For many institutions of higher education (including the one I work for), Coursera is an important online learning partner. Therefore, it was a big deal when Coursera announced earlier this year that Greg Hart was taking over as CEO from Jeff Maggioncalda. This space seemed like a good place to begin to get to know Greg, and he graciously agreed to answer my questions.
Q: You’ve spent the majority of your career at Amazon, so education is a new space for you. What do you want universities to know about how you’ll approach partnerships, and how will your background influence how you lead Coursera?
A: My background is rooted in building and scaling technology-driven businesses that serve millions of customers. At Amazon, I led the creation and launch of Alexa and later served as the global head of Prime Video. Those roles shaped how I think about innovation, long-term customer value and meaningful experiences at scale. While higher education is a new sector for me, there are clear parallels: At Amazon, we solved enduring customer problems through technology. That same principle applies at Coursera—learners are seeking flexible, high-quality and job-relevant education, often in moments that define the trajectory of their lives. Both our university and industry partners are working with us to meet these evolving needs with world-class learning content, enabled by our platform’s ability to deliver personalized learning experiences at scale.
What makes this work especially meaningful is the higher stakes involved. We’re not just helping people shop or stream content—we’re helping them transform their lives through access to learning. That sense of purpose is what drew me to Coursera. I approach our university partnerships with deep respect for the role higher education plays in society, and I see my responsibility as ensuring Coursera is a trusted, effective and mission-aligned partner for institutions around the world.
Q: Can you update us on Coursera’s business, focusing on the biggest growth drivers and challenges? How confident can universities be in Coursera’s long-term financial resilience as a strategic partner?
A: Coursera is where the world comes to gain new skills and learn from the most trusted institutions. Content is the engine of our business and the foundation of our ecosystem. Today, we partner with more than 350 leading universities and companies, offering job-relevant content across a wide range of domains, including technology, business, AI and data science.
This catalog has attracted more than 175 million learners globally, including more than seven million new registered learners in the first quarter of this year alone. Many learners come to Coursera directly through our platform, while a growing number access content through institutional settings via our enterprise offerings. This entire ecosystem is powered by a unified platform that enables our partners to reach a global audience at scale, leverage data to inform content strategy and skills recommendations and harness advanced AI tools to drive personalized learning and discovery.
Since going public in 2021, we’ve operated as responsible stewards of our capital, balancing disciplined cost management with long-term investments in growing our business and advancing our mission. Coursera is in an extremely stable position financially: We are growing, we generate positive free cash flow, we have a very healthy balance sheet and we have no debt.
In Q1 2025, we delivered $179 million in revenue, up 6 percent year over year on growth in our consumer and enterprise segments and generated over $25 million in free cash flow, marking our strongest quarter of cash performance to date. Based on this strong start, we now expect full-year 2025 revenue to be between $720–730 million, with annual adjusted EBITDA margin improvement of 100 basis points to 7 percent—an outlook that reflects both durable demand and growing operating leverage. As of March 31, 2025, we have approximately $748 million in unrestricted cash and no debt, giving us both the stability and flexibility to invest in platform innovation, expand our content ecosystem and continue supporting our partners and learners around the world.
Q: Given your background in industry, do you see more value in partnerships and content from businesses, like industry microcredentials? How do colleges and degrees factor into your long-term vision?
A: Coursera was founded in 2012 by two Stanford professors, Andrew Ng and Daphne Koller. Universities are, and will continue to be, central to Coursera’s mission and strategy—especially in an era shaped by generative AI, where enduring human skills and trusted credentials are more important than ever. University content is vital not only to degree programs, but also to our offerings for individuals, businesses and governments. Some of our most popular courses are from top university instructors—Jules White of Vanderbilt, Vic Strecher of Michigan, Laurie Santos of Yale and Sydney Finkelstein of Dartmouth.
We do not view degrees and nondegree programs as competing priorities. Rather, we believe in building an interconnected ecosystem that gives learners the flexibility to start with entry-level microcredentials, build towards academic credit and ultimately stack into full degrees. Today, 90-plus entry-level professional certificates are offered by our industry partners, and a third of them carry credit recommendations, making them a natural on-ramp to higher education. Our degree portfolio has expanded to over 50 programs and remains a strategic component of our consumer offering.
There is an endless war being waged against colleges and universities in this country, one unprecedented in our lifetimes. Not merely a war of words, it is one of deeds. Beginning with state-level efforts to ban “critical race theory” and “divisive concepts” from college classrooms and diversity, equity and inclusion initiatives from campuses, it has now grown into an obsessive preoccupation of federal policy.
Broad executive orders have sought to ban concepts related to race, gender and identity on campus, using the leverage of withheld federal grants. Drastic and indiscriminate cuts have been made to university funding. International students have had their visas revoked on the basis of their political views. Attacks on nonpartisan university accreditors have mounted. And escalating demands that elite private research universities effectively place themselves in government receivership or lose further billions in federal dollars have thrown the sector into chaos.
That is why I was honored to sign, and to help coordinate, last month’s letter from more than 600 college, university and scholarly society presidents in defense of our nation’s institutions of higher learning. The letter, which calls for “constructive engagement that improves our institutions and serves our republic,” also criticizes “the unprecedented government overreach and political interference now endangering” institutions of higher learning and warns that “the price of abridging the defining freedoms of American higher education will be paid by our students and our society.”
I remain concerned that the problems colleges and universities face today go deeper than funding cuts and government threats. Indeed, our national debate over higher education has lost the plot entirely. Critics of higher education present the entire sector as an elitist, out-of-touch indoctrination factory for liberal orthodoxy, one that has replaced the great books of the Western canon with political claptrap. This charge has gained broad traction among the public. But not only is it untrue on the merits, it fundamentally misunderstands the purpose and mission of higher education. It asks the wrong question and delivers the wrong answer.
If our sector is to regain the respect and appreciation of American society, we need to reorient the national conversation. We need to help people remember what it is that colleges and universities actually do—and why it matters.
The American Association of Colleges and Universities, where I have been president since 2016, is a voice and a force for what we call liberal education. Let me be clear: teaching students to believe in liberal politics or conservative politics is the opposite of what “liberal education” means. Rather, the term, which predates modern political labels, refers to liberating the mind from received orthodoxies of all types.
I agree with Margaret Mead—and with leaders across the political spectrum, from Barack Obama to Ron DeSantis—that students should be taught how to think, not what to think. A successful college education is measured not by what its graduates believe but by what they can conceive. It fires the imaginations of its students, helps them explore ideas and experiences different from their own, and trains them in habits of thought and mind that aid them in making their own meaning from the world. It provides them both with the practical skills they will need for their future employment and with the critical thinking tools that help them attain, and succeed in, their jobs of choice. By providing a forum and a method for open inquiry and intellectual freedom, and by exposing students and communities to new ideas and perspectives, it also helps to strengthen our democracy.
This type of education does not happen by chance, from a hodgepodge of unconnected courses; it is part of a plan. For decades, AAC&U has served as a learning lab for a type of comprehensive undergraduate education that teaches students in a systematic way, over the course of a two-year or four-year degree, how to become effective thinkers and problem-solvers. We pioneered the concepts of high-impact practices, inclusive excellence and innovations in general education, learning outcomes and assessment, innovations that have been adopted by hundreds of campuses across the country, including many of our nearly 900 member institutions.
Higher education should always try to do better at opening students’ minds; in fact, that commitment is at the core of my organization’s work. Taking criticism seriously is how colleges and universities innovate and improve. But that innovation cannot happen if the government steps in to ban or defund ideas it dislikes, taking away the academic freedom of faculty; if it strips university leadership of its autonomy to make decisions about what ideas are permitted or promoted on campus; or if it makes so many threats or cuts that professors and students become afraid to speak and think freely.
The careful process of preparing students for democratic citizenship requires helping them understand the great multiplicity of people, cultures and beliefs that make up the world we live in. It is time for us to stop asking whether colleges and universities teach the “right” ideas and ask, instead, whether they teach students the skills they need to navigate our complex world. That approach would lead us away from culture wars and heavy-handed government restrictions and toward constructive engagement with the educational missions of colleges and universities so they can work together with government to improve our students’ educations.
Lynn Pasquerella is president of the American Association of Colleges and Universities.
In recent years and months, the UK has seen considerable debate over immigration policy, with proposed changes that could make studying here less attractive for prospective students.
The report’s findings present a striking varied picture. On one hand, it reaffirms the UK’s position as a leading global study destination, with one in seven respondents stating the UK’s high-quality education and globally recognised universities were their main motivations for studying here. For three in four students, the UK was their first-choice destination. Students are also attracted by the shorter course lengths, multicultural environments and post-study work opportunities offered through the Graduate Route.
Alongside this positive narrative, the report reveals a deeply challenging reality for many students once they arrive. Half of the international students we surveyed reported struggling with poor mental health during their time here, a statistic that will resonate with academic and professional services staff who see students day in, day out.
Living costs are also having a direct impact on student wellbeing, with monthly expenses (excluding tuition fees) averaging £1,402 and rising to £1,635 for students in London. For many, studying in the UK means short- and medium-term financial hardship and consignment to long-term debt. Over 30 per cent of postgraduate taught students rely on bank loans or credit cards. One in five worries about money all the time. Those most affected by financial stress are also more likely to report poor mental health.
Despite these pressures, current visa rules prevent international students from pursuing freelance work or self-employment, even in areas where their skills are in high demand. These restrictions are not only impractical but risk undermining both the student experience and the UK’s wider economic priorities.
Barriers to belonging
Just as concerning are the social barriers many students face. One in three international students reported they had experienced racism while in the UK. While 94% reported feeling safe and welcome on campus, that sense of belonging often didn’t extend to the wider community, with only 73% stating they feel safe and welcome in the UK more generally. These experiences can leave lasting impacts and send the wrong message to future students weighing up their study options against other international destinations.
Ultimately, these findings highlight a simple reality: the UK remains a top choice, but we cannot take that status for granted. Negative public rhetoric, which sometimes labels international students as a ‘problem’, ignores evidence that they contribute billions to our economy, volunteer in our local communities and improve our universities’ teaching and contribute to our world-leading research. International students are our peers, colleagues and future leaders. Therefore, it’s important we balance any concerns about immigration with the fact that international students are part of our future.
A roadmap for reform
This report centres students’ experience of studying here and sets out a roadmap for meaningful change. At a national level, we are calling on the Government to:
Freeze visa application fees and the Immigration Health Surcharge;
Allow greater flexibility in term-time work and permit self-employment and freelance work during study; and
Conduct a cross-departmental impact assessment on how immigration policies and public messaging affect the international student experience.
These policies are essential if we want to keep the UK globally competitive.
Shared responsibility across the sector
But change cannot come from Westminster alone. Universities and higher education sector bodies must also act. We’re asking universities to consider:
Fixing international students’ tuition fees at the point of entry;
Providing equitable access to hardship funds with clear eligibility criteria;
Delivering culturally competent mental health support that truly meets students’ needs;
Call on employers and careers services to better understand the Graduate Route and provide more tailored advice and job opportunities for international students; and
Adopt UKCISA’s #WeAreInternational Student Charter as a framework to improve the international student experience.
Working together for a welcoming UK
Our report is a call to action. We invite government ministers, MPs and Peers, and university leaders to work with their students’ unions to engage with the report’s findings and work collaboratively on solutions. The APPG for International Students and UKCISA have helped amplify the student voice; now we ask on all stakeholders to join the conversation and implement evidence-based policies.
Widening access to higher education has experienced a precipitous fall from grace in the eyes of politicians over the last ten years – a fall that may have slowed slightly but as yet to stop under this government.
This fall may have coincided with the shift away from place-based to institutional-focused approaches to the problem. The access and participation plan regime may have stopped widening participation slipping out of sight completely but as our latest report shows, they have done little to increase higher education participation for those from the poorest backgrounds, particularly in rural and coastal areas.
Split geographies
The report – Coast and country: access to higher education cold spots in England – looks at the data published annually by the Department of Education on participation in higher education by free school meal (FSM) backgrounds. There are things we know about what this data shows as outlined in previous reports I have written and more recent work such as that from the Sutton Trust – in particular that London does far better than everywhere else.
In this report, though, we show exactly how much. The national higher education participation rate in 2022–23 for those from FSM backgrounds was 29 per cent. If you take out London, which has only 16 per cent of the population of England, it falls to 23 per cent. London is covering up a much more challenging situation in the rest of the country than we are prepared to admit.
These challenges increase as areas get smaller. The report looks at the relationship between the size of an area and the FSM higher education participation rate. It drops steadily as population decreases from 43 per cent in big cities to 18 per cent in rural villages. Nor is the situation improving. The gap between London and the other 84 per cent of the population has increased 3 per cent from 2012–23 to 2022–23 and just under 3 per cent between predominantly urban areas and predominantly rural areas over the same period.
Many coastal areas in England – especially seaside resorts – have well documented problems with poverty, unemployment and health inequalities and higher education participation can be added to that list. The higher education participation rate for those from FSM backgrounds coastal communities was 11 per cent lower than in inland areas in 2022–23 with in many areas less than one in five such young people going onto higher education. There is an overlap here between rural and coastal areas here with the South West especially including areas of lower higher education participation.
It is often said that the differences in higher education participation described above are associated with attainment in schools. Increasing attainment was the priority where widening access work was concerned for the Office for Students for a number of years. In the report, we map GSCE attainment at the area level against FSM higher education participation – and the correlation is indeed strong.
It is far weaker, though, in villages and coastal areas than the rest of the country. This suggest that in the places where the problems are the greatest, better GCSE results alone won’t be enough. In 2022–23, six of the ten areas with the lowest levels of higher education participation did not have a university campus within them. What provision exists also matters.
We need new (old) stories
If any progress in closing the gaps between regions described above is to be made then place must again become the central focus for widening access to higher education work – as it was when the last Labour government championed the issue so vigorously in the 2000s.
The pendulum has swung too far since then toward what institutions themselves do. Consequently, that political link between widening access, opportunity and growth has been broken. It is possible that the government itself will swing the pendulum back to place, and some of the signs coming from the Office for Students in recent months have been promising.
However, higher education providers themselves can take the initiative themselves here and look for new ways to form stronger partnerships – ones that take whatever replaces Uni Connect as the start, not the endpoint, of what regional collaboration means.
While the sector’s financial challenges make competition for students more intensive than it has ever been – and thus collaboration in this area more difficult – the value of higher education itself is being questioned by young people more than it ever has been since participation increased rapidly in the 1990s. Fighting between each other for young people’s and their schools’ attention won’t convince those, especially from the poorest backgrounds, that higher education is worth it. But collaboration will.
Collaboration won’t produce additional provision in rural and coastal areas, or the money to fund it. But unless we shift the story and the practice of widening access back to place, this additional provision will never come.
In the summer of 2020, two issues dominated the headlines: the COVID pandemic and the widespread unrest surrounding George Floyd, Black Lives Matter, and the “racial reckoning.” It was in this environment, with the country also at or near the apex of “cancel culture,” that the University of Central Florida tried to fire associate professor of psychology Charles Negy for his tweets about race and society. Negy fought back and sued.
Five years later, his lawsuit continues — and last week, it brought good news not just for Professor Negy but for everyone who cares about free speech on campus.
Last week, Judge Carlos E. Mendoza of the U.S. District Court for the Middle District of Florida ruled that Negy’s lawsuit could proceed against four of the five administrators he sued. Importantly, the court denied claims of qualified immunity, a doctrine that says public officials aren’t liable for unconstitutional activity unless they knew or should have known their actions were unconstitutional. By denying qualified immunity to UCF’s administrators, Judge Mendoza formally recognized what was obvious from the very beginning: UCF knew or should have known that what it was doing violated the First Amendment, but they went ahead and did it anyway.
(As a note, Negy is represented by Samantha Harris, a former FIRE colleague, which is how I learned about his case a few years ago.)
Negy was fired for his speech, then re-instated by an arbitrator
In the summer of 2020, Negy posted a series of tweets (since deleted) commenting on race and society. (For example, on June 3, 2020, he tweeted: “Black privilege is real: Besides affirm. action, special scholarships and other set asides, being shielded from legitimate criticism is a privilege.”)
After some students complained to the school about Negy’s tweets, UCF responded by soliciting further complaints about him. That led to the opening of an investigation into Negy’s classroom speech as well. Seven months later, what began as an investigation of tweets led to 300 interviews; whichled to a (get ready for this) 244-page report. As I wrote at the time, the report made absolute hash of academic freedom with what struck me as nonsensical lines drawn between speech it believed to be protected and unprotected:
According to the UCF investigation, it is protected speech to say that girl scouts preserve their virginity (p. 25), but not that women are attracted to men with money (p. 26). It is protected speech to say that Jesus was schizophrenic (p. 36), but unprotected to say that Jesus did not come into the world to die for everyone’s sins (p. 36). It’s protected to say that Islam is cruel and not a religion of peace (p. 107) but not that it is a toxic mythology (p. 35).
Based on the report, in January 2021, UCF administrators decided to fire Negy without providing a normally required six-month notice period — allegedly because he was a “safety risk.” (Caution: Dangerous Tweets!) Unsurprisingly, in May of 2022, an arbitrator ordered him re-instated, citing a lack of due process. And as I pointed out then:
UCF’s case against Negy was never likely to survive first-contact with a neutral decision-maker. When an investigation of tweets includes incidents from 2005 — the year before Twitter was founded — either the investigator is lying about their purpose or confused about the linear nature of time.
In 2023, Negy sued the institution and five individuals who had been involved in the UCF decision. Some of Negy’s claims were dismissed last year; the recent ruling was on motions for summary judgment on the remaining claims.
Why claims only went forward against four out of five defendants
Last week’s ruling involved two causes of action. The first is a First Amendment retaliation claim against five individual defendants. First Amendment retaliation is basically just what it sounds like: a government employee retaliating against an individual for his or her protected speech. In Negy’s case, his claim is that certain UCF employees didn’t like his tweets, and decided to fire him for those tweets — with everything in-between, including the investigation and report, motivated by the desire to punish him for using his First Amendment rights on the Internet.
The second cause of action is against one particular UCF employee — the employee who was in charge of writing the report — alleging a direct First Amendment violation. Again, that’s just what it sounds like: a government official censoring Negy’s protected expression. Negy argued UCF’s report claimed that several instances of Negy’s in-classroom speech amounted to discriminatory harassment, when his speech was actually protected by the First Amendment as an exercise of academic freedom. In other words, Negy claimed that the UCF employee violated his First Amendment rights by telling decision-makers that Negy’s speech wasn’t protected.
To understand the judge’s ruling, it’ll be helpful to be able to refer to the defendants by something more than pronouns. Let’s meet them!
The first three were joint decision-makers about what to do with the investigation results. They are:
Alexander Cartwright, the president of UCF.
FUN FACT: While this case was pending, Cartwright received a 20% pay raise, giving him a base salary of $900,000 and potential total compensation of $1.275 million.
QUOTE: As quoted in the opinion, Cartwright responded to demands that Negy be immediately fired with: “Sometimes we have to go through a process, as frustrating as … that process is to me.” When asked, Cartwright could not recall what was frustrating about the process.
Michael Johnson, UCF’s provost and executive vice president for academic affairs.
QUOTE: Johnson publicly condemned Negy’s tweets the day the investigation started. At a 2022 arbitration hearing, Johnson said Negy was “dangerous” and that “[w]e didn’t see any way to put him safely in a classroom situation again.” Johnson was apparently so unconvincing that the arbitrator re-instated Negy anyway.
Tosha Dupras, who was at the time the interim dean of UCF’s College of Sciences. Dupras issued the notice of termination.
FUN FACT: Since 2022, this native of Canada has been dean of the College of Arts and Sciences at Texas Tech.
QUOTE: When responding to an email calling for Negy’s removal from the classroom long before the investigation was complete, Dupras said: “I agree with the thoughts you have expressed in [y]our email.”
Two others had different roles, but were not directly the decision-makers:
Nancy Fitzpatrick Myers, then the director of UCF’s Office of Institutional Equity. Myers ran the investigation.
FUN FACT: Since 2024, attorney Myers has been director of Yale’s University-Wide Committee on Sexual Misconduct.
QUOTE: From the opinion: “Although Myers stated that OIE performed an independent credibility assessment for the witness statements, she noted that the results were not written down and that it ‘was something [she] was assessing as [she] went through the record.’”
S. Kent Butler, who at the time was UCF’s interim chief Equity, Inclusion and Diversity officer, and is now a professor of counselor education. Butler, Cartwright, and Johnson put out the initial statement soliciting complaints about Negy.
FUN FACT: Butler did crisis management work in New Orleans after Hurricane Katrina.
QUOTE: Less than 24 hours after the start of the investigation, an incoming freshman asked Butler what would happen to Negy. Butler responded: “The wheels are in motion … [B]elieve that by the time you get on the campus as a freshman, it will have been dealt with.”
A brief summary of their roles in Negy’s firing, at least as described in the court’s opinion (I wasn’t there, after all):
Cartwright, Johnson, and Butler issued UCF’s initial statement about Negy, which invited people to submit complaints about him.
Myers wrote and submitted the 244-page report to Negy’s supervisor (not a party to this action), who then recommended Negy’s termination.
Cartwright, Johnson, and Dupras made the decision to terminate Negy.
The court granted Butler’s motion for summary judgment, deciding that Butler wasn’t at any point in the process a decision-maker. If Butler wasn’t part of the process to decide to terminate Negy, the court reasoned, then he wasn’t in a position to retaliate. I’m not sure I agree; I think putting out a press release inviting people to submit complaints could certainly create a chilling effect on speech, and therefore constitute an act of retaliation.
The court seems to view the termination as the only form of retaliation in question, but that isn’t how the complaint was written, which lists the statement as a form of retaliation. Sure, termination is worse, but I think that anything that would chill a person of reasonable fortitude from speaking out is potentially a form of retaliation. Having a government official multiple levels of supervision above you put out a call for complaints specifically about you would be a disincentive for most people, I’d think. But what do I know? “I’m just a caveman… your world frightens and confuses me.”
The court also granted Myers’ summary judgment motion on the second claim for direct censorship, ruling that the right to academic freedom over in-class speech has not been clearly established in the Eleventh Circuit. Negy had precedent from other circuits, but not this circuit, to show that in-classroom speech was entitled to some level of academic freedom. The court here is indeed bound by bad circuit precedent. The Supreme Court needs to fix this doctrine at some point.
Nevertheless, let’s move on…
The court rejects the qualified immunity defense for the retaliation claims
The remaining defendants argued they were entitled to qualified immunity, specifically arguing that Negy could not show he was terminated for his tweets. After all, in a vacuum, at no point did any of them say, “You, sir, have the wrong opinions on the Internet, and therefore you must fly from us. Begone!” Instead, there was a long investigation that found lots of things they didn’t like about what he said in the classroom. So their argument, in a nutshell, was that there’s no causality here. Where’s the smoking gun?
Negy’s response was that there was no observable “smoking gun” because the entire process was a smokescreen, and the decision to terminate him was effectively made by the time they announced the investigation. (Duh.) Because this was a motion for summary judgment made by the defendants, Negy only had to show the possibility that he could prove it at trial, and so he provided evidence that suggested the decision-makers had a preordained outcome in mind.
Scroll back and read the quotes in the mini-bios above. The court found that a reasonable jury could determine, given this and more evidence like it, that the investigation was a pretense.
There’s a second way the defendants could have gotten qualified immunity: by showing they’d have made the decision to fire Negy even if he hadn’t tweeted those statements, on the basis of the things reflected in the report. But the argument that they would’ve fired Negy for his classroom speech alone faced an awfully big hurdle: their 15 yearsof deciding not to do that. It wasn’t like Negy woke up one morning in 2020 after a lifetime of milquetoast platitudes and chose rhetorical violence.
From following this case, it seems to me that Negy’s entire career has been what I’d describe as punk rock pedagogy: he didn’t care if you loved it or hated it, as long as you remembered the show. There is an argument that the pursuit of truth is enhanced by that kind of teaching — a darned good one given how many of us have experienced it at one time or another. All of our interactions are balances between our honest opinions and what we can say within the bounds of society. There is only one human being I genuinely believe was so intrinsically good that his unfiltered views were socially acceptable to everyone, and Fred Rogers isn’t with us anymore. The rest of us are wearing masks at least some of the time, and letting those masks slip to study our real thoughts is something we might want to allow in a psychology classroom.
The court also noted that the purpose of qualified immunity was to avoid liability for unsophisticated decision-makers or decisions that had to be made on-the-spot, where the decision-maker wasn’t in a position to know what they did was unlawful. (The paradigmatic example is that of a police officer who has to make a split-second decision.) The court rejected that rationale: “Defendants had ample time to make reasoned, thoughtful decisions regarding how they wished to proceed with the investigation. Moreover, they had the benefit of making those decisions with counsel.” At some point, while writing their 244-page report, perhaps one of them might have considered the law? (FIRE has pushed this argument before.)
You stop that censorship right meow
The excessively logical among you might well be asking: If (diversity officer) Butler’s motion for summary judgment on the retaliation claim was granted because he wasn’t a decision-maker, and (investigator) Myers also wasn’t a decision-maker, why wasn’t Myers able to get summary judgment on the retaliation claim, too?
It has to do with something called the “cat’s paw” theory. The name comes from the fable of the monkey and the cat. The short, not-very-artistic version is this: A clever monkey talks a cat into reaching into a fire and pulling chestnuts out of it, promising to share them. Instead, the monkey eats the chestnuts as they come out, and all the cat gets is a burned paw. (Is it just me, or are monkeys in fables always mischievous? Where’s the decent monkey in mythology? Just once, give me the monkey who shares the chestnuts and and even brings some milk. Just once, 17th century French authors, subvert my expectations.)
Under the cat’s paw theory, a state actor can be liable for retaliation if they make intentionally biased recommendations to the decision-maker (who then does not independently investigate) in order to reach the desired outcome. Was this a biased investigation? My feelings on the topic are summed up in a 2021 story:
The entire process of preparing this report was motivated by complaints about Negy’s tweets. Nobody interviews 300 people over seven months about incidents covering 15 years unless they’re desperate to find something, anything, to use against their target. UCF’s lack of sincerity in their investigation of Negy’s tweets — which, technically, was what they were investigating, based on the spurious allegation that Negy’s offensive tweets were required reading in his classes — is reflected in their decision to investigate allegations as far back as 2005, the year before Twitter was founded.
I’ll paws here to make clear that I don’t purr-sonally know either Negy or the Defendants. Still, based on the timeline, the purr-ported need for the investigation, and its fur-midible scope, I’m feline like Negy was purr-secuted. The meow-nifestly unfair termination, I feel, is inseparable from the hiss-tory behind the report’s creation. (Okay, I’ll stop. Sorry, I was just kitten around.)
Institutions need to avoid overreacting to outrage
For Negy and the defendants (which is not the name of a punk rock band, yet), the next step is to decide if they can work this out themselves or they need a trial to look deeper into whether UCF’s decision to fire him was effectively made when the investigation started. But there’s a larger principle here that other institutions need to learn before they learn it the embarrassing way UCF has.
Maybe, just maybe, people saying things that merely offend you isn’t that serious. Maybe having someone in your community of nearly 70,000 students and over 13,000 faculty and staff members who says things that simply offend people is not actually a sign of a dire crisis. Maybe the students who demand that level of ideological conformity are not the ones you should be trying to attract. Because maybe, if you cultivate a level of automatic groupthink that rejects the possibility of dissenting views, you will come to discover that, eventually, your administration has a dissenting view.
What if, instead of reacting to every declaration of witchcraft by tightening the buckles on your hats, you tried explaining that lots of things might be offensive, and if you don’t like Negy, you might have luck with one of the thousands of other professors? What if, instead of modeling the kind of purge your ideological opponents might adopt one day if, I don’t know, they were politically powerful at some point, you modeled the idea that we can cooperate across deeply-held but incompatible beliefs?
I don’t know much about politics, but… It would certainly be cheaper, wouldn’t it?
FIRE will continue to follow Negy’s case and keep you updated.
On April 25, the Equal Employment Opportunity Commission’s Acting Chair, Andrea Lucas, issued a Commissioner’s Charge against Harvard University announcing that the EEOC is investigating whether “Harvard may have violated and may be continuing to violate Title VII [of the Civil Rights Act of 1964] by engaging in a pattern or practice of disparate treatment against white, Asian, male, or straight employees, applicants, and training program participants in hiring, promotion (including but not limited to tenure decisions), compensation, and separation decisions; internship programs; and mentoring, leadership development, and other career development programs.”
The charge also covers “entities managed by, affiliated with, related, or operating jointly with or successors to” Harvard University. This includes the institution’s medical school, school of public health, and school of arts and sciences, as well as the Brigham and Women’s Hospital and Massachusetts General Hospital, among others. The investigation will look back to 2018 for potential discrimination.
As Acting Chair Lucas explains in the charge, the allegations “are based on publicly available information regarding Harvard, including, but not limited to, documents and information published on Harvard and its affiliates’ public webpages (including archived pages); public statements by Harvard and its leadership; and news reporting.” The charge references documents that were on Harvard’s website, including resources that tracked its decade-long progress to diversify its faculty, but these documents have since been deleted from the university’s website.
Lucas highlights data showing a 10% drop in white men among “all ladder faculty” from 2013 to 2023 and the corresponding 10% increase in total women, nonbinary, and faculty of color in the same time span. She also points to the increase in the percentage of tenured and tenure-track faculty that are women, nonbinary, and/or people of color. Acting Chair Lucas believes Harvard took “such unlawful action in an effort to achieve, in Harvard’s own words, ‘demographic diversification of the faculty.’” Moreover, Lucas claims, “there is reason to believe that these trends and the underlying pattern or practice of discrimination based on race and sex have continued in 2024 and are ongoing.”
The charge also emphasizes that various programs hosted by the university and its affiliates — including fellowship programs, research opportunities, and other initiatives targeted toward underserved groups, including Black and Native American students — demonstrate disparate treatment by the university and its affiliates against White, Asian, male, and straight applicants and training program participants.
The EEOC’s Commissioner’s Charge is the latest escalation of the battle between Harvard and the Trump administration, which has frozen or paused billions of dollars in federal grants and contracts, threatened to revoke the school’s tax-exempt status, and initiated a task force to investigate the university’s behavior towards Jewish students. The Department of Education and Department of Health and Human Services are also investigating the university, including for race-based discrimination.
In a letter in response to the Department of Education, Harvard explained:
“Employment at Harvard is similarly based on merit and achievement. We seek the best educators, researchers, and scholars at our schools. We do not have quotas, whether based on race or ethnicity or any other characteristic. We do not employ ideological litmus tests. We do not use diversity, equity, and inclusion statements in our hiring decisions. We hire people because of their individual accomplishments, promise, and creativity in their fields or areas of expertise, and their ability to communicate effectively with students, faculty, and staff. And we take all of our legal obligations seriously, including those that pertain to faculty employment at Harvard, as we seek to offer our students the most dynamic and rewarding educational experience that we can.”
CUPA-HR will continue to monitor for updates related to this charge and other relevant enforcement activity at the EEOC.
May 19, 2025, by Dean Hoke: In my recent blog series and podcast, Small College America, I’ve highlighted the essential role small colleges play in the fabric of U.S. higher education. These institutions serve as academic homes to students who often desire alternatives to larger universities, and as cultural and economic anchors, especially in rural and small-town America, where, according to IPEDS, 324 private nonprofit colleges operate. Many are deeply embedded in the towns they serve, providing jobs, educational access, cultural life, and long-term economic opportunity.
Unfortunately, a wave of proposed federal budget cuts may further severely compromise these institutions’ ability to function—and in some cases, survive. Without intervention, the ripple effects could devastate entire communities.
Understanding the DOE and USDA Budget Cuts
The proposed reductions to the U.S. Department of Education (DOE) and U.S. Department of Agriculture (USDA) budgets present a two-pronged threat to small colleges, particularly those in rural areas or serving low-income student populations.
Department of Education (DOE)
The most significant concerns center on proposed changes to Pell Grants, a vital financial resource for low-income students. One House proposal would redefine full-time enrollment from 12 to 15 credit hours per semester. If enacted, this change would reduce the average Pell Grant by approximately $1,479 for students taking 12 credits. Students enrolled less than half-time could become ineligible entirely.
Additionally, the Federal Work-Study (FWS) and Supplemental Educational Opportunity Grants (SEOG) programs face serious threats. The House Appropriations Subcommittee has proposed eliminating both programs, which together provide over $2 billion annually in aid to low-income students.
Programs like TRIO and GEAR UP, which support first-generation, low-income, and underrepresented students, have been targeted in previous proposals; however, current budget drafts maintain level funding. Nonetheless, their future remains uncertain as negotiations continue.
The Title III Strengthening Institutions Program, which funds academic support services, infrastructure, and student retention efforts at under-resourced colleges, received a proposed funding increase in the FY 2024 President’s Budget, though congressional appropriations may differ.
Department of Agriculture (USDA)
The USDA’s impact on small colleges, while less direct, is nonetheless critical. Discretionary funding was reduced by more than $380 million in FY 2024, reflecting a general pullback in rural investment.
Programs like the Community Facilities Direct Loan & Grant Program, which supports broadband access, healthcare facilities, and community infrastructure, were level-funded at $2.8 billion. These investments often benefit rural colleges directly or indirectly by enhancing the communities in which they operate.
While some funding has been maintained, the broader trend suggests tighter resources for rural development in the years ahead. For small colleges embedded in these communities, the consequences could be substantial: delayed infrastructure upgrades, reduced student access to services, and weakened town-gown partnerships.
Why Small Colleges Are Particularly Vulnerable
Small private nonprofit colleges—typically enrolling fewer than 3,000 students—operate on thin margins. Many are tuition-dependent, with over 80% of their operating revenue derived from tuition and fees. They lack the substantial endowments or large alumni donor bases that buoy more prominent institutions during hard times.
What exacerbates their vulnerability is the student profile they serve. Small colleges disproportionately enroll Pell-eligible, first-generation, and minority students. Reductions in federal financial aid and student support programs have a direct impact on student enrollment and retention. If students can’t afford to enroll—or stay enrolled—colleges see revenue declines, leading to cuts in academic offerings, faculty, and student services.
Additionally, small colleges are often located in areas experiencing population decline. The so-called “demographic cliff”—a projected 13% drop in the number of high school graduates from 2025 to 2041 will affect 38 states and is expected to hit rural and non-urban regions the hardest. This compounds the enrollment challenges many small colleges are already facing.
Economic and Social Impact on Rural Towns
The closure of a small college doesn’t just mean the loss of a school; it signifies a seismic shift in a community’s economic and social structure. Colleges often rank among the top employers in their towns. When a college closes, hundreds of jobs disappear—faculty, staff, groundskeepers, maintenance, food services, IT professionals, and more.
Consider Mount Pleasant, Iowa, where the closure of Iowa Wesleyan University in 2023 cost the local economy an estimated $55 million annually. Businesses that relied on student and faculty patronage—restaurants, barbershops, bookstores, and even landlords—felt the immediate impact. Community organizations lost vital volunteers. Town officials were left scrambling to figure out what to do with a sprawling, empty campus in the heart of their city.
Colleges also provide cultural enrichment that is often otherwise absent in small towns. Lectures, concerts, art exhibitions, and sporting events bring together diverse groups and add vibrancy to the local culture. Many offer healthcare clinics, counseling centers, or continuing education for adults—services that disappear with a campus closure.
USDA investments in these communities are often tied to colleges, whether in the form of shared infrastructure, grant-funded development projects, or broadband expansions to support online learning. As these federal investments diminish, so too does a town’s ability to attract and retain both residents and employers.
Real-Life Implications and Stories
The headlines tell one story, but the real impact is felt in the lives of students, faculty, and the surrounding communities.
Presentation College in Aberdeen, South Dakota, ceased operations on October 31, 2023, after citing unsustainable financial and enrollment challenges. Hundreds of students, many drawn to its affordability, rural location, and nursing programs, were forced to reconsider their futures. The college quickly arranged teach-out agreements with over 30 institutions, including Northern State University and St. Ambrose University, which offered pathways for students to complete their degrees. The Presentation Sisters, the founding order, are now seeking a buyer for the campus aligned with their values, while local officials explore transforming the site into a technical education hub to continue serving the community.
Birmingham-Southern College in Alabama, a 168-year-old institution, closed its doors on May 31, 2024, after a $30 million state-backed loan request was ultimately rejected despite initial legislative support. The college had a $128 million annual economic impact on Birmingham and maintained partnerships with K–12 schools, correctional institutions, and nonprofits. The closure triggered the transfer of over 150 students to nearby colleges like Samford University, but left faculty, staff, and the broader community facing economic and cultural losses. A proposed sale of the campus to Miles College fell through, leaving the site’s future in limbo.
Even college leaders who have weathered the past decade worry they’re nearing a breaking point. Rachel Burns of the State Higher Education Executive Officers Association (SHEEO) has tracked dozens of recent closures and warns that many institutions remain at serious risk, despite their best efforts. “They just can’t rebound enrollment,” she says, noting that pandemic aid only temporarily masked deeper structural vulnerabilities.
Potential Closures and Projections
College closures are accelerating across the United States. According to the State Higher Education Executive Officers Association (SHEEO), 467 institutions closed between 2004 and 2020—over 20% of them private, nonprofit four-year colleges. Since 2020, at least 75 more nonprofit colleges have shut down, and many experts believe this pace is quickening.
A 2023 analysis by EY-Parthenon warned that 1 in 10 four-year institutions—roughly 200 to 230 colleges—are currently in financial jeopardy. These schools are often small, private, rural, and tuition-dependent, serving large numbers of first-generation and Pell-eligible students. Even a modest drop of 5–10% in tuition revenue can be catastrophic for colleges already operating on razor-thin margins.
Compounding the challenge, the Federal Reserve Bank of Philadelphia released a 2024 predictive model forecasting that as many as 80 additional colleges could close by 2034 under sustained enrollment decline driven by demographic shifts. This figure accounts for closures only—not mergers—and spans public, private nonprofit, and for-profit sectors.
Layered onto these economic and demographic vulnerabilities are the potential impacts of proposed federal education funding cuts. The Trump administration’s FY 2026 budget blueprint once again targets student aid programs, proposing the elimination or severe reduction of subsidized student loans, TRIO, GEAR UP, Federal Work-Study, and the Supplemental Educational Opportunity Grant (SEOG). Although similar proposals from Trump’s first term (FY 2018–2021) were rejected by Congress, the renewed push signals ongoing political pressure to curtail support for low-income and first-generation students.
To assess the potential impact of these policy shifts, a policy stress test was applied to both the Philadelphia Fed model and the historical closure trend. The analysis suggests that if these cuts were enacted, an additional 50 to 70 closures could occur by 2034.
Philadelphia Fed model baseline: 80 projected closures
With policy cuts: Up to 130 closures
Historical average trend (2020–2024): ~14 closures/year
10-year projection (status quo): ~140 closures
With policy cuts: Up to 210 closures
In short, depending on the scenario, anywhere from 130 to 210 additional college closures may occur by 2034. Institutions most at risk are those that serve the very populations these federal programs are designed to support. Without intervention—through policy, partnerships, or funding—the number of closures could rise sharply in the years ahead.
These scenario-based projections are summarized in the chart below.
Why Should Congress Care
According to the National Association of Independent Colleges and Universities (NAICU), a private, nonprofit college or university is located in 395 of the 435 congressional districts. These institutions are not only centers of learning but also powerful economic engines that generate:
$591.5 billion in national economic impact
$77.6 billion in combined local, state, and federal tax revenue
3.4 million jobs supported or sustained
1.1 million people are directly employed in private nonprofit higher education
1.1 million graduates are entering the workforce each year
As such, the fate of small private colleges is not just a higher education issue—it is a national economic and workforce development issue that should command bipartisan attention.
Strategies for Resilience and Policy Recommendations
There are clear, actionable strategies to reduce the risk of widespread college closures:
Consortium and shared governance models: Small colleges can boost efficiency and sustainability by sharing administrative functions, faculty, academic programs, technology infrastructure, and enrollment services. This allows institutions to reduce operational costs while maintaining their distinct missions and brands. In some cases, these arrangements evolve into formal mergers. An emerging example is the Coalition for the Common Good, a new model of mission-aligned institutions that maintain individual identities but operate under shared governance. This structure offers long-term financial stability without sacrificing institutional purpose or community impact.
Strategic partnerships: Collaborations with community colleges, online education providers, regional employers, and nonprofit organizations can expand reach, enhance curricular offerings, and improve student outcomes. These partnerships can support 2+2 transfer pipelines, workforce-aligned certificate programs, and hybrid learning models that meet the needs of adult learners and working professionals, often underserved by traditional residential colleges.
State action: States should establish stabilization grant programs and offer targeted incentive funding to support mergers, consortium participation, and regional collaboration. Policies that protect institutional access in rural and underserved areas are especially urgent, as closures can leave entire regions without viable higher education options. States can also play a role in convening institutions to plan for shared services and long-term viability.
Federal investment: Continued and expanded funding for Pell Grants, TRIO, SEOG, Title III and V, and USDA rural development programs is essential to sustaining the institutions that serve low-income, first-generation, and rural students. These investments should be treated as critical infrastructure, not discretionary spending, given their role in expanding educational equity, enhancing workforce readiness, and promoting rural economic development. Consistent federal support can help stabilize small colleges and enable long-term planning.
College leaders, local governments, and community groups must advocate in unison. The conversation should move beyond institutional survival to one of community survival. As the saying goes, when a college dies, the town begins to die with it.
Conclusion
Small colleges are not expendable. They are vital threads in the educational, economic, and cultural fabric of America, especially in rural and underserved communities. The proposed federal budget cuts across the Departments of Education and Agriculture represent a direct threat not only to these institutions but to the communities that depend on them.
If policymakers fail to act, the consequences will be widespread and enduring. The domino effect is real: reduced funding leads to fewer students, tighter budgets, staff layoffs, program cuts, and eventually, campus closures. And when those campuses close, entire towns are left to absorb the fallout—economically, socially, and spiritually.
We have a choice. We can invest in the future of small colleges and the communities they anchor, or we can stand by as they vanish—along with the promise they hold for millions of students and the towns they call home.
References
U.S. Department of Education, FY 2025 Budget Summary and Justifications
National Association of Student Financial Aid Administrators (NASFAA), Analysis of Proposed Pell Grant and Campus-Based Aid Reductions
State Higher Education Executive Officers Association (SHEEO) and Higher Ed Dive, Data on College Closures and Institutional Viability Trends
Fitch Ratings, Reports on Financial Pressures in U.S. Higher Education Institutions
Iowa Public Radio and The Hechinger Report, Case Studies on Rural College Closures and Community Impact
Council for Opportunity in Education (COE), Statements and Data on TRIO Program Reach and Effectiveness
Federal Reserve Bank of Philadelphia, Predictive Modeling of U.S. College Closures (2024)
EY-Parthenon, 2023 Report on Financial Vulnerability Among Four-Year Institutions
U.S. Department of Agriculture (USDA), Rural Development and Community Facilities Loan & Grant Program Summaries
Interviews and commentary from institutional leaders, TRIO program directors, and SHEEO policy staff
Integrated Postsecondary Education Data System (IPEDS), Data on Enrollment, Institution Type, and Geographic Distribution
Dean Hoke is Managing Partner of Edu Alliance Group, a higher education consultancy. He formerly served as President/CEO of the American Association of University Administrators (AAUA). With decades of experience in higher education leadership, consulting, and institutional strategy, he brings a wealth of knowledge on small colleges’ challenges and opportunities. Dean is the Executive Producer and co-host for the podcast series Small College America.
The Department of Defense is planning to cap indirect cost reimbursement rates for higher education institutions at 15 percent, according to a May 14 memo signed by Secretary of Defense Pete Hegseth.
“The Department of Defense (DoD) is the steward of the most critical budget in the Federal Government—the budget that defends our Nation, equips our warfighters, and secures our future. That stewardship demands discipline. It demands accountability. And it demands that we say no to waste,” wrote Hegseth.
The memo directs the DOD to develop the new policy within 21 days, marking the fourth federal agency—including the National Institutes of Health, the Department of Energy and the National Science Foundation—that has enacted a plan to cap indirect cost rates at 15 percent. For decades, universities have negotiated with the federal government to calculate bespoke indirect cost reimbursement rates to pay for research costs that support multiple grant-funded projects, such as facilities maintenance, specialized equipment and administrative personnel. (The paragraph has been updated.)
Universities and their trade associations have already sued the NIH, DOE and NSF over these plans, arguing that capping indirect costs would hurt research production and compromise global competitiveness, all while violating multiple aspects of the Administrative Procedure Act, including bypassing congressional authority required to alter indirect cost rates. So far, federal judges have blocked indirect cost caps from taking effect at the NIH and DOE. The NSF agreed to pause the cap until June 13 in order to proceed to summary judgment, which is a way to resolve the case quickly without a full trial.
Matt Owens, president of COGR, which represents research institutions, condemned the DOD’s newly announced plan.
“DOD research performed by universities is a force multiplier and has helped to make the U.S. military the most effective in the world. From GPS, stealth technology, advanced body armor, to precision guided missiles and night vision technology, university-based DOD research makes our military stronger,” Owens said in a statement. “A cut to DOD indirect cost reimbursements is a cut to national security. Less funding for research means less security for our nation.”
Hegseth’s memo claimed that capping the Defense Department’s indirect cost rate for universities would “save up to $900 [million] per year on a go-forward basis,” while also claiming that the department’s “objective is not only to save money, but to repurpose those funds—toward applied innovation, operational capability, and strategic deterrence.” The NIH has also made similarly incompatible assertions. It touted on social media its indirect rate cap plan’s potential to save taxpayers more than $4 billion, while a lawyer for the NIH told a federal judge that the cut was simply a reallocation of funds.
The Defense Department’s plans “will not stop at new grants,” Hegseth wrote, adding that “meaningful savings can also be achieved by revisiting the terms of existing awards to institutions of higher education.” The memo directed the under secretary of defense for research and engineering to do the following within 30 days:
Initiate a departmentwide effort to renegotiate indirect cost rates on existing financial assistance awards to institutions of higher education. “Wherever cooperative, bilateral modification is possible, it shall be pursued.”
“Where bilateral agreement is not achieved, identify and recommend lawful paths to terminate and reissue the award under revised terms.”
“Complete renegotiations or terminations for all contracts by 180 days from the date of this memorandum.”
Under a new accountability measure recently proposed as part of a larger House budget bill, colleges would have to pay millions of dollars each year to reimburse the government for their students’ unpaid loans.
The plan builds on an idea—known as risk-sharing—that lawmakers and policy analysts have been toying with since at least 2015. As the federal student loan portfolio grew, the goal was to require colleges to have some skin in the game and incentivize them to improve student outcomes.
And while the concept has gained some bipartisan support in theory, higher education institutions have repeatedly argued that it is difficult to create a fair accountability system when many of the variables involved are out of an institution’s control and depend on the decisions of individual students and borrowers.
So far, the higher ed lobby has successfully defeated proposed risk-sharing plans such as the one included in a Republican bill from the last Congress, known as the College Cost Reduction Act. But now, an almost identical proposal is back and at the heart of House Republicans’ plan to cut at least $330 billion from higher education programs over the next 10 years. The overall legislation, which aims to cut $1.5 trillion from the budget, could receive a vote on the House floor this week, though some lawmakers have threatened to block the measure amid concerns that it doesn’t include deeper cuts. Even if the bill fails, it serves as a marker of what House Republicans hope to accomplish moving forward.
Many higher education policy experts warn that practically speaking, the latest risk-sharing plan relies on a complicated formula that’s essentially a black box. Released in late April, the proposal has not been tested enough to know its ramifications, they say, and the limited data available is inconclusive. Some analyses released by conservative groups say the program will be a financial boost for efficient public institutions and penalize bloated private ones. But one study conducted by a lobbying group suggests that public regional and minority-serving institutions that serve high populations of low-income students will get hit the hardest.
“Fundamentally it’s an astonishing level of federal overreach to essentially lump in all institutions of higher education together—public, private, for-profit—and run a convoluted formula to determine winners and losers at the federal level and then redistribute funding,” said Craig Lindwarm, senior vice president of government affairs for the Association of Public and Land-grant Universities.
Democratic politicians also argue that the purpose of the legislation is not truly to hold colleges accountable for student outcomes like graduation rates and income levels, but to crack down on what the government considers overly liberal institutions and fund President Donald Trump’s priorities.
Even some conservative supporters acknowledge that it’s difficult to know the full scope of the bill’s potential impact this early. But they say risk-sharing is a necessary tool to penalize colleges that provide a poor return on investment and ensure the production of a well-prepared, financially stable workforce. They also suggest that the incentives such as additional grant funding to institutions that keep costs low and graduation rates high will offset the penalty for most public institutions.
“With any policy change, we’re not going to be able to predict in advance 100 percent of how this is going to affect everyone, everywhere, all the time. But I don’t think that should be an excuse to not make policy changes,” said Preston Cooper, a senior fellow at the conservative think tank the American Enterprise Institute. “I still think the data we have gives us a general idea of which sorts of institutions would be affected and the magnitudes of the penalties involved.”
So How Does It Work?
The proposed risk-sharing plan would kick in for new loans starting in July 2027, said an aide for Republicans on the House Education and the Workforce Committee. That means colleges wouldn’t be penalized for disruptions to the student loan system that occurred during the pandemic or efforts during the Biden and Trump administrations to overhaul repayment.
If we don’t even understand how this works, why the heck are we passing it? I mean, it’s a concept, but I don’t think it’s the concept that people think it is.”
Jason Delisle, nonresident senior fellow at the Urban Institute
And because borrowers don’t have to start paying back their loans until six months after they graduate or stop out, institutions likely won’t have to pay a penalty until 2029 or 2030 at the earliest, the aide added.
But from then on, institutional payments would be calculated annually—major by major—for each new cohort of borrowers and would continue until they’ve paid off their loans. The amount per cohort could change from year to year, depending on factors such as borrower behavior, postgraduation earnings and college costs. But it’s expected to grow as more and more cohorts are added to the lump sum.
Under the bill, the amount per cohort would be calculated using a three-part formula, which is largely unchanged from what Republicans proposed last Congress in the CCRA.
The first step is to determine a college’s risk-sharing liability, which is how much each institution owes the government. To do that, the formula looks at the difference between how much students were supposed to repay during a given year and how much they actually did. The calculation takes into account the value of any missed or partial payments as well as any interest that the government waived or principal contributions it matched, the committee aide said. It does not, however, include debt waived through programs like Public Service Loan Forgiveness, which was a concern for institutions.
This is the part of the formula that raises the most questions for institutions, as the mechanics of exactly how the risk-sharing liability is calculated are not clearly outlined in the legislation or in a CCRA database published by the education committee Republicans in 2024. And even if it were, much of the data needed to run the formula is not publicly accessible.
“How the formula works is the million-dollar question, and something that we’ve been trying to work on for a year and a half,” one policy expert said. “It’s very complicated and relies on metrics that aren’t publicly available.”
House committee aides counter that colleges have access to student borrower data via the National Student Loan Data System, which can be used to predict future risk-sharing payments. They also point to a recent Dear Colleague letter reminding colleges of their responsibility to monitor borrower payments.
But even then, higher ed lobbyists say, it’s not clear who will be responsible for calculating the liability. If any part of that responsibility falls to campus financial aid administrators, higher ed groups say the plan will increase the administrative burden on colleges.
“If I were a lobbyist, I would just say to all of my members, go to your congressman and say, ‘We don’t know what this does,’” said Jason Delisle, a policy analyst who has worked at think tanks across the political spectrum but is now based at Urban Institute where he’s a nonresident senior fellow. “If we don’t even understand how this works, why the heck are we passing it? I mean, it’s a concept, but I don’t think it’s the concept that people think it is.”
Incentives to Lower Costs
Once that risk-sharing liability is known, the next step in the formula is to figure out how much of that liability fee a college will have to pay. That’s done using what the legislation calls an earning-price ratio, which compares students’ earnings to the federal poverty line and college cost. A higher EPR means a lower final payment. For example, if an institution’s EPR is 0.3, or 30 percent, then it has to pay 70 percent of the original liability.
To further offset the risk-sharing penalty, colleges can also qualify for a new pot of funding proposed in the bill called the PROMISE Grant, which is the third step of the formula. How much a college would get in PROMISE funding depends on the total value of Pell Grants received and the graduation rate of Pell-eligible students. This grant is funded by other colleges’ risk-sharing payments.
Rep. Tim Walberg, a Michigan Republican and chair of the House Education and Workforce Committee, is leading the effort to cut billions from higher education programs.
Bill Clark/CQ-Roll Call Inc. via Getty Images
So, according to data from the House committee, the State Technical College of Missouri should get $3,230,130.50 in PROMISE grants. But the community college would have to pay $9,688, bringing its net gain down to $3,220,442.50. Washington University in St. Louis, however, would receive no PROMISE Grant funding and lose about $3.5 million. (The House Committee data only lists the final risk-sharing payment—not original liability values or EPRs.)
In theory, this data demonstrates how the EPR and the PROMISE Grant are supposed to support colleges that serve low-income students, but many higher ed lobbyists are worried the program will actually do the opposite. That’s largely because colleges can only receive a PROMISE Grant if they agree to lock in tuition rates for each new freshman class. If they can keep tuition costs low, then their EPR scores will only be strong. Some lobbyists say that neither is a feasible option for public colleges and minority-serving institutions, which rely heavily on funding from the state.
“It’s not a coincidence that some of our schools that would get hit the hardest are in states that invest very little in public higher education. Some of our schools in Pennsylvania and Arizona, for example, would fare extremely poorly, and it’s by and large because tuition levels are such a determinative component as it relates to the penalty assessment,” said MacGregor Obergfell, director of governmental affairs at APLU. “To think of what traditional conservative orthodoxy is, it seems pretty unusual that a conservative position is using the federal government to punish state institutions for decisions made by their states.”
Reward or Penalty?
Some higher ed groups also noted that much of the formula either depends on or fails to acknowledge factors outside of a college’s control. Much of this has to do with unpredictable borrower behavior, but there are other factors at play, too; for example, when calculating discounts with the EPR, the formula doesn’t account for differences in the cost of living from college to college.
“Institutions in higher-cost areas are at more of a disadvantage than other institutions,” said Karen McCarthy, vice president of public policy and federal relations for the National Association of Student Financial Aid Administrators. “They have to charge higher prices to reflect higher costs of labor, maintaining facilities and all those types of things.”
The burden of risk-sharing payments may be so high that colleges elect to opt out of the federal student loans program entirely, she added: “Ultimately it would have an impact on lower-income students who have a need both for a Pell Grant and a direct loan to help them meet their cost of attendance.”
Of colleges that enrolled 70 percent or more low-income, Pell-eligible students, 96 percent would have to pay a risk-sharing penalty and 91 percent would lose money over all when PROMISE Grant is factored in, according to the American Council on Education’s analysis of the House data.
The committee countered that finding with its own analysis of the data, sent to Inside Higher Ed, showing how colleges that enroll the highest share of low-income students should see about $99 more per student, while those that enroll the lowest share would lose about $66 per student.
The ACE analysis as well as the committee’s data are among the few studies that show the estimated impact of the previously proposed risk-sharing plan. None have been updated yet to reflect the latest iteration.
Another analysis from Cooper, the AEI fellow, estimated that public institutions as a whole should get more money under the plan, but private nonprofits are expected to face a substantial penalty.
Although critics point to how the plan would affect individual institutions, particularly small, underresourced schools, proponents argue that the focus should be on the impact to higher education over all, and that colleges can lower their costs to see a payoff.
“Because the net gains are significantly larger, the sector as a whole sees a net gain even though more institutions have net losses,” Cooper said. “So, the upside for institutions here is that there are significant rewards available to those which can improve their outcomes.”
At the end of the day, it’s all about how you choose to look at the data.
“I would just like to see [the formula of risk-sharing] play out for a couple of hypothetical colleges based on data that has some bearing on reality,” said Delisle from Urban Institute. “And that’s a hard thing to come by right now.”
Since the release of ChatGPT in 2022, instructors have worried about how students might circumvent learning by utilizing the chat bot to complete homework and other assignments. Over the years, the large language model has enabled AI to expand its database and its ability to answer more complex questions, but can it replace a student’s efforts entirely?
Graduate students at the University of Illinois at Urbana-Champaign’s college of engineering integrated a large language model into an undergraduate aerospace engineering course to evaluate its performance compared to the average student’s work.
The researchers, Gokul Puthumanaillam and Melkior Ornik, found that ChatGPT earned a passing grade in the course without much prompt engineering, but the chat bot didn’t demonstrate understanding or comprehension of high-level concepts. Their work illustrating its capabilities and limitations was published on the open-access platform arXiv, operated by Cornell Tech.
The background: LLMs can tackle a variety of tasks, including creative writing and technical analysis, prompting concerns over students’ academic integrity in higher education.
Researchers sought to understand how a student investing minimal effort would perform in a course by offloading work to ChatGPT.
The evaluated class, Aerospace Control Systems, which was offered in fall 2024, is a required junior-level course for aerospace engineering students. During the term, students submit approximately 115 deliverables, including homework problems, two midterm exams and three programming projects.
“The course structure emphasizes progressive complexity in both theoretical understanding and practical application,” the research authors wrote in their paper.
They copied and pasted questions or uploaded screenshots of questions into a free version of the chat bot without additional guidance, mimicking a student who is investing minimal time in their coursework.
The results: At the end of the term, ChatGPT achieved a B grade (82.2 percent), slightly below the class average of 85 percent. But it didn’t excel at all assignment types.
On practice problems, the LLM earned a 90.4 percent average (compared to the class average of 91.4 percent), performing the best on multiple-choice questions. ChatGPT received a higher exam average (89.7 percent) compared to the class (84.8 percent), but it faltered much more on the written sections than on the autograded components.
ChatGPT demonstrated its worst performance in programming projects. While it had sound mathematical reasoning to theoretical questions, the model’s explanation was rigid and template-like, not adapting to the specific nuances of the problem, researchers wrote. It also created inefficient or overly complex solutions to programming, lacking “the optimization and robustness of considerations that characterize high-quality student submissions,” according to the article.
The findings demonstrate that AI is capable of passing a rigorous undergraduate course, but that LLM systems can only accomplish pattern recognition rather than deep understanding. The results also indicated to researchers that well-designed coursework can evaluate students’ capabilities in engineering.
So what? Based on their findings, researchers recommend faculty members integrate project work and open-ended design challenges to evaluate students’ understanding and technical capabilities, particularly in synthesizing information and making practical judgements.
In the same vein, they suggested that faculty should design questions that evaluate human expertise by requiring students to explain their rationale or justify their response, rather than just arrive at the correct answer.
ChatGPT was also unable to grasp system integration, robustness and optimization over basic implementation, so focusing on these requirements would provide better evaluation metrics.
Researchers also noted that because ChatGPT is capable of answering practice problems, instruction should focus less on routine technical work and more on higher-level engineering concepts and problem-solving skills. “The challenge ahead lies not in preventing AI use, but in developing educational approaches that leverage these tools while continuing to cultivate genuine engineering expertise,” researchers wrote.
