{"id":79087,"date":"2025-12-04T01:44:48","date_gmt":"2025-12-04T06:44:48","guid":{"rendered":"https:\/\/world.edu\/?p=79087"},"modified":"2025-12-04T01:44:48","modified_gmt":"2025-12-04T06:44:48","slug":"federal-funding-cuts-are-only-one-problem-facing-americas-colleges-and-universities","status":"publish","type":"post","link":"https:\/\/world.edu\/federal-funding-cuts-are-only-one-problem-facing-americas-colleges-and-universities\/","title":{"rendered":"Federal funding cuts are only one problem facing America\u2019s colleges and universities"},"content":{"rendered":"

\"\"<\/p>\n

Higher education is under stress. The highest-profile threat has been the Trump administration\u2019s efforts to cut funding to\u00a0several universities<\/a>,\u00a0including Harvard<\/a>,\u00a0Columbia and<\/a>\u00a0Northwestern<\/a>.<\/p>\n

Research universities heavily depend on federal money to conduct research and carry out other areas of work. For example, after tuition, federal money allocated\u00a0for research<\/a>\u00a0made up 40% of the total revenue for two major research\u00a0universities \u2013 Johns Hopkins University and Massachusetts Institute of Technology<\/a>\u00a0\u2013 in the 2022-23 academic year.<\/p>\n

Since January 2025, the\u00a0Trump administration has terminated various federal grants<\/a>\u00a0for universities valued between US$6.9 billion and $8.2 billion.<\/p>\n

While there\u2019s been a lot of public attention to the federal government\u2019s financial pressure on universities, universities have been experiencing financial pressure from other sources.<\/p>\n

Understanding that is key for applicants and parents to understand their bargaining position when choosing whether and where to pursue a college degree.<\/p>\n

As scholars of\u00a0public administration<\/a>\u00a0and economics and\u00a0former university administrators<\/a>, we think parents and college applicants need to understand this economic landscape to make smart choices about making such a major investment. Here are four key things to know.<\/p>\n

1. Universities are an industry<\/strong><\/h4>\n

Most American private colleges and universities are nonprofits, but they still care about revenue. These schools aren\u2019t responsible to shareholders, but they may respond to pressure from alumni, students, employees, donors, boards, the federal government and, if the schools are public universities, state governments.<\/p>\n

And like businesses, nonprofit colleges and universities need money. As a result, despite what you might think,\u00a0most colleges<\/a>\u00a0are not particularly selective. Though they don\u2019t advertise that fact, hundreds of schools will take any student who meets minimal academic requirements and can pay tuition.<\/p>\n

The added cost of teaching additional students is minimal when there are empty seats, so admitting more students can lead to an increase in revenue for most schools.<\/p>\n

This is important because colleges\u2019 costs \u2013 largely staff salaries and building maintenance \u2013 are hard to cut and are mostly fixed. Those costs must be spread across fewer students when there are unfilled seats.<\/p>\n

As the number of people\u00a0who go to college is declining<\/a>, colleges need to respond to people\u2019s skepticism about the value of degrees \u2013 but change is difficult<\/p>\n

Becoming a smaller school is challenging. If students show less interest in foreign language study and more interest in data science classes, the school cannot have a German language professor suddenly teach data science.<\/p>\n

As a result, colleges can become stuck with faculty who teach course students don\u2019t want to take.<\/p>\n

Unlike business leaders, who may be rewarded for fixing a failing company by laying off workers, university leaders who eliminate faculty positions become unpopular among their peers. This can reduce their chance to advance their careers at their current universities or switch to a new school.<\/p>\n

2. Schools have to work to admit students<\/strong><\/h4>\n

Colleges\u00a0enrolled 8.4% fewer students<\/a>\u00a0in 2024 than when attendance peaked at 21 million in 2010. As a result, schools must increasingly compete harder to attract students.<\/p>\n

One way is to offer a better price, meaning lower tuition. Like most elite schools, Harvard has a listed price of\u00a0about $60,000<\/a>\u00a0for tuition alone in one academic year \u2013 and nearly $87,000 when food, housing and other services are included.\u00a0Few students actually pay that<\/a>\u00a0amount, though the exact percentage getting a discount is not public information.<\/p>\n

The average net price a Harvard student paid in 2023-24 was\u00a0$17,900, as colleges<\/a>\u00a0offered either financial aid, straight-up discounts or scholarships.<\/p>\n

Most schools<\/a>\u00a0engage in this\u00a0sort of price discrimination<\/a>, the term economists use to describe charging different prices to different customers based on their willingness to pay. In some ways, this is much like airlines selling seats on the same flights at different prices.<\/p>\n

3. Schools have a declining foreign customer base<\/strong><\/h4>\n

Another enrollment remedy<\/a>\u00a0for colleges and universities to boost tuition revenue has been focusing on admitting international students, who\u00a0typically pay full<\/a>\u00a0price.<\/p>\n

One-fourth of all\u00a0international students<\/a>\u00a0in the U.S. come from China, while another\u00a0quarter come from India<\/a>.<\/p>\n

Most schools have not pursued this strategy of expanding foreign enrollment as aggressively as\u00a0Columbia University<\/a>, where international students approach\u00a040% of the student body<\/a>.<\/p>\n

By comparison,\u00a0international undergraduate students made up<\/a>\u00a06% of Columbia\u2019s undergraduate student population in 2000, and 12% in 2011.<\/p>\n

But the revenue that international students generate is not a guarantee. Foreign student enrollment declined\u00a017% from fall of 2024 to 2025<\/a>.<\/p>\n

In part, that\u2019s because of some students\u2019\u00a0inability to get a visa<\/a>\u00a0or fear their authorization to study in the U.S.\u00a0will be revoked<\/a>.<\/p>\n

Rising competition from universities in\u00a0Australia, Canada and the United Kingdom<\/a>, combined with stricter U.S. visa policies and geopolitical tensions with China, have led to\u00a0rapid declines<\/a>\u00a0in Chinese students enrolling at American schools.<\/p>\n

The number of Chinese\u00a0undergraduate and graduate students<\/a>\u00a0attending U.S. colleges and universities has dropped from 317,299 in 2019 to 265,919 in the 2024-25 school year.<\/p>\n

This change has increased the financial strain on American colleges and universities, many of which have grown accustomed to having large numbers of international students who pay their own way.<\/p>\n

4. The value of the product is in question<\/strong><\/h4>\n

With recent changes to\u00a0federal loan forgiveness programs<\/a>, some students and their parents are questioning\u00a0the value of a college degree<\/a>.<\/p>\n

Just\u00a022% of Americans<\/a>\u00a0said in 2024 that a college degree is worth the cost, if a student has to borrow money to get it.<\/p>\n

The University of Texas system \u2013 made up of nine universities and four medical schools \u2013\u00a0shares information<\/a>\u00a0on the average income of graduates for every degree program after graduation.<\/p>\n

In the case of the University of Texas at Arlington, the\u00a0average salary for a drama, theater arts and stagecraft major<\/a>\u00a0is $14,933 one year after graduation. This amount goes up to $39,608 10 years after graduation, resulting in a negative $324,210 return on the price of college over that first decade.<\/p>\n

Of course, some degrees pay off. A University of Texas at Arlington graduate with a degree in civil engineering earns an average of $67,920 one year after college and $105,377 10 years after graduation, demonstrating a positive return on investment of\u00a0$1.15 million<\/a>.<\/p>\n

We believe that universities and colleges should reform to address the next generation\u2019s uncertainty about higher education.<\/p>\n

College applicants should be asking hard questions. What is the data on graduates\u2019 earnings compared to the cost of their program? Where are graduates employed?<\/p>\n

If more people treated buying a college degree with the same care they use to buy their first home \u2013 an equivalent investment \u2013 colleges and universities would feel pressure to become more transparent for students and parents. They would also become more aligned with the rapidly evolving demands of the workplace.<\/p>\n

Author Bios:<\/strong> Roger Meiners is the Goolsby-Rosenthal Endowed Chair of Economics at the University of Texas at Arlington and Andrew P. Morriss is Professor, Bush School & School of Law at Texas A&M University<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Higher education is under stress. The highest-profile threat has been the Trump administration\u2019s efforts to cut funding to\u00a0several universities,\u00a0including Harvard,\u00a0Columbia and\u00a0Northwestern. Research universities heavily depend on federal money to conduct research and carry out other areas of work. For example, after tuition, federal money allocated\u00a0for research\u00a0made up 40% of the total revenue for two major […]\n… learn more→<\/a><\/p>","protected":false},"author":33,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[29],"tags":[3654],"coauthors":[11733],"class_list":["post-79087","post","type-post","status-publish","format-standard","hentry","category-higher-education","tag-funding"],"acf":[],"yoast_head":"\nFederal funding cuts are only one problem facing America\u2019s colleges and universities - World leading higher education information and services<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/world.edu\/federal-funding-cuts-are-only-one-problem-facing-americas-colleges-and-universities\/\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:locale\" content=\"en_US\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:type\" content=\"article\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:title\" content=\"Federal funding cuts are only one problem facing America\u2019s colleges and universities - World leading higher education information and services\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:description\" content=\"Higher education is under stress. The highest-profile threat has been the Trump administration\u2019s efforts to cut funding to\u00a0several universities,\u00a0including Harvard,\u00a0Columbia and\u00a0Northwestern. Research universities heavily depend on federal money to conduct research and carry out other areas of work. 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