If you are preparing for a 2026 strategic planning cycle, this post is written to be used, not skimmed. It translates 2025 conditions into the board-level decisions, thresholds, and oversight questions that keep a plan executable when conditions shift. This briefing is designed to convert what you already know happened in 2025 into the decisions that protect execution in 2026 and beyond.
Most higher education leaders do not need another recap of 2025. You lived it. The practical problem entering 2026 is how to convert a volatile policy environment, cost pressure, enrollment uncertainty, and accountability changes into decisions that protect the institution, preserve mission, and keep options open.
This is the shift. 2026 planning cannot be built on stable assumptions. It has to be built on decision gates, credible contingencies, and the discipline to separate noise from what concretely alters outcomes.
Quick Overview
- Build 2026 plans assuming policy volatility as an operating constraint, not a background condition, and include decision gates and contingencies rather than locking a single plan.
- Treat international enrollment as a risk-managed portfolio if a meaningful share of tuition revenue depends on a few countries; the 75-country restriction expansion forces diversification, pricing strategy changes, and a hard look at capacity and staffing tied to international headcount.
- Include research funding exposure on the board risk register. If federal leverage can disrupt awards, institutions need scenario budgets, bridge-funding rules, and criteria for which projects are protected when dollars move.
- Make accreditation strategy a governance issue, not a compliance calendar. NACIQI dynamics and new accreditors increase the risk of surprise requirements and timeline disruptions that can derail multi-year initiatives.
- Stop assuming states can absorb federal responsibility shifts cleanly. Uneven state execution becomes a strategic planning variable, especially for Workforce Pell and related oversight.
- Workforce Pell turns outcomes tracking into eligibility. The 70% completion and 70% placement guardrails force institutions to define measurement metrics, data ownership, and whether current programs can meet thresholds without gaming the numbers.
- FAFSA earnings warnings change the enrollment funnel. If institution-level warnings are live now, program-level flags are a plausible next step. Plan for reputational impact, yield impact, and program redesign decisions.
- Student loan delinquency and default risk is moving from borrower problem to institutional accountability pressure. Expect scrutiny of program ROI claims, placement reporting, and potential liability mechanisms.
- Cost containment must be paired with price transparency, or it will not restore trust – separate structural cost actions from how you explain net price and cost-to-complete.
- Closures, shared services, and consolidation are no longer edge cases. Boards should define thresholds that trigger merger exploration, shared services, or program rationalization before the institution is in crisis.
- AI and cybersecurity now sit in the same category as enrollment and financial aid operations. NIST-aligned readiness affects procurement, audit exposure, and incident response that directly touch reputation and continuity.
- The strategic question for 2026 is mission alignment under constraint. Institutions will be forced to decide what they will do exceptionally well, what they will stop doing, and how they will prove value without reducing education to a single metric.
The Necessary Destruction Before Renewal
In early 2020, Dr. Drumm McNaughton, CEO of The Change Leader and host of the podcast Changing Higher Ed, spoke with Gordon Gee, then president of West Virginia University. Gee’s view at the time was that COVID would accelerate necessary change in higher education by a decade or more. That statement reads less like a prediction now and more like a description of what leadership teams have been living through.
McNaughton has used an image from Hindu mythology of “Shiva dancing” to frame the moment. When a system has deferred hard choices for too long, meaningful change requires dismantling what once worked so something more durable can take its place. That is not abstract. It is the lived reality of institutions facing cost inflation, policy shocks, demographic pressure, and a public confidence gap.
Context matters. The Higher Education Act was last reauthorized in 2008, with original authorization in 1965. Student debt is now above $1.8 trillion. Over 135 colleges and universities have closed or merged since 2016, not including thousands of for-profit institutions that were shuttered.
What this means for decision-making
- Boards should stop treating disruption as episodic. It is structural. Strategic plans should assume repeated shocks and be designed for resilience.
- If your plan depends on stable federal posture, stable aid rules, or stable accreditor behavior, it is not a plan. It is a hope.
- The leadership burden in 2026 is not predicting the future correctly. It is building an institution that can adapt quickly without breaking trust or deviating from its mission.
Higher Education Financial Outlook for 2026
Credit agencies continue their negative outlooks from 2025 for the sector, citing federal policy shifts, rising costs, and increased competition for students. The Higher Education Price Index posted one of its worst performances since 2008. Expenses continue to outpace revenues.
FAFSA filings rose compared to the prior year, but that increase should not be taken at face value as demand strength. A more operationally useful interpretation is that FAFSA normalization is occurring after a disrupted period and that more families are showing need. That changes the yield equation, discount strategy, and the institution’s exposure to aid and pricing narratives.
What this means for decision-making
- Require a board-level margin narrative. Where is margin truly made and lost by program, modality, and student segment?
- Treat discounting and aid strategy as strategic levers, not tactical admissions tools. The wrong discount strategy becomes a multi-year structural problem.
- Make cost actions explicit and staged. Do not bury them in broad language. Tie them to measurable outcomes and student experience protections.
- If enrollment volatility is rising, build in scenario budgeting, not a single-point forecast. Tie spending triggers to actual enrollment performance.
International Student Visa Restrictions and Enrollment Risk
Visa restrictions and travel bans have expanded to 75 countries, including Nigeria, one of the top 10 source countries for international students. International enrollment is not simply a tuition line. It is research capacity, teaching talent, campus diversity, and global positioning. And the trend does not look good – for 2025-2026 enrollment, international enrollment fell by 5,000 students, and that was before Visa restrictions were put in place and/or expanded.
At the same time, universities in other countries, including China, continue to climb in global stature. Students who once defaulted to the United States as the global standard are increasingly choosing credible alternatives that are less expensive and less politically fraught.
Perception has shifted as well. Many prospective students now view the U.S. as more volatile and less welcoming – high-profile incidents of campus violence, including shootings at MIT and Brown University, compound that perception.
What this means for decision-making
- If international tuition is material, you must treat it like concentration risk. Identify which countries and which programs carry exposure.
- Align your recruiting strategy to policy reality. That may mean diversifying source countries, changing the program mix you promote internationally, or adjusting intake expectations.
- Stress-test housing, staffing, and program capacity that assumes stable international headcount.
- Revisit reputational risk planning. Safety and campus climate narratives now affect enrollment in ways leadership cannot ignore.
Federal Leverage, Research Funding, and Political Weaponization
A defining feature of 2025 was the increased politicization of higher education and the use of federal funding and enforcement as leverage. Research funding has been threatened or withdrawn from institutions including Harvard, Columbia, and UCLA. These are not symbolic dollars. They underwrite medical research, laboratories, graduate education, and core institutional prestige.
Our critique is straightforward. When cuts are made without precision, using an unsharpened ax rather than a scalpel, the damage is broader than the intended target.
Tom Netting, CEO of TEN Government Strategies, frames the mechanism as Washington “leverage.” Institutions become tied to those funds, and only when the dollars are threatened do institutions respond.
ProPublica reported allegations that the Department of Justice pressured lawyers to reach a predetermined conclusion that UCLA tolerated antisemitism – another form of leverage. Whatever one’s view of the underlying issues, predetermined enforcement outcomes are the opposite of due process and create risk for every institution that relies on fair adjudication.
What this means for decision-making
- Put federal funding exposure where it belongs: on the risk register with governance oversight.
- Define bridge funding rules now, not in crisis. What gets protected, what gets paused, what gets wound down.
- Review institutional posture on compliance and investigations. If enforcement becomes politicized, your documentation, governance discipline, and decision trail matter more than ever.
- Ensure the board can articulate the value of research in institutional terms. If leaders cannot explain what is at stake, they will not defend it effectively.
Accreditation Reform, NACIQI, and New Accreditors
Accreditation moved further into the political arena. NACIQI became a focal point when the Department delayed its summer meeting, widely interpreted as a move to change committee composition before major accreditor reviews.
The December NACIQI meeting reviewed three major regional accreditors with direct connections to targeted institutions: the New England Commission of Higher Education, which accredits Harvard; the Middle States Commission on Higher Education, which accredits Columbia; and the WASC Senior College and University Commission, which accredits UCLA. All received their renewal, but there were a few fireworks that portend the future of what was supposed to be a non-political body.
New accreditors are also emerging. The Commission for Public Higher Education is a joint venture among Florida, South Carolina, North Carolina, Georgia, Tennessee, and Texas. The National Association for Academic Excellence has connections to the formerly troubled ACICS. The risk is not that new accreditors exist. The risk is why they exist and what standards they apply.
Nicholas Kent, undersecretary of education, has stated an intent to push outcomes emphasis in accreditation. Outcomes matter. Process matters because it produces outcomes. Efforts to simplify that become dangerous when simplification turns into hollowing out.
Florida now requires institutions to change accreditors annually as a reaction to perceived bias. (North Carolina had also voted to do that, but they recently reversed that requirement.) That may satisfy a political objective, but it creates quality assurance churn and institutional instability.
What this means for decision-making
- Treat accreditation as strategic risk, not calendar compliance. Map what accreditation disruption would do to enrollment, aid eligibility, and strategic initiatives.
- Tighten governance around accreditation posture. Who owns the strategy, what is the board’s oversight lens, and what are the non-negotiables?
- If the state pushes accreditor rotation, quantify the operational and reputational costs now. Do not wait until you are forced into it.
- Prepare for outcomes measurement pressure to expand. If your institution cannot defend outcomes credibly, accreditation reform becomes a direct threat.
Department of Education Restructuring and State Capacity
The Department of Education continued restructuring, shifting responsibilities to other agencies. Student aid functions moved toward the Department of Labor or Treasury. The Office of Career, Technical, and Adult Education shifted in scope. The Department also called staff back to the Office for Civil Rights to address complaint backlogs after aggressive reductions, a clear example of what happens when structural change outruns operational need.
The president has pledged to eliminate the Department of Education. Complete elimination would require Congressional approval. Even without full elimination, continued redistribution and downsizing continue to alter oversight dynamics.
Shifting responsibilities to states raises a practical constraint. Capacity varies widely. In many cases, responsibility moves faster than staffing, budget, and expertise, producing uneven execution and unpredictable requirements.
What this means for decision-making
- Stop building plans that assume uniform oversight behavior. If states become the gatekeepers for key approvals, expect variance and delay.
- Build compliance readiness that can withstand uneven enforcement. Your institution should not rely on ambiguity to survive.
- If oversight shifts, the practical question is who you have to persuade. Update government relations posture accordingly.
Workforce Pell, Short-Term Credentials, and the 70% Guardrails
Workforce Pell expanded Pell eligibility to shorter-term programs tied to in-demand occupations. The strategic opportunity is obvious. The strategic risk is operationalization.
Much of the responsibility sits with governors and state boards, which must approve eligible programs and ensure quality. Workforce Pell includes guardrails designed to prevent past abuses. The headline operational change is the introduction of eligibility-linked outcomes thresholds, including 70% completion and 70% placement.
These are new computations for much of traditional academia. They have not been forced to prove them as eligibility criteria.
Quality assurance remains unsettled. Who decides what counts as value? How outcomes are measured. How institutions avoid creating credentials that satisfy a short-term demand narrative but fail students.
Regional accreditors, including the Higher Learning Commission, NECHE, and WSCUC, have begun accrediting certification programs. That signals direction, not stability.
What this means for decision-making
- Decide whether your institution will participate in Workforce Pell and why. Do not drift into it because others are – does it align with your institution’s mission should be the driving criteria.
- If you participate, build an outcomes measurement system that can withstand scrutiny. Define placement, define completion, define data sources, and define ownership.
- Treat state approval dynamics as part of program strategy. What states will approve is now a planning variable.
- Prepare for reputational risk. Workforce credentials will be scrutinized for value, and institutions will be judged by outcomes, not intent.
Student Debt, Defaults, and Accountability Proposals
Student debt is above $1.8 trillion, and roughly 65% of borrowers are in delinquency or default. The payment pause reset the system in ways that have not been fully absorbed yet. Some borrowers who started degrees just before COVID could now be 9 to 10 years post-graduation without having made a single payment.
Policy discussions are moving beyond borrower responsibility toward institutional accountability. Some lawmakers want institutions to bear financial responsibility for defaults, even when defaults are influenced by labor markets and household conditions.
The Department of Education introduced FAFSA warnings when students show interest in institutions whose graduates earn less than high school graduates. About 23% of institutions trigger this today. The logical direction is program-level warnings. And according to Inside Higher Ed, “about 6 percent of all programs would fail the new combined earnings test, including about 29 percent of undergraduate certificates, according to Education Department data.”
Netting’s comparison to the 1989 Omnibus Budget Reconciliation Act matters because it shows how accountability thresholds have been phased in historically. Default-rate thresholds were lowered over time to allow institutions and collection systems to adjust. If accountability accelerates without transition, disruption will be widespread.
McNaughton’s comparison to Finland and Norway underscores the larger point. Countries make different choices about what education is for and who bears the cost. Those comparisons clarify that the U.S. is making policy choices, not responding to natural law.
What this means for decision-making
- Assume scrutiny will migrate to program-level outcomes. Begin now by identifying programs that are most exposed to earnings narratives.
- Strengthen documentation and integrity in placement and outcomes reporting. If you cannot defend your data, you will lose the argument.
- Build an institutional position on accountability that is defensible. If you wait to react, you will be defined by others.
- Prepare for reputation and yield effects from FAFSA warnings. Enrollment is shaped by perception long before it is shaped by completion.
Higher Education Cost Crisis and Price Transparency
Cost remains the dominant issue hurting higher education institution enrollment and public perception. When families making $25,000 face costs of $50,000 per year, the argument about long-term value often loses out to the immediate impossibility of payment.
Yes, college graduates typically earn more over their lifetimes. That does not neutralize the cash-flow problem families face today.
The Higher Education Price Index performance reinforces the reality that costs have not stabilized. Faculty salaries rose 4.3%, the highest increase in decades, in part catch-up after stagnation and in part inflation dynamics.
What this means for decision-making
- Separate cost strategy from communications strategy. Cutting costs without explaining net price does not restore trust.
- Require cost-to-complete thinking. Families react to total cost, not annual price, and they react to uncertainty even more than price. Price guarantees should help in this respect.
- Make program economics visible internally. Cross-subsidies may be necessary, but they should be conscious decisions, not accidents.
- Tie affordability strategy to retention and completion. Price is not just an entry issue. It is a persistence issue.
Employer Confidence, Civic Learning, and Public Skepticism
AAC&U survey data provides a useful counterweight to the dominant public narrative. 70% of employers express confidence in higher education and view degrees as worthwhile investments. Among employers under 40, confidence is 74%. Among employers over 50, 56% still express confidence.
Employers also hold a broader view of purpose. 94% agree that higher education should help students become informed citizens, with a similar emphasis on inclusive environments and local community engagement.
This exists alongside declining public confidence, especially among older adults. That gap is not a messaging flaw alone. It is a trust and legitimacy problem.
McNaughton’s emphasis on civic discourse is not ornamental. The ability to debate both sides and engage those you disagree with is now a workforce skill and a governance skill.
What this means for decision-making
- Align institutional value claims with what employers say they value, including civic learning and constructive discourse.
- Treat trust rebuilding as a strategic initiative with governance ownership, not a marketing campaign.
- Consider whether your curriculum and student experience actually teach the skills employers assume you teach. If not, fix the gap.
AI, Technology, and Institutional Risk Management
AI accelerated change in teaching, assessment, and academic integrity. Many faculty are moving from resistance to redesign, adjusting assignments and evaluation to reflect the reality that AI tools exist.
Presidents and boards need to pay as much attention to NIST and IT compliance as they do to enrollment, financial aid delivery, and student support. Cybersecurity and compliance failures are not IT failures. They are institutional failures.
What this means for decision-making
- Establish governance oversight for AI policy, academic integrity redesign, and cybersecurity readiness.
- Require a clear view of NIST-aligned maturity for the institution. If you cannot explain your current posture, you cannot defend it after an incident.
- Treat vendor procurement as risk management. Many institutional exposures arrive through third parties.
Closures, Mergers, Shared Services, and Community Impact
Closures and consolidation continue. In 2025, closures were roughly comparable to 2024, 15 versus 16, but the more significant story is the widening set of institutions and businesses cutting staff and budgets.
DePaul laid off more than 100 staff members, about 8% of its workforce. Martin University terminated staff. The University of Maine flagship campus cut budgets. Ed-tech companies serving institutions also reduced headcount as campus spending tightened.
The community impact is real. When an institution closes, it is not just a campus issue. In one example, 250 workers in the surrounding community were impacted.
Institutions are also exploring shared services instead of full mergers. One example is an RFP studying whether five R1 New England universities could share back-end operations. States are exploring program rationalization so that not every institution offers every program.
PASSHE’s consolidation under Dan Greenstein remains a reference point for what coordinated, strategic consolidation can do when governance has stamina.
What this means for decision-making
- Boards should define thresholds that trigger exploration of shared services, strategic alliances, or merger pathways—waiting until a crisis removes choice.
- Treat consolidation as a strategy option, not a failure label. The failure is waiting until options are gone.
- Build a community impact plan if closure or major reduction is possible. Reputational damage often comes from how decisions are executed, not only the decision itself.
The Purpose of Higher Education in 2026 Decision-Making
Under the policy conflict and financial pressure is the question leaders keep being forced to answer, often under hostile framing. What is higher education for?
The answer is not either-or. It is workforce development and civic development. It is economic mobility and knowledge advancement. It is credentialing and transformation.
McNaughton’s point is consistent with employer data. Employers view higher education as worth the time and investment and as more expansive than job preparation alone.
The leadership challenge is proving value without flattening education into a single metric.
What this means for decision-making
- Strategic planning must define what the institution will prioritize and how it will measure success without betraying its mission.
- If leaders cannot articulate purpose in concrete terms, policy actors will define purpose for them.
- Purpose should show up in budgeting, program mix, student support, and outcomes definitions, not only in messaging.
2026 Policy Outlook and Operating Predictions
Looking ahead to 2026, several trajectories appear likely.
The Department of Education may survive in a smaller form. Certain functions, such as the Office for Civil Rights, do not transfer cleanly. NACIQI is likely to remain, even if reshaped.
Student loans may be privatized or transferred to another department, though the mechanism remains uncertain. Political objections will occur, but momentum toward shifting loan servicing away from current structures appears strong.
Accreditation may simplify, but not resolve, in 2026. The broader reset could extend into 2027 or 2028. New accreditors will continue emerging. Federal posture toward accreditor autonomy may shift.
Student debt will remain central. Discussions about forgiveness, interest rate caps, and amortization limits will continue. A 0% interest rate on student loans would ensure every dollar reduces principal, though that outcome appears unlikely. Restructuring pressure remains, given the scale and delinquency levels.
Accountability is likely to push toward program-level assessment. That will strain institutional capacity and intensify disputes about fair measurement.
The Office for Civil Rights remains politically exposed, with DEI and transgender issues continuing as leverage points. Courts will shape boundaries.
Closures and consolidations will continue. Shared services and state-level rationalization will expand.
States will struggle with new responsibilities pushed down from the federal level, particularly for Workforce Pell approvals and oversight.
What this means for decision-making
- Build strategies that do not require regulatory stability to succeed.
- Assume program-level outcomes scrutiny will expand and prepare now with honest data and defensible narratives.
- Treat accreditation and federal funding as strategic dependencies with contingency planning, not background compliance.
Board Questions for 2026
These are questions boards should press management teams to answer clearly, with evidence, not reassurance.
- Where are our most significant margin pressures for FY2026, and what cost actions are feasible without degrading student outcomes?
- How exposed are we to international enrollment disruption from the 75-country visa and travel ban expansion, and what are our realistic replacement strategies?
- Which revenue lines depend on federally influenced research funding, and what is our contingency plan if those dollars become a political lever?
- How are we positioning for accreditation volatility, including NACIQI timing and the emergence of new accreditors?
- If our state pushes annual accreditor changes, what institutional risk does that create, and how do we protect quality assurance and continuity?
- What does Workforce Pell readiness look like in our context, and can we document 70% completion and 70% placement in the areas where we intend to participate?
- Are we prepared for program-level accountability signals, including FAFSA warnings and downstream policy changes tied to earnings outcomes?
- What is our position on transfer-credit friction points, and how do we measure whether our practices serve student mobility?
- What is the board’s oversight model for AI adoption, cybersecurity, and NIST-aligned compliance planning?
- If closures, layoffs, or consolidations become necessary, what decision thresholds will we use, and how will we manage community impact and reputational risk?
Recommendations for Institutional Leaders
For presidents and boards preparing for 2026, five actions stand out.
First, scrutinize cost structures with discipline. Institutions must reduce costs while protecting the student experience and outcomes.
Second, improve transparency—clearly separate the sticker price from the net price and the cost-to-complete. Opacity increases skepticism and makes enrollment decisions harder.
Third, remove unnecessary transfer friction. Transfer policy should serve students and completion, not institutional convenience. Franklin University’s automated articulation model is a useful reference point for where this is headed.
Fourth, strengthen workforce relevance without abandoning broader outcomes. Robust internships and externships matter. Paul Quinn College’s model, where early students work for reduced tuition, and later students work with partners such as Southwest Airlines, is an example of designing cost relief and employability into the model.
Fifth, keep students first. Higher education is a public good. That public good includes preparation for productive lives, civic participation, ethical reasoning, teamwork, and the ability to disagree constructively while respecting rights and dignity.
The Path Forward
2025 made it clear that higher education is not returning to a stable, predictable environment. Financial pressure, enrollment volatility, policy leverage, immigration restrictions, accountability changes, and public skepticism are reinforcing forces.
There is also durable value. Employers still value degrees and civic learning outcomes. Students still seek transformation and mobility. Innovation is occurring in real time.
The practical test of 2026 is whether institutions can adapt quickly and credibly, reduce costs without hollowing out mission, and prove value without reducing education to a single metric. The choices made in the next year will shape institutional trajectories for decades.
Resources
Downloads
Board-Level Briefing for 2026 Strategic Planning →
Board Chair Framing Memo for 2026 Planning Session →
Retreat Agenda Mapping for 2026 Strategic Planning →
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