting: The good news is that provides additional access to Pell grants for shorter term programs to lead to in demand occupations and so on and so forth. We know the virtues, but a lot of what is the responsibility of making that program operative falls to the governors and the state boards to be able to implement. In fact, the first line of that process is at the state level. That’s going to be an interesting test subject. Do you agree?

Drumm McNaughton: Oh, absolutely. One of the challenges, the bandwidth of the states, the finances, et cetera, but you’ve got accreditors who are jumping into this pond as well. With the Higher Learning Commission, with NECHE, with WASC, they’re starting to step in to accredit certifications, mini certs, as well as what will end up being Workforce Pell.

So how are you going to be able to regulate, and you and I have talked about this before, how can you regulate what is quality? Is that going to fall on the states to do? I think if Department had their way, they would say, yes, we don’t have to do this. But there’s too much of an opportunity for fraud, waste, and abuse. Putting somebody through a program, a certificate, “oh, you’ve got all these new qualifications” and business doesn’t buy into it. You’ve got a set structure and mechanism through accreditors. And Melanie Booth did an incredible study for a higher learning commission on how to make this thing happen from accreditation perspective. I think folks have to be very careful about the way these dollars get spent.

Tom Netting: Well, let me play the devil’s advocate for you for a little bit here.

Drumm McNaughton: Oh, please.

Tom Netting: WIOA (Workforce Innovation and Opportinity Act), the Department of Labor Apprenticeship Programs. All of these shorter term direct to employment type programs are being elevated in the public eye. And certainly as you look at things like Workforce Pell. Which again, WIOA, lot of the criteria for WIOA are the same guardrails, understandably so to a certain degree, that are part of the short term Pell program. You’re seeing the financing, you’re seeing a number of the discussions, at least under the current administration, and I would submit to you even under the prior administration, that recognize the continuum of higher education and seem to be pulling from a lower level, meaning certificate and diplomas, forward into associates baccalaureates, master’s and graduate programs.

Drumm McNaughton: Yes, I would agree with that. But the question becomes, how easy going to be to trick the system to say, “yes, we will educate you, we will put you through this certificate program,” or whatever you call it, and then you come out the other end and you’re not employable.

Tom Netting: Well see now you’re coming back to the earnings again. So it’s interesting because these things do overlap is what I was just trying to tease out of this and the fact that, it does look like outcomes are still part of this process going forward. Earnings. And I know I’m watching the clock with you. I know that I’m on the other side of this, so I’m trying to keep the time, but I also think these are important things for your listenership to hear about.

Drumm McNaughton: Oh, absolutely. And don’t worry about time. Last year we did over an hour, and of course I bored everyone halfway through. They missed all my great predictions.

Tom Netting: We’ll see, that’s why we started with those at the beginning of this one. No, I hope they stick around. because again, there’s a lot more to go through here and just summing that up from my side and then you know, your ability to respond. I do think that, again, this is back to the change. This is back to we haven’t seen this kind of upheaval, consternation, and there are guardrails even because, and that’s where I was going with this short-term Pell.

[00:33:52] Guardrails and Quality Assurance

Tom Netting: We’ve learned from the abuses of the last time short-term Pell. There are people like you and I think, and others hopefully in your listenership that have been around this enough to know that was bastardized and abused before

Congress, as well as all of the individuals have certainly attempted to learn from that. The term used here in DC is “guardrails”. There have been a lot of guardrails put up. The 70/70 requirements, 70% completion and placement that is now part of workforce Pell. Those are new advents for most of traditional academia because they’ve never had to show those computations as part of an eligibility criterion for their programs.

So that along with earnings and some of these other things, again, that are part of WIOA but now are creeping one way or the other, shifting left or right, meaning from the Department of Ed Labor or Labor to Education, that’s the left and right I was referring to there.

Drumm McNaughton: Mm-hmm.

Tom Netting: They’re becoming more congruent and or at least more connected. And I think that’s a another interesting thing that we’re seeing take place right now.

Drumm McNaughton: Yes. You’re absolutely right on all of those things. I am a kind of a “let’s wait and see” type of thing, because the ingenuity of some people to be able to trick the system, especially with an AI, and this is not a segue to go into AI by the way, but the ability to trick the system is amazing. So I think we have to be careful with that.

I want to cycle back to one piece with this. We’ve seen all these changes, but at least from my mind, now you’re closer to DC obviously than I am, both in proximity and hearing what’s going on behind the scenes.

I think there never has been a really good vision put out by the Administration whether either left or right, I don’t think there’s been a good vision of what higher ed should be done and the reason for these changes. Now that could be, because I’m not on the inside, et cetera, but we’re seeing all these huge changes and they’re not being tied to anything other than we need to train our workforce better.

Tom Netting: And to be blatant. I think that’s what they’re tying it to the workforce. I think the notion of academics for academic sake or the enrichment and the holistic approach of academics is again, another thing that’s being challenged as we look at this.

Drumm McNaughton: Yes, but what about all of the good that comes out of research? I mean, one of the hammers, we didn’t talk about, hammers that the administration is using to get people to, to come to their way of thinking.

[00:36:41] Research Funding and Political Leverage

Drumm McNaughton: One of those hammers is research dollars. I’ve read, so many dollars have been taken away from Harvard, from Columbia, threatened in UCLA and many other institutions. These research dollars are going for really important medical research and other research as well. And there appears to be no rhyme or reason other than the Administration saying, “I don’t like DEI or trans, or whatever.” What’s the purpose of that? And. DOGE and other folks, they have just cut these things out, not with a scalpel, they’ve used an unsharpeded ax.

Tom Netting: Well in, in this town it would be called leverage.

Drumm McNaughton: Yeah.

Tom Netting: And let’s be honest, that’s what a lot of it has been is people become tied and wedded to those funds, and when you take them away, you can certainly see, and I think that this year has shown that people will react to and respond if put upon to see major financing dollars potentially taken away. A number of those dollars have come back, both from the courts and both from when decisions have been made.

Drumm McNaughton: Well, the courts are, that’s one thing. But again, looking at what is the purpose? Why are you doing all these type of things. Taxing endowments, that’s another one. It didn’t start just with the Trump administration, it started the house calling the university presidents in to testify.

I mean, they brought an academic perspective to what was tantamount to a firing squad, accusing presidents of plagiarism. These are all hammers that they’re using to try and get folks to move. Are they being effective? I don’t know. ProPublica came out and, said the DOJ pressured lawyers to find UCLA tolerated antisemitism.

So, these are not good things. I understand higher ed needs to change, but is this the right way to go about it?

Tom Netting: I’m not going to be the one to answer that question. I don’t necessarily think that the way you characterize all of that is fully accurate.

Drumm McNaughton: Well, you may be right.

Tom Netting: These people have responsibilities for what they do as well, and. I will tell you, it’s interesting that for the first time, traditional academia now finds itself, and this is a rabbit hole, I’m not sure I want to go down, but this is the first time that traditional academia in a long time has found itself on the hot seat.

There are other sectors of the higher education community that have always been called into task for issues that they will agree or disagree were justified.

Drumm McNaughton: I agree with that.

Tom Netting: Just like what you just said, Drumm, there are some that believe that all of what you just talked about in that hammer are fully justified.

Drumm McNaughton: Yes.

Tom Netting: There are others that don’t disagree with that. So again, this is where, that’s why I have to be cautious, especially in my position. That pendulum does swing both ways and we are in a very unique dynamic right now because a lot of what is being experienced by traditional academia are things that others have been put upon or feel that they’ve been put upon for much longer periods of time. Justified or not.

Drumm McNaughton: I can agree with exactly what you said. Now there’s fallout with all this. Students, 74% of college bound students say their perception of a school’s political stance on issues influences their decisions to enroll.

The funding cuts. The Chronicle came out and said they estimate a $1 billion impact to the economy because of the funding cuts. We’ve seen an uptick in violence on campus.

Tom Netting: Yes.

Drumm McNaughton: There’s a lot of fallout. You know why, why do we need a sledgehammer?

Tom Netting: I agree with you. And again, back to full, you know, violent agreement is the term that I’ve heard people use recently on some things. I’m in violent agreement with you that unfortunately, and this comes back to something you and I have talked about at length.

Drumm McNaughton: Mm-hmm.

Tom Netting: The polarization, the words you’ve heard me use with you behind the scenes on more times than probably either you or I count care to count. We have reached a polarization where unfortunately, as you and I talked about for over an hour recently, the ability to meet in the middle and have thoughtful discussion seems to be less and less attainable in this day and age than it was certainly in the past.

[00:41:13] Polarization and Respect in Higher Education

Drumm McNaughton: Well, in some ways it comes down to a respect for others’ opinions and really a respect for humanity. Just because I have one opinion and you have another, and we disagree and disagree very strongly, doesn’t mean that I hate you. Unfortunately, that’s what it’s coming down to, is if in fact you’re on the left and you hate somebody who’s on the right, because they’re on the right, you don’t know a thing about them and vice versa. The right hates the left. The name calling, woke, all of these things. Come on folks. When you take away all of the outside, you take away the skin, whatever color it is, we’re all the same blood and guts in the middle.

Tom Netting: And interestingly enough, education has also always been something that shouldn’t be partisan.

Drumm McNaughton: Exactly.

Tom Netting: The quality of and the delivery of education for the betterment of all students is something that, you know, it should be for everybody.

Drumm McNaughton: It should be. It should be.

[00:42:20] Civic Education and Debating Differences

Drumm McNaughton: And I think one of the reasons why the employers in the AAC&U recent study came out and said, “civic education is critically important”. How do you have discussions with people whose opinion you don’t agree with? We saw that phenomenon around the Thanksgiving table back eight years ago when Trump had been elected the first time. People loved him, they hated him, and it just got worse and worse. We can’t do this. At higher ed we have to be able to look at both sides, be able to debate both sides.

I read something recently in the Chronicle.

[00:43:06] Faculty Roles and University Governance

Drumm McNaughton: We all have our roles. The faculty Senate is supposed to help out, or, give their input on multiple areas. Typically, it comes down to the faculty. When the president comes in, the University of faculty unload on him, and then afterwards they go, “gosh, I hope I wasn’t too hard on you. I’m just playing a role”. It says, no, you’re not playing a role. You have to realize that the person across from you has feelings, has thoughts. They may be different than what you think, but they’re just as important a person as you are. Their opinions are just as important. Figure out a way to work them out.

Tom Netting: That’s what you and I both hope is where we’re headed as we go into the continuation of this dynamic timeframe.

Drumm McNaughton: Yes.

[00:43:53] Conclusion and Looking Forward

Tom Netting: Let’s talk about some of the things that bring that dynamic, and again, you talked about the wait and see perspective.

Drumm McNaughton: Mm-hmm.

Tom Netting: A lot of changes just took place and the “One Big Beautiful Bill” law,

Drumm McNaughton: Oh, yes.

Tom Netting: There’s a lot of “wait and see” that we’re going to have to see with how that all works itself through the system. True?

Drumm McNaughton: Absolutely.

[00:44:15] Workforce Pell and Accreditation Concerns

Drumm McNaughton: We’re starting to see that workforce Pell. That was a really good thing. The accreditation piece, that’s going to be coming up. Don’t know what that’s going to end up being, but I think that’s also very important and you’re going to have hopefully, the right people at the table to discuss these type of things. My biggest concern is if it doesn’t come to consensus and the Department just publishes what they want to, that’s a concern.

[00:44:42] Consensus in Negotiations

Tom Netting: Well, thus far, all of the recent negotiations have resulted in consensus. The individuals that are at the negotiating table and the prior negotiations have worked to consensus. We had the issues with loan servicing, that achieved consensus in the final regs that were developed last year. The RISE committee, which dealt with all of the OB three student loan issues, they reached consensus and candidly, a lot of people didn’t think that would happen given the just particulars of the loan issues and key issues like the definition of graduate versus professional and the different limits on loan eligibility that come with those two differential definitions.

You had the first half of the AHEAD committee, the accountability committee that worked on the workforce Pell that we talked about, that also came to consensus with all those guardrails and everything that we talked about. So hopefully, since it’s the same individuals that just did workforce Pell that are going to be doing the new outcomes regime of accountability or the do no harm regulations, that hopefully they can do so.

[00:45:47] Inflection Point in Higher Education

Tom Netting: To that end, as we look at their responsibilities, this is kind of literally one of the biggest negotiations, not that all that have proceeded them were not so important, but looking at low earnings outcomes, looking at every program and every institution, and going back to what we had just discussed, I think some of this is a matter of an inflection point within higher education of, are individuals looking at a shorter access point to higher education at the skills level, the trade level, a lot of individuals are looking at the opportunity cost, if you will, and cost being the issue here, between getting into the workforce sooner or an associate’s degree or bachelor’s degree or higher, that again, are laudable and certainly a career path and a track that you and I and many others have taken. But isn’t that some of where this is kind of an inflection point.

Drumm McNaughton: I would say absolutely. It is clearly an inflection point.

[00:46:46] Purpose of Higher Education

Drumm McNaughton: To me it comes back to “what is the purpose of higher ed and is it in fact fulfilling that promise”? The pendulum swing, public good, workforce development, civic duties, maturity, transformation. I don’t think it’s one or the other. I think it’s all of these,

Tom Netting: Agree with you all that and more.

Drumm McNaughton: Right.

[00:47:10] Employer Confidence in Higher Education

Drumm McNaughton: When we take a look at the latest AACNU study, one of their biggest things, employers have confidence in higher education and view the degree as a worthwhile investment. All employers, 70%, I mean, that’s, if you take a look at what people think about higher education, that number is down in the thirties. For people under 40, it goes up 74%. For 50 and above, it goes down to 56%. We won’t go Republican, Democrat, whatever, it’s interesting though, it’s the independents who are lower than the Republicans and the Democrats. In fact, the Republicans are even higher than the Democrats are.

Tom Netting: And wasn’t there a generalized statement about skilled and education?

Drumm McNaughton: Yes, absolutely. It said, the employers view higher education as worth time and investment. That’s right up there. It’s above 70% as well, and for under 40 it’s 78%. You’ve got also employers view the purpose of college and university is more expansive than simply preparing students to enter the workforce.

All employers provide a skilled, educated workforce economy. 94%.

Help students become informed citizens. Also, 94%.

There’s a whole list of these things that are above 90%. Create an environment where students of all backgrounds feel supported, engage with and serve the community they are in. I mean, these are all really important things. It’s not just workforce development, it’s not just public good, it’s all of these kind of things. But then you have to go back and take a look at why people don’t think there’s enough value in higher ed?

[00:49:09] Cost of Higher Education

Drumm McNaughton: I think it boils down to one thing, and you and I were talking about this earlier: cost. It is so expensive now for students to go to higher ed. And even when we were talking about the FAFSA and more people applying for FAFSA, it’s because the economy is not as good. Higher ed costs a lot. Is it worth it? Yes. The studies tell you, “yes it is”. But when you’ve got somebody whose parents may be making $25,000 a year and the one year of college tuition, room board, et cetera, is going to cost $50,000, that gives people a lot of pause.

[00:49:51] Student Loan and Debt Issues

Tom Netting: And when you look at Plus Loans and the changes that have been made to the parental loans, and when you look at the limits that are now placed on it.., And again, I think that all of these are part and parcel to the same collective whole, and as we’ve both discussed, the ability to try and, look, it’s almost like, I hate to go down this bailiwick, but it’s almost like the Affordable Care Act. I mean, there’s so much to this that trying to address one issue bleeds into so many others, and you’ve got to try and get it at the holistic. And yes, I do think that cost and debt continues to heavily drive both ends of the discussion.

Drumm McNaughton: Yes, I think you’re a hundred percent spot on there. Let’s face it, nobody likes to have to spend so much money on something like this, that it’s not a guaranteed return. So I understand where the arguments come for return on investment.

Tom Netting: And that’s again, coming full circle. The FSA form and looking at, quote unquote, the “opportunity cost”, or again, looking at the college scorecard and earnings in relation to the debt and earnings in relationship to the cost, tuition fees, and other things. Again, they’re trying different avenues to get there. What’s the right answer? Again, I still think is yet to be uncovered.

Drumm McNaughton: It is going to come back to civics education. Can we speak to people in a kind, respectful, and I’ll even say it “loving way”, rather than somebody coming out and saying, “well, we just need to shoot them all or get them out of the country”. I mean, it’s just, it’s not respectful and we can’t do this much longer. I’m off my soapbox now.

Tom Netting: Well, it’s a good soapbox to be on. And again, these are all so critical and again, these are the kind of discussions, like we talked about, that need to continue to happen as everybody works towards a solution, and the compromises within those solutions that get us to a new point.

[00:51:52] Technology and AI in Education

Tom Netting: Speaking of new things, technology and AI. Another one of the issues that certainly is being spoken about a lot here in Washington across all sectors, but certainly in higher education as well. Thoughts and views on all of what has happened in technology and AI discussions.

Drumm McNaughton: How many hours do we have?

Tom Netting: It’s your podcast, we can go as long as you want.

Drumm McNaughton: Yes, we can. AI is here to stay. There are more things going on right now with AI than I can even think about. For example, two years ago when AI hit the classroom, faculty were freaking out because all the students are going to be cheating, et cetera. Faculty had to change.

I was doing a podcast the other day and somebody said to me, it’s easier to change the course of history than it is to change a history course. And it was like, of course, AI is here to stay. All the technology requirements, the cyber stuff, it’s here to stay. This is part of the transformation. This is what’s making colleges go crazy and people going to college, we’re trying to teach students how to learn because the jobs that they’re going to be going into in five years or 10 years haven’t even been thought about right now. So how do we do these kind of things that seems so esoteric? But they’re not really, that’s the big challenge.

[00:53:34] NIST Requirements and Compliance

Drumm McNaughton: I know you’ve been talking about the NIST (National Institute of Standards and Technology) requirements that are coming into play for a long time now.

Tom Netting: Now you’re going to me on one of my soap boxes.

Drumm McNaughton: Those scare me.

Tom Netting: Yes. Well, and in a way they should. The reality is that the NIST 800 National Institute of Science and Technology, lest we forget our acronym world, is and has been, a law on the books in the finance world, literally since 2012, 2016, and was going to be implemented, as I’ve shared with your listening audience before, by the Department of Education and all other agencies just before the pandemic hit. Graham Leach Bliley Act is what the responsibility of all institutions of higher education are right now in terms of technology compliance. NIST 800-171 is that on steroids and the ability to implement that is going to take some modification at the institutional level, and I don’t think everybody is quite prepared for it yet.

As we’ve talked about before, and I’ll get off the stump speech real quick, the institutions and in particular your presidents and others, really need to pay as much attention to how NIST and the platforms for your IT and the compliance for that need to be part of your discussions of future planning, just as much as enrollments and the delivery of financial aid and the other support services and structures at any institution. So, thus ended that particular soapbox that you allowed me to go on.

Drumm McNaughton: Yes. Thus ended the lesson. Thank you, Sean Connery. So there’s a couple of other points that we really need to touch on today.

[00:55:19] Enrollment and Inflation

Drumm McNaughton: Enrollment, we’ve talked about enrollment a bit. The stat, from inside higher ed, stat of the day, 3.6%. That’s the rate of inflation for colleges in the 2025 fiscal year according to new data.

Cost is obviously affecting things. The cost college’s pay has risen higher than the cost that consumers pay. I thought that was very interesting. And faculty salaries have gone up at the highest rate in decades, 4.3%. But the challenge is they were down low for a long period of time, so it’s just making up. It’s just like the inflation from earlier in Biden’s administration, the prices were held down during COVID. They had to, they couldn’t sell things, and then as soon as COVID was over, it went through the roof.

Tom Netting: So how do you see that? Again, in the context of those are the data for this year. How do you then compare that with student debt? College cost? The push and pull of interest rates? That, as we talked about at the start of this discussion, Standards & Poor and the economy and where things stand there. Again, peel back the layers for us. Give us your thoughts on this.

[00:56:43] Student Debt and Institutional Responsibility

Drumm McNaughton: Student debt is at $1.8 trillion. You’ve got massive changes to the student loan “industry” with OB3. going to hit every institution, and the thing that scares me is some lawmakers are trying to make the institutions, and the Department’s trying to make institutions responsible for student default when it may or may not be the institution’s fault.

So there’s some major challenges coming on with this. Again, it boils down to cost. We’ve got to do something about costs of higher ed. We have to help people to be able to make their debt payments. There’s been a long period of time, even since COVID where students haven’t had to make payments, now they are. And 65% payers are in delinquency or default. That’s not good.

Tom Netting: As we look at that in that $1.7 trillion portfolio, and right now, 65 to 67% of them in delinquency, when delinquency leads to default, as you so aptly stated.

Drumm McNaughton: Yes.

Tom Netting: It’s going to be a challenge to, as you also noted and as individuals at the Department, including Nicholas Kent that we talked about earlier, and others have noted that if you were in a four year degree and you started just before COVID, you could be nine to 10 years having had your loans and had completing your education, and not have yet had to actually start repayment. So again, one of the issues around student debt, to your point about institutions, bringing this full circle, is it is my hope that everybody recognizes that it’s going to take time and putting potential compliance issues on institutions for restarting and re priming the engine, if you will, need to be phased in. Almost like the default rates I would submit were back when they were established, after the 1989 Omnibus Budget Reconciliation Act. If you recall, default rates, which came about in reconciliation, not a GA started at 40%, dropped at 35 30 and then 25% the threshold we now have over a period of years, because they recognized it was going to take time for the institutions and the collection process to catch up.

I would submit now, as we reprime the engine, that we need to transition as well away from a 25% threshold, because right now there are many institutions with the rates that exceed the one year cap of 40%. And as we just talked about, with 67% of the portfolio in default or delinquency, how in the heck are you going to expect the institutions to be able to turn that proverbial ocean liner on a dime? Pardon the mixed metaphors.

Drumm McNaughton: I love your mixed metaphors. It, it also comes down to, ” why are we spending so much money on education”? It really comes down to that. It’s important. Here’s a pipe dream for you. Finland, their undergraduate degree.

Tom Netting: I actually know where you’re going here, but go with it. Go with it. I’m smiling. I hope people can see the smile through, through the podcast.

Drumm McNaughton: Yes. Finland. Their undergraduate degrees are free. Norway, people, if they’re put out of jobs, laid off or whatnot, the government comes in and trains them for a new job. It doesn’t give them, ” well, we’ll help you with your resume or whatever”. No, it trains them for the new technology. To me, that is the purpose of education. It’s the purpose of the Department of Labor is to help people through these type of things. We shouldn’t have to be paying $80,000 a year for an education, but that’s where we are.

Tom Netting: Amen.

Drumm McNaughton: So last topic.

[01:00:55] Mergers and Closures in Higher Education

Drumm McNaughton: Mergers and closures.

Tom Netting: See cost.

Drumm McNaughton: Yes. See, cost. I think that’s probably the thing for the show notes on this episode, there needs to be an asterisk after every sentence and down at the bottom. See

Tom Netting: See cost.

Drumm McNaughton: We’ve had a lot of closures. You know, There were actually more in 2024 than there were in 2025, 16 to 15. But you know, it’s going to continue to come back to cost. Student demographic cliff, enrollment costs, public perceptions.

Just in the last week, DePaul lays off more than a hundred of their staff. 8% of its full and part-time staff. Martin terminates staff. The main flagship cuts their budgets. It’s not just limited to higher ed, it’s also hitting ed tech as well.

You’ve got institutions who they’re having to cut back programs, so what happens, ed tech, if they’re providing programs, that’s going to happen as well. So it’s not just higher ed cutting back the surrounding territories. I remember reading something earlier in the year that one of the institutions had closed and it impacted 250 different workers from that particular town where the university was. We’ve got to do something about this. I don’t know what it is, but we have to do something.

Tom Netting: I completely agree. And again, showing the cascade or the rippling effect or choose whatever term yet again, you want to there, there is so much to this and it does impact so many different individuals. Again, it’s going to be interesting to see where all of this takes us. See my segue there.

Drumm McNaughton: Oh, I love it. You know and it reminds me of the old Chinese curse. “May you live in interesting times”.

Tom Netting: And yes, we are.

So to that end, as we have now kind of, I think covered the landscape of 2025 and where we sit as we are literally two weeks till the end of this year. Drum roll yet again as I did last year, and I’m going to just call you Nostradamus because of your track record.

Drumm McNaughton: No, not this year. This one’s too hard to predict, but please.

Tom Netting: Understood. But again, you said the same thing last year and yes, while some of this is low hanging fruit in terms of projecting, as we just went through some of the issues, where they are going to come out again, as you have noted throughout the course of this presentation, nobody’s fully sure of. But let’s do a rundown of 2026 on some of the major things we’ve covered, and at least your forecast of where they may end up. And you can hedge, play both sides against the middle on some of these. I’ll give you some deference and latitude because it’s such a hard year.

Drumm McNaughton: I appreciate that. You’re very kind, sir.

Tom Netting: I try.

[01:04:05] Begin Dr. McNaughton’s Prognostications for 2026

Drumm McNaughton: So ask me a question.

Tom Netting: Alright, I’ll start with one of the ones that is omnipresent, the Department of Education.

[01:04:13] 1. Will the Department of Education Exist at the End of 2026?

Tom Netting: We know that there are portions of it that are moving to other entities, as we’ve talked about.

Question: Will the Department of Education still exist at the end of 2026?

Drumm McNaughton: Yes, it will.

[01:04:29] 1 B. What Will It Look LIke?

Tom Netting: Question: What will it look like?

Drumm McNaughton: That I can’t tell you, but it will be much smaller. I think they’re going to find that certain things lend themselves to moving to other departments and others don’t. For example, in Colorado, the governor there wants to merge higher education and labor departments. It’s not a bad idea.

There are certain things, OCR, which I don’t see being able to move out. I don’t see moving accreditation out of the Department. NiCIQI will be there. In what form, I’m not sure. But I do see some things being moved out and instead of it being a “pilot program or a test program”, it’ll become permanent.

The question becomes in 2029, when we get a new administration in there, will it revert back? I don’t know. I don’t know. That’s, I can’t predict what my meal is going to be in two days from now, let alone what’s going to go on in the Department.

[01:05:41] 2. Where Will Student Loans be in 2026? The Department of Education, Private Sector, or the Treasury?

Tom Netting: Let me ask the follow up logical questions. Twofold. Will student loans still be in the Department of Education or will those be marshaled out? And the second part of that question is if they are, will it be to the private sector or to treasury?

Drumm McNaughton: The answer to your first question is, “yes”. They’re going to leave the Department. Whether it’s privatized or not, that I don’t know. My bet is yes, unless you get certain senators who tend to lean a little bit more liberally, raising a huge stink.

[01:06:22] Will Congress Look to Eliminate the Department of Education Through Legislation?

Tom Netting: To the last question on the Department, and then we’ll move on to other issues. We all know that it takes an act of Congress to ultimately eliminate the Department of Education. Yes or no, will Congress look to eliminate the Department of Education through legislation?

Drumm McNaughton: They will look to, but I don’t think they’ll be able to do it. This is not something that I think can or should be done via reconciliation and given the polarization that we have in Congress right now, there’s no way you’ll get 60 votes on a bill to shut down the Department of Education. I don’t think you’d get it.

That’s about as definitive as I can get.

Tom Netting: And I think, and again, I’m not allowed to weigh in, but I think you nailed it. So

Drumm McNaughton: Oh,

you can weigh in. You

Tom Netting: Well, no, these are, I want to leave these two. I want to give you the questions and feed them to you. I want your responses.

Drumm McNaughton: So I can hang myself,

Tom Netting: Now again, I would associate myself with the comments you just made, let’s put it that way.

[01:07:18] What’s the Next Move for Resolving Student Debt?

Tom Netting: Resolving student debt, looking at it from both the institutional perspective and also from the perspective of the students.

Drumm McNaughton: We have got to do something with student debt. What that is, I don’t know. Whether it’s forgive all of the student debt so people can get on with their lives. I mean, think about it, kids coming out of college right now with $20,000 debt. That’s not a big deal except they’ve got to be able to earn the money to pay it back.

Coming out with much higher debt is something else, and it delays them from being able to invest in a home, raise children, all of these things because it’s so bloody expensive nowadays. We’ve got to do something about the debt so kids can get on with their lives. What that is, frankly, I’d like to see the debt forgiven, but I don’t think that will happen.

[01:08:22] Will Limiting the Amortization of Debt Come to Fruition?

Tom Netting: Do you think the middle ground is something that it seems like more and more individuals on both sides of the aisle are coming to, and that’s limiting the amortization of the debt? Because let’s be honest, that’s part of where this all comes to a head, is when payments don’t meet the accrual of the interest on the loans. It’s no surprise you can’t ever get to paying the premium and paying down and paying off the loan.

Drumm McNaughton: Exactly. So why not make every student loan 0%?

Tom Netting: Or a cap on the number of years, which is again, part of what is being discussed.

Drumm McNaughton: Yes, that could potentially work. But if students had 0%, every dollar that they put in counts down. There’s other ways to make up the revenue for that. Quit trying to cut taxes so much. You can do that. Or tariffs or whatever. There’s other ways. You don’t have to cut taxes every time you get a new Congress in there, you ultimately will cut taxes to the point where there won’t be taxes. Then how are you going to pay for things? You have to pay for it one way or another. That’s just typical economics. If you can give these kids a start through 0%, then they’re paying things down and they will get back.

I think you’re spot on with this one, Tom.

Tom Netting: Well, we’ll see. Again, I only can read the tea leaves of the various different legislation and obviously the different regulatory comments, some of which have now become all others are certainly a part of the no negotiations and discussions.

We’ve talked a lot about earnings, we’ve talked a lot about outcomes measures. There are many pieces of legislation out there that talk more about, quote unquote, college transparency for both the consumer’s sake and overall data sharing to make determinations on what direction to go. What do you see in, I’m going to go from 30,000 foot down to the institutional level on this one a little bit.

[01:10:26] Where Will Accountability Frameworks Be Moving in 2026?

Tom Netting: How do you see the future of the accountability frameworks moving into 2026?

Drumm McNaughton: That one is tricky because you’ve got different factions wanting different things. We talked about it a little bit earlier where they want to take things down to a programmatic level. We’re starting to see many states, their legislatures or their Departments of Education saying, you need to get rid of these 10 programs, these 30 programs because they’re not profitable, et cetera. I’ve seen the point where faculty have come to administration and said, ” we’ve only got two students, but we need more faculty members and we can get more students”. I mean, that’s backwards logic. It doesn’t work in today’s day and age.

There’s going to be accountability. We’re starting to see it with the FAFSA application. Whether we can hold colleges or whether we should hold colleges accountable for students getting job. I don’t think we can, unless we, they’ll try, people will try, but I don’t think we can, unless we go in and become almost like a communist state that says, this is what your aptitude is, this is what you have to study. That’s not America, that’s not going to work. We got to figure it out. But no, I don’t think the accountability, the full accountability measures, taking it down to a programmatic level and things like that, I don’t think it’s going to work.

Tom Netting: Again, that’s another one of the ones where it’s in the “wait and see” category. And these negotiations coming up in January will go a long way towards the determinations of how far that goes. Because certainly it’s institutional and programmatic accountability, and as we start to see the data that came out from all of the reporting on GE, gainful employment, and financial value transparency that all schools were required to do at the programmatic level in October, or end of September, beginning of October. It’s going to be interesting to see how that all plays out.

Drumm McNaughton: I’ll be surprised if they allow it to go down to the programmatic level,

Tom Netting: Well, statute requires it, Drumm, for the, the do no harm provision. So again, it’s gonna be coming.

Drumm McNaughton: Well then, it’s going to happen. If the statue’s there and, you go into Negotiated Rulemaking, that’s going to be the starting point. The question is what are the metrics going to be applied?

Tom Netting: And the devil in the details which count. And that’s where again, seeing how this plays out is part of that discussion.

[01:13:05] ‌

Drumm McNaughton: Yes. That’s, one question that’ll go against my 100%

Tom Netting: I don’t; again yet to be determined because it could very well be that over time yet again over time and a year is a long period of time, even though we just talked about how quick 2025 went by, we could also see as the data starts to come out, because again, let’s be honest, data will drive the ultimate decisions on a lot of these as well.

Drumm McNaughton: Yes. We hope so anyway.

Tom Netting: And the data isn’t there yet. There are those that suggest that the data may come back saying that it is the pendulum swinging too far. Others say that maybe this does address cost and the need to “retool”, my word, not others, my word retool, or look at constriction of the number of program offerings within a specific discipline and not as many different degrees within X, Y, or Z.

I don’t want to go down the rabbit hole of six digit CIP codes versus four digit CIP codes. We’ll lose everybody on that one.

Drumm McNaughton: Oh Yes. I don’t even know what CIP code is, but that’s No, I’m joking, of course..

Tom Netting: It’s the distinction, it’s the distinction between the broad and the individual finite programs on associate’s degree, bachelor’s degrees, and everybody else.

Drumm McNaughton: Yes, sure.

Tom Netting: Let me go to another institutional driven one.

[01:14:23] Where Will the Office of Civil Rights and DEI Go in 2026?

Tom Netting: You talked about the Office of Civil Rights, likely staying at the Department of Education as it has in the most recent announcements of what’s going on.

There’s a lot within the Office of Civil Rights, the transgender issues, the antisemitism and the DEI. Where, and again, another hard one for you, and I admit this is a hard one. This is a high curve that you’re going to have to try and hit, carrying it forward. Where do you think all of that goes in 2026?

Drumm McNaughton: I think we are going to continue to have the same kinds of conversations we have had. The applying of decisions coming outta the Supreme Court and saying that this is law. Is DEI dead? No, it’s not. Transgender issues? Again, I go back to respect. It’s like we are all individuals. We are given the Constitution, given certain inalienable rights, et cetera. We also have the independence of thought to be able to say, or should say, “this is not my lifestyle, but this is what you want to do for yourself. Great”. Why should we be legislating this kind of thing? To me, that’s not right.

Having said that, as long as DEI is an issue and it will continue to be an issue for another couple of years, we are going to continue to see movement along those lines. Just like the Department, the government has used antisemitism as a hammer. They’ve also used DEI as a hammer. Something just came out in the news that Trump wants to take funding away from any hospital who does gender transformation. It’s like, so you’re going to potentially kill, and I use the term very deliberately, you’re going to kill patients because one hospital says we are going to continue to do this. That to me seems extreme.

Tom Netting: So the hammer will continue throughout 2026, is what I’m hearing you say.

Drumm McNaughton: Yes, I think so. Unfortunately.

[01:16:46] Will Higher Education See a High Number of Closures in 2026?

Tom Netting: Okay. Higher education in general. Will we see a large number of closures in 2026 vis-a-vis 2024 to 2025, and only a difference of one.

Drumm McNaughton: I think we will continue to see, from a numbers perspective, I don’t think we’re going to see a huge escalation. I think we will see some. I think where we’re going to start seeing things is more in the mergers area. We just received an RFP to help study feasibility of five colleges up in the New England area coming together, sharing backends. I think this is going to be a big thing. I think we’re also going to see, or we should see, I don’t know whether we will, but at the State’s Department of Education, taking a look at the various programs that are being taught and saying, ” you’re in Pittsburgh, there is a lot of industry there, so mechanical engineering, industrial engineering, these kind of things are good programs to have”. Now, maybe in Philadelphia, there are other programs. So instead of having all the programs at all the universities, they start figuring out which ones are the best places to have those universities.

I think that’s going to help with preventing closures, but it’s got to have people talking about these things and doing them. I mean, Dan Greenstein, when he did the merger there at PASSHE these are some of the things they talked about is what are the programs that are the most viable, what areas they should be in, et cetera. I think this needs to be done more in other states just besides Pennsylvania.

Tom Netting: We talked a lot about accreditation throughout the course of this.

[01:18:47] Will There Be a Resolution to the Accreditation Challenges in 2026?

Tom Netting: You appropriately brought up the fact that we will have, and the Department and the Administration has already acknowledged, there will be a Negotiated Rulemaking yet to come in 2026. So we know accreditation and the discussions around accreditation will continue to be at the forefront.

What is your perception of where accreditation lands if it even lands in 2026? So, two part question yet again.

Will there be a resolution to accreditation? Because we’ve talked about all the different layers of new advent of additional accreditors coming in, changes in the accreditation process, changes in the structure of should institutions have to go and seek accreditation every three to five to seven years? The answer to that is hell no. But sorry, editorial comment there, but you know, we’ve got lot going on within accreditation.

What do you think we’ll see in terms of the movement and will there be an end game by the end of 2026?

Drumm McNaughton: There will not be an end game by the end of 2026. It’ll probably be ’27 or ’28, but I think there’s going to be a simplification of the process. I think the regulations will change having to do this. Will there be new accreditors pop up? I think more than likely there will be, especially with the makeup of NACIQI as it is right now.

Does it make sense for institutions to have to spend two years, a year to two years, to get ready for an accreditation visit? Absolutely not. It just adds to the bureaucracy, so we’ve got to find a way to make it simpler. The Department has delegated to the accreditors the determination as to whether an institution has the quality to award federal financial aid, Title IV, this type of thing. I don’t know if that’s going to stay there or not.

It wouldn’t surprise me if that power got taken back to the Department or a different Department within the executive branch to look at that. They’re going to have to, I think, my guess is you’ve got the independent accreditors, which are established by statute, I think I’ve got that, statute versus regulations, the HEA came in said that. You’re going to have that, I think it’s going to get modified that the accreditors may have to submit the accreditation reports to the Department, to say, “yes, they’ll get financial aid or not”.

That makes for a huge bureaucracy to do that. You think we’re backed up with OCR. That’s going to really back things up, especially with, now the Department in the past has had to approve all mergers, changes of accreditors, et cetera, I think a lot of that is going to go away, but I think the quality aspect, I think it’s going to be somewhat balanced between the accreditors and the Department. What it looks like exactly. I don’t know at this point, but it wouldn’t surprise me.

[01:22:10] Will States Be Able to Fulfill the New Administrative Responsibilities in Higher Education?

Tom Netting: Keep in mind the third part of the triad are the states. We have an administration that is heavily focused on returning power, authority, decision making to the states, fill in the right answer depending on what the conversation is. We certainly are seeing in workforce Pell, as I alluded to and we discussed while the advent of workforce Pell and the opportunity to have that be another tool for access, I think is a very good thing. A great deal of those administrative responsibilities, especially on the front end, will reside at the state level.

Drumm McNaughton: Yes.

Tom Netting: Are the states going to be able to fulfill their end of all of these efforts at the higher ed level?

Drumm McNaughton: No, I don’t think so. The challenge is they don’t have the bandwidth now to do what they need to do. And that’s why I say it’s going to end up being the Department looking at quality to some degree.

Tom Netting: And that’s what I’m trying to highlight, Drumm, is again, the triad is you know, is a three-part process and all three of those parts play into recognition for the purposes of Title IV eligibility. They each had their residing roles when the HEA was developed. Certainly we are far afield from the structure of the triad in the way it looked like when it was first developed. Returning to its roots is some of what you may be talking about here, but again, it’s going to be interesting to see how that dynamic as well as so many others all unfold right now.

Drumm McNaughton: Yes, I agree.

Tom Netting: Okay, one last one.

I want you to put your, as you’ve asked me to do before, I want you to put yourself in the shoes of our individuals that are the listeners, the heads of the institutions of higher education.

[01:23:56] What Should Be Top of Mind for Higher Education Presidents and Boards in Preparing for 2026?

Tom Netting: They’re preparing for 2026, what should be top of mind for them to be discussing internal at their institution and helping them prepare for the year ahead?

Drumm McNaughton: 1. Look at your cost structures. I think that is critical.

2. Look at your transparency models. Do you have that webpage that says here’s the price tag, here’s the actual costs that you’re going to pay.
3. Be far more receptive to transfer credits. Right now faculty have got the quote, power to approve or disapprove transfer credits, et cetera. Be more like Franklin University, where it’s all automated. You’ve got articulation agreements with multiple folks.
4. Start taking a look at how you can make your courses more relevant for workforce development. It’s not all or nothing, but you’ve got to be able to make sure that the students have the skills that they need, and that means internships, externships.

Paul Quinn College has got an incredible model where students are actually working, freshmen and sophomore, are working for the college in roles for reduced tuition, and then juniors or seniors are working for their partners outside of the university, Southwest Airlines being one of those, to where the reduced tuition comes in. That’s one way of limiting the costs, not only to yourselves, but for the students as well. You’re also giving them great experience with that.

5. If it comes down to one thing, you’ve got to keep your students first and foremost in mind. Higher ed is a public good, and part of that public good is preparing the folks who are entrusting their future to you, preparing them to live productive lives.

Note, I didn’t say getting that first job, that’s part of it, but it’s productive lives, teaching them those intangible skills, like working in teams, like being able to analyze data, make decisions, critical thinking.

And yes, the civics portion of it, how to disagree civilly with someone. Doesn’t mean you take away their free speech rights. We’ve all got those. But you’ve got to be thinking first and foremost, what is the best thing for your students?

And with that, I am off my soapbox.

Tom Netting: And an excellent way to end. I think that’s the perfect last word.

[01:26:42] Closing Remarks and Acknowledgements

Drumm McNaughton: Well, I want to thank you, Tom, you’ve put me more on a hot seat this year, I think, than you’ve done any other year. I appreciate it. I appreciate all that you bring to higher ed. You’re right there on the front lines with all the policy makers at the Department, the senate, the House, all of those things. I don’t think people realize how involved you are in that, but for those of us who are out here on the front lines, thank you so much for all you do.

Tom Netting: Much appreciated for the kind words, and I know I put you on the hot seat, but it was for a purpose. This is the most dynamic time. Drumm, as you said, I’ve been doing this for, it’s all I’ve known. It’s, I’ve been doing this for over 35 years now, and this is an inflection point that is different than anything we’ve ever seen before. And it’s conversations like this that hopefully help to further the discussions around that coming together to find the right solutions across all of the spectrum.

Drumm McNaughton: Absolutely.

Tom Netting: Thank you for allowing me to be a part of it.

Drumm McNaughton: Thank you for being willing to be part of it. Until next time, my friend,

Tom Netting: Take care.

Drumm McNaughton: You too.

Thanks for listening today and a special thank you to my co-host Tom Netting. Tom, thanks again for doing this with me. It’s always a pleasure, my friend, and I look forward to the next time you’re back on the program with the Washington update.

To my team, Tamara Taylor (showupstrongonline.com) and David White (davidwhitevoice.com). Thank you folks. I couldn’t do all this without you. You make this podcast what it truly is, a really great listening experience for everybody, so thank you.

And to you, my listeners. Thanks again for another great year of giving podcast to you. I’ve thoroughly enjoyed our time together and I look forward to 2026.