In its 2025 Annual Higher Education Outlook, Forvis Mazars details the major themes of financial health, value, and change management, and explores key points from the Forvis Mazars survey and case study takeaways related to how organizations are handling various challenges in today’s higher ed operating environment.
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Financial Health
To begin, our research indicated financial health is predictable and the drivers of it hinge on critical metrics. These include liquidity, wherein an institution includes cash available as a key component and margin generation that adds to liquidity in most years. Next is revenue diversification, which can be influenced significantly by endowment capacity compared to budget size and academic programs. Finally, there is enrollment – typically, a “safe” enrollment range begins at about 2,800 to 3,200 students with a reasonable percentage of athletes of about 20 to 25%. However, key performance indicators (KIPs) vary based on sector, endowment, and revenue diversification.
The key points of financial health concern the need for long-term financial health, which is greater than ever, and how schools can predict success or failure based on a few measurements. Our data showed that there are significant plans to reduce staff and eliminate programs at the schools surveyed. These measures may serve as a short-term fix for financial support, but they are not long-term solutions.
To that end, there are seven data points in the survey (sampled from 40 schools) that serve as evidence of the difference between success or failure of schools. These are enrollment, net tuition per student, operational margin, total return on net assets, restricted endowment as a percentage of an expense, the primary reserve (CFI component), and the number of athletes as a percentage of the student population.
Case Study: Benedictine College
The Outlook focused on Benedictine College in Atchison, Kansas, through an extensive interview with the college’s financial leadership. The private, nonprofit institution enrolled 2,250 students for the year studied, and the interview shined light on the behaviors leading to the success of the institution. Namely, the school boasted good financial measurement discipline, especially in its benchmarking and financial metrics. The college also stayed true to its mission focus and placed attention on market awareness, which led to several program adjustments.
Value
Our findings unearthed two distinct observations related to enhancing value. First, confidence in the value brought by the industry as a whole is declining, even though there is a clear earnings benefit to college and a clear case that a college education is associated with well-roundedness. Second, it is also clear that many institutions do not know how to articulate these outcomes to prospective students and their families. Our survey results indicated that while most institutions think they are affordable, they do not identify student outcomes as a differentiator. Perhaps more importantly, institutions may not have a good understanding of their own value proposition, as they don’t track it or follow it through with their graduates. The issue of institutional and programmatic value proposition will be increasingly important as federal funding scrutiny grows.
Case Study: Texas Christian University (TCU)
Texas Christian University (TCU) was the subject of our value case study. TCU has a storied history of a solid student experience supported by its 302-acre campus in Fort Worth, Texas. The private, nonprofit institution enrolled 12,785 students at the time of our study. Their goals of becoming an R1 research institute and enhancing their athletic standing (through athletic program success in the Power 4 Conference) brought them success in creating value for students. Notably, TCU has a clear understanding that its primary value proposition is a small-college atmosphere combined with Power 4 sports programs.
Change Management
The third theme, change management, revealed itself to be more difficult in higher ed than in other industries. Survey data showed the top two barriers to change are fear, anxiety, and stress about what change will bring to the institution, and a lack of resources to navigate change.
Change in higher education is complex and requires clear vision, courage, and the ability to convince key constituencies of the need for change. This is a challenge, as many constituencies are inclined to want to maintain the status quo at their respective institution. In addition, most institutions do not have a clear change management philosophy driving their initiatives, further compromising their ability to take quick, effective action. Understanding how these processes affect the higher ed environment can help provide context that begins a conversation on change.
Case Study: Concord University
Our final case study centered on Concord University in Athens, West Virginia. As a small public institution with 1,956 students during the time of our study, Concord was successful in recently navigating change. Its leaders were courageous and worked with their teams to solve difficult problems and create a positive change environment that encouraged openness to new ideas and trust in others. Concord’s leadership team provides some clear guidance on how to approach difficult conversations.
Learn More in Our Full Report
For more key takeaways and analysis, download your complimentary copy of the Higher Education Outlook by completing the form below. Join us for an informative webinar on April 30 as two institutional leaders join us live to share their perspectives on themes covered in the Outlook.