As we step into 2026, higher education finds itself at a pivotal juncture, shaped by demographic shifts, technological advancements, and societal influences. This summary of our recent webinar with Marjorie Hass, President of the Council of Independent Colleges, explores the operating environment of 2026, the challenges facing higher education, and the opportunities for institutions to thrive in the current landscape.
How Will 2026 Differ From Other Moments in Higher Education?
The 2026 operating environment is both a continuation of historical trends and a departure from past norms. Today, higher education faces a uniquely multifaceted set of circumstances:
- Demographic Shifts: The so-called “demographic cliff” has been a concern for years. While the decline in traditional college-age students may be more gradual than initially feared, it is undeniable. Institutions have responded by diversifying their offerings, such as graduate programs, adult education, and certificates, to attract non-traditional learners. This shift reflects a broader need to adapt to a changing student population.
- Artificial Intelligence (AI): The rapid adoption of AI is reshaping both pedagogy and operations. Unlike previous technological disruptions, AI’s pace of change has caught many institutions off guard. From classroom applications to back-office efficiencies, AI is causing higher education to rethink its role in a digital culture.
- Skepticism & Political Interference: Public trust in higher education is at its lowest in a decade, fueled by questions about affordability and value. In addition, the politicization of higher education has created uncertainty in federal policy, with decisions increasingly made through direct White House deals rather than traditional legislative processes.
What Are the Primary Challenges Facing Higher Ed in 2026?
The challenges confronting higher education are as complex as the environment itself:
- Financial Challenges: Many institutions have exhausted or are working hard to implement traditional cost-cutting measures, including through a review of their academic programs. Institutions are now grappling with deeper questions about sustainability. Revenue diversification is critical, as reliance on tuition and endowments alone is no longer sufficient. Deferred maintenance and endowment management also remain pressing concerns.
- The Value Proposition: Public skepticism about the value of a college degree is growing, driven by rising costs and a labor market increasingly focused on skills-based hiring. Institutions must find new ways to demonstrate the tangible outcomes of their programs.
- Technological Disruption: Beyond AI, the shift toward hybrid and flexible learning models continues to challenge institutions, particularly those that only adopted these models during the pandemic. Staying relevant in a fast-evolving digital landscape is a struggle.
- Cultural & Social Issues: Federal and state political pressures, coupled with new considerations for international students, are impacting enrollment and creating an unpredictable environment for policy planning. Institutions must navigate these circumstances while maintaining their mission and values.
Areas of Opportunity for Institutions
Despite these challenges, 2026 offers significant opportunities for institutions willing to innovate and adapt:
- Strategic Partnerships & Mergers: Collaboration is key. Strategic partnerships, whether with other institutions or external organizations, can help reduce costs, share resources, and enhance offerings. These partnerships don’t have to be local or regional; they can be national or even global.
- Influence & Advocacy: Higher education must assert its role as a societal good, advocating for policies that support access and affordability. Building relationships at the local, state, and federal levels is essential for shaping the future of the sector.
- Community Relationships: Institutions that strengthen ties with their local communities can build trust and demonstrate their value. Highlighting the contributions of students and alumni to local economies and societies can help counteract skepticism.
- Differentiation: In a crowded marketplace, institutions must clearly articulate their unique value propositions. Whether through mission-driven initiatives, innovative programs, or a focus on holistic student development, differentiation is critical for attracting students and donors.
How Forvis Mazars Can Help
Higher education in 2026 is at a crossroads, facing both challenges and opportunities. By embracing innovation, fostering collaboration, and reaffirming their societal value, institutions can navigate this complex landscape and emerge stronger.
Forvis Mazars is here to assist you and your higher education institution. Our consultants bring meaningful industry experience and perspective from the faculty to the finance office. Dive deeper into the conversation by watching our archived webinar, “Higher Education Outlook: 2026 & Beyond,” and download your own copy of our 2026 Annual Higher Education Outlook.