Congratulations on making it through the first month of 2025. However, college administrators are facing complex issues this year. From shifting demographics and the return of student loan defaults to maintaining academic quality and public trust, the pressure to create sustainability within higher education is immense, let alone finding ways to thrive. Let’s dive into the top three challenges keeping college administrators up at night in 2025.
1. Navigating the Enrollment Cliff: Strategic Management for Long-Term Sustainability
Last week, we reported growing enrollment data for the academic school year. All sectors in higher education saw growth, but most of the numbers are still below pre-pandemic figures. So, we can comfortably say that this was a post-pandemic bump, but will this trend continue? It’s likely not, given the looming demographic enrollment cliff.
Beginning this year, the pool of potential high school graduates will shrink due to falling birth rates, putting pressure on college administrators to improve their enrollment strategies. Competition for students is fiercer than ever, making strategic enrollment management a top-of-mind concern for college leadership to find financial sustainability in the years to come. This shrinking pool of traditional students necessitates a shift in recruitment strategies.
What can be done?
Based on the enrollment data, many colleges are beginning to diversify their student base by targeting adult learners, international students, and non-traditional students. Demand for online and hybrid programs is growing, along with more progressive fields of study such as data engineering, cybersecurity, and machine learning management.
College administrators need to ensure their institution is producing graduates that employers desire and, most importantly, correctly marketing and communicating that value to prospective students. A strong enrollment management strategy will focus on the prospects most likely to convert and have rock-solid data to power their methods of engagement. This might include:
- Targeted outreach: Developing personalized communication strategies for different student segments.
- Data-driven decision-making: Utilizing analytics to track enrollment trends and optimize recruitment efforts.
- Enhanced online presence: Creating a user-friendly website and leveraging social media to reach prospective students.
2. Combating the Student Loan Debt Crisis: Default Aversion Tactics
This year will be the first time student loan borrowers will reach default. There was a three-year payment pause during the COVID-19 pandemic followed by a 12-month on-ramp period. Theoretically, some borrowers may have gone up to four years without making a single payment without any negative consequence. The 12-month on-ramp period ended in October 2024, which means January marked the first time borrowers would be more than 90 days delinquent and eligible for delinquency reporting to credit agencies.
The current 91-180 delinquency bucket of borrowers is three times higher than pre-pandemic figures: $84.5B for Q4 of 2024 compared to $27.5B in Q4 of 2019. This surge in delinquency rates poses a significant threat to borrowers’ financial well-being and could lead to a sharp increase in Cohort Default Rates for colleges.
What can be done?
These delinquency rates are a warning to college administrators to put their default aversion plans into high gear before those delinquencies cause record-high Cohort Default Rates later this year. Many students have not repaid their loans because they either believe their loans will be forgiven or there haven’t been any consequences for non-payment. A good default aversion strategy will proactively guide borrowers into sustainable payment plans such as income-driven options to ensure they can afford their monthly payments and are aware of their obligations. This includes:
- Proactive communication: Reaching out to borrowers early and often to provide information about repayment options.
- Financial literacy programs: Educating students about responsible borrowing and money management.
- Personalized counseling: Offering one-on-one support to help borrowers navigate the repayment process.
3. Maintaining Academic Quality and Public Trust in Higher Education
The goal of every college and university should be to deliver the best possible education and prepare graduates to work in their field of study. Skills gaps can leave graduates underemployed or unemployed, further exacerbating the student debt crisis. The job market is constantly evolving, and colleges need to adapt to meet changing demand.
Furthermore, the rising cost of college can make it difficult to convince the public of the return on investment of a college education, especially with the risk of taking on high student loan debt. Transparency and demonstrable outcomes are crucial for rebuilding and maintaining public trust.
What can be done?
Successful higher education institutions will evolve with the times. That means embracing new technology, including AI and machine learning, and adapting to the evolving job market. Likewise, institutions should do more to help their students throughout the lifecycle, including supporting their financial literacy and mental health. When institutions do right by their students beginning with enrollment and guiding them throughout school and after graduation, they will be generating outstanding individuals ready to make the world a better place for everyone. This can involve:
- Focus on student outcomes: Tracking graduate employment rates and salary data to demonstrate the value of a college education.
- Curriculum innovation: Regularly updating academic programs to reflect current industry trends and employer needs.
- Real-world learning opportunities: Providing students with internships, co-ops, and other hands-on experiences.
Navigate these Challenges with IonTuition
IonTuition has been helping colleges and universities succeed for over ten years. They offer advanced strategic enrollment management support and service along with student loan default aversion. Contact their sales team today to get started.