The Trump administration’s directives on diversity, equity and inclusion have wreaked havoc across the higher education landscape. Confusion persists about whether all DEI activities are forbidden or just ones that are officially illegal. To top it off, there’s much bewilderment about what exactly constitutes an “illegal DEI” activity.
The ambiguity is a feature, not a bug. When people are confused about what’s legal or not, they’ll overcorrect out of fear. As a result, we see colleges and universities scrubbing DEI websites and cutting diversity-related programming. The outcome? A hasty, often over-the-top retreat from efforts that serve students and faculty alike.
Critically, some of the programs deemed illegal by the Trump administration have not been ruled unlawful in the courts, such as scholarships and prizes that consider race or ethnicity in the selection process. The more accurate term to describe them is “vulnerable” rather than “illegal.” In Students for Fair Admissions v. Harvard, the Supreme Court specifically struck down a form of race-conscious admissions. While a court technically could apply SFFA in the future to render consideration of race in scholarships and recruitment efforts illegal, that day has yet to come, despite the current administration’s faulty interpretation of the ruling.
Even Ed Blum, who organized the SFFA lawsuits, acknowledges this distinction, as reported in Inside Higher Ed: “Blum doesn’t actually believe the [SFFA] decision itself extends to those programs [e.g., race-conscious scholarships, internships or pre-college programs]. He does think they’re illegal—there just hasn’t been a successful case challenging them yet.”
“I haven’t really made myself clear on this, which is my fault,” Blum told Inside Higher Ed in February, “but the SFFA opinion didn’t change the law for those policies.”
So what does that mean for colleges and universities? The fuzziness over the legality of traditional race-conscious scholarships and recruitment programs will remain until the question is decided by the courts. While the majority ruling in SFFA led some to assume that all race-conscious programs will be deemed unconstitutional, the outcome is unknown. Courts could view the stakes or dynamics of nonadmissions programs (e.g., scholarships, outreach) as differing enough from the hypercompetitive context of selective college admissions to allow continued consideration of race. Institutions and organizations could also argue that race-conscious programs are needed to address specific, documented historic discrimination. This argument is different from defending race-conscious initiatives due to broad societal discrimination, as noted by the nonpartisan Congressional Research Service.
Likely, many institutions and organizations will move away from using race/ethnicity in the selection process for scholarships and other nonadmissions programs, out of fear of litigation and threats of federal funding being withdrawn. However, they may retool selection processes to consider factors related to their missions and goals, such as prioritizing those who show a commitment to supporting historically underserved populations. Further, if the ruling in SFFA is going to be used to attack nonadmissions programs, we can’t forget that it also affirms the right of programs to consider individuals’ experiences related to race. As Chief Justice John Roberts wrote, “Nothing in this opinion should be construed as prohibiting universities from considering an applicant’s discussion of how race affected his or her life, be it through discrimination, inspiration, or otherwise.”
The Ph.D. Project, the focus of Title VI investigations by the Department of Education, is an example of a program that was, in prior iterations, vulnerable but not necessarily illegal. The department announced last month that it had launched investigations of 45 universities over their partnerships with the Ph.D. Project, alleging that the nonprofit, which offers mentorship, networking and support for prospective Ph.D. candidates in business, “limits eligibility based on the race of participants.”
The Ph.D. Project has already said that it changed its eligibility criteria earlier this year to be open to anyone who “is interested in helping to expand and broaden the pool of [business] talent”—so what will become of the investigations? Quite possibly, the Education Department will accuse institutions of breaking the law for partnering with an outreach program that in prior iterations considered race in its selection process—which is how the department likes to interpret SFFA, but that is still unsettled legal territory. Courts likely won’t hear a case on the Ph.D. Project because the program has already changed its selection criteria, so we still won’t know whether it’s legal or not to consider race in outreach programs. Until that question goes to court, we’ll probably have institutional decision-making driven more by the chilling effects of the Title VI investigations as opposed to actual law.
While programs that consider race in selection criteria are vulnerable, there are plenty of diversity-related programs and initiatives that are not, or should not be as long as they are open to all students. Programs like speaker series, workshops, lunch and learns, training programs, cultural events, resource websites, racial/ethnic or culturally focused student organizations, administrative infrastructure, and task forces related to advancing a more supportive and inclusive environment—all of these can continue to play a critical part in advancing an institution’s mission and goals.
In spite of this, the Trump administration recently proclaimed that DEI programs fuel “division and hatred” and ordered Harvard to “shutter such programs.” However, in previous communications, even the Trump administration has recognized that common DEI initiatives “do not inherently violate federal civil rights laws,” as noted by a group of leading law faculty. The directive to Harvard is serious overreach on multiple levels. We can only hope that Harvard will not capitulate to the administration’s demands and will defend its rights as an institution.
Over all, institutions must resist panic-driven overcorrections. When vulnerable programs are threatened, institutions with the resources to do so should defend them in court. In other circumstances, retooling programs, rather than eliminating them, may be necessary. Institutions should not abandon diversity, equity and inclusion efforts out of fear; instead, they should seek to support diversity both lawfully and well.
The Trump administration’s strategy is clear: sow doubt and encourage institutions to retreat. Instead of gutting diversity-related efforts wholesale, institutions need to take a more thoughtful approach. Our students depend on it, and so does the future of education.
Julie J. Park is a professor of education at the University of Maryland, College Park, and served as a consulting expert on the side of Harvard College in SFFA v. Harvard. She is the author of the upcoming book Race, Class, and Affirmative Action: A New Era in College Admissions, as well as two other books on race-conscious admissions.
Last month the government cut $400 million in federal funding for Columbia University and sent a list of demands the university would have to meet to get it back. Among them: “deliver a plan for comprehensive admission reform.”
The administration sent a similar letter earlier this month to Harvard University after freezing $9 billion in funding, demanding that the university “adopt and implement merit-based admissions policies” and “cease all preferences based on race, color, ethnicity or national origin in admissions.”
And in March the Department of Justice launched investigations into admissions practices at Stanford University and three University of California campuses, accusing them of defying the Supreme Court’s decision banning affirmative action in June 2023’s Students for Fair Admissions v. Harvard.
Exactly what the Trump administration believes is going on behind closed doors in highly selective college admissions offices remains unclear. The University of California system has been prohibited from considering race in admissions since the state outlawed the practice in 1996, and both Harvard and Columbia have publicly documented changes to their admissions policies post-SFFA, including barring admissions officers from accessing the applicant pool’s demographic data.
Regardless, given the DOJ investigations and demands of Columbia and Harvard—not to mention potential demands at newly targeted institutions like Princeton, Northwestern and Brown—the federal government appears set to launch a crusade against admissions offices.
A spokesperson for the Education Department did not respond to multiple questions from Inside Higher Ed, including a request to clarify what “comprehensive admission reform” means and what evidence the administration has that admissions decisions at Columbia and Harvard are not merit-based, or that they continue to consider race even after the SFFA ruling.
Columbia acquiesced to many of the Trump administration’s demands, but it’s not clear if admissions reform is one of those concessions. When asked, a Columbia spokesperson said that “at this moment” the university had nothing to add beyond the university’s March 21 letter to the administration.
In that letter, Columbia officials wrote that they would “review our admissions procedures to ensure they reflect best practices,” adding that they’d “established an advisory group to analyze recent trends in enrollment and report to the President” on “concerns over discrimination against a particular group.”
Interestingly, Columbia officials also wrote that they would investigate “a recent downturn in both Jewish and African American enrollment.”
A Harvard spokesperson told Inside Higher Ed that the university’s “admissions practices comply with all applicable laws,” but they declined to answer additional questions about potential changes to admission policies or whether they’d received clarification from the Trump administration.
Angel Pérez, president of the National Association for College Admission Counseling, said the vague demands on college admissions offices are intentional, and that the administration is “setting institutions up for failure.”
“Institutions are certainly going to defend their process, but it’s going to be chaotic and it’s going to be noisy … it’s almost like we are seeing SFFA play itself out all over again,” he said. “Is there the potential that it could change some things about the [admissions] process? Absolutely. We just don’t know what that would look like.”
Orwell in the Reading Room
If the Trump administration’s specific grievances with selective admissions are murky, then its plan to enforce “reform” is downright opaque. However, officials have offered some hints.
In a December op-ed in The Washington Examiner, which outlined a plan that so far reflects the Trump administration’s higher education agenda with uncanny accuracy, American Enterprise Institute fellow Max Eden suggested “a never-ending compliance review” targeting Harvard and others to enforce the SFFA ruling. In his view, admissions officers should not discuss applicants or make decisions without a federal agent present to ensure they don’t even obliquely discuss race.
“[They] should assign Office of [sic] Civil Rights employees to the Harvard admissions office and direct the university to hold no admissions meeting without their physical presence,” Eden wrote. “The Office of Civil Rights should be copied on every email correspondence, and Harvard should be forced to provide a written rationale for every admissions decision to ensure nondiscrimination.”
Eden now works for the Trump administration, though it’s not clear in what capacity. Inside Higher Ed located a White House email address for him, but he did not respond to several interview requests in time for publication.
Edward Blum, the president of Students for Fair Admissions and the architect of the affirmative action ban, told Inside Higher Ed he thinks rigorous federal oversight of admissions offices is sorely needed.
“Requiring competitive colleges and universities to disclose in granular detail their admissions practices to various federal agencies is an important and wise decision,” he wrote in an email.
Pérez said that level of intrusion on a college admissions office’s process would effectively destroy the profession.
“If that were to happen, I can unequivocally tell you that we are not going to have people who want to do this work,” he said. “We know how critically important it is. But how many more headwinds can they face before they begin to ask themselves, is this really worth it?”
Crusade in Search of a Problem
Test-optional admissions policies are likely to become a magnet for federal scrutiny. In a February Dear Colleague letter instructing colleges to eliminate all race-conscious programming, the Education Department wrote that test-optional policies could be “proxies for race” to help colleges “give preference” to certain racial groups.
Personal essays may also fall under the Trump administration’s microscope. Hard-line affirmative action critics have suggested that colleges may be effectively circumventing the Supreme Court’s ban by imputing an applicant’s race from their essays. Chief Justice John Roberts’s majority opinion said that practice should be tolerated as long as an applicant’s identity is considered in the context of their personal journey. But his vaguely self-contradictory language—he added a caveat that said essays should not be used as a “proxy” for racial consideration—has engendered fierce debate over the role of the essay in applicant reviews.
Last month the University of Austin, an unaccredited new college in Texas with ideologically conservative roots, announced it would consider only standardized test scores when admitting applicants, disregarding essays, GPA and recommendation letters.
“Admissions at elite colleges now come down to who you know, your identity group or how well you play the game,” a university official wrote in announcing the policy. “This system rewards manipulation, not merit.”
Blum suspects many selective colleges of disregarding the affirmative action ban and said he was especially skeptical of those that reported higher or stable enrollments of racial minorities this fall, including Yale, Duke and Princeton. In an interview with Inside Higher Ed in February, he said he expects those institutions to invoke scrutiny from the courts and the Trump administration.
But both Columbia and Harvard reported declines in underrepresented minority enrollment last fall, especially Black students. At Harvard, Black enrollment fell by 4 percentage points, from 18 percent for the Class of 2027 to 14 percent of the Class of 2028; at Columbia Black enrollment fell by 12 points, from 20 percent to 8 percent. (This paragraph has been updated to correct Harvard’s Black enrollment figures.)
Pérez said that colleges that reported higher underrepresented minority enrollment have a simple explanation: demographic trends.
“The truth is that the majority of students applying to institutions right now are incredibly diverse and will only get more diverse,” he said. “You’re putting colleges in an impossible position if you’re penalizing them for having a more diverse applicant pool.”
Eric Staab, vice president of admissions and financial aid at Lewis & Clark College in Portland, Ore., said his institution isn’t concerned about drawing the Trump administration’s ire, despite going test-blind this year and maintaining a stable level of racial diversity.
For one, he said, he’s not sure the Office for Civil Rights will be staffed well enough to take on more than a handful of target institutions after the Education Department’s mass layoffs last month. Even if it is, Staab said he’s confident that post-SFFA, investigators wouldn’t find anything illegal or even objectionable at Lewis & Clark.
“Admissions has always been a merit-based process … with the [SFFA decision], pretty much all of us needed to do some tweaking or major overhaul of our admissions and financial aid policies, and we did that,” he said. “I’m not worried about them sending people into reading sessions, because we have nothing to cover up.”
But Pérez said there could be a broader chilling effect across admissions offices if the Trump administration pursues a more aggressive approach to its “admissions reform” agenda.
“Institutions are asking questions of the DOJ and other departments to try to get clarity, but therein lies the challenge: They have not been given clarity, so they don’t know how to prepare,” he said. “That lack of clarity is causing chaos.”
The University of North Carolina at Chapel Hill’s provost is stepping down next month to return to the faculty there, a development that news articles last week suggested is tied to his disagreement with hiring practices at the School of Civic Life and Leadership, or SCiLL.
In a statement Friday to Inside Higher Ed, Chris Clemens, the outgoing provost, said, “I made the decision to step down as provost. During my time as provost, I’ve been able to address challenges I care deeply about and make meaningful progress. However, the issues that have arisen in recent days are not ones I can solve, and I don’t feel the same passion for them.”
His statement didn’t explain what these recent issues are, and Chapel Hill spokespeople didn’t provide further information beyond campus chancellor Lee Roberts’s April 3 announcement that Clemens had decided to step down.
Clemens will return May 16 to being the Jaroslav Folda Distinguished Professor of Physics and Astronomy, Roberts said in that announcement. Clemens has been provost since early 2022, starting under former chancellor Kevin M. Guskiewicz, who’s now president of Michigan State University. Roberts credited Clemens with, among other things, helping establish the School of Data Science and Society, the Program for Public Discourse, and SCiLL.
SCiLL was established after Chapel Hill’s Board of Trustees passed a resolution in January 2023 asking the campus administration to “accelerate its development” of this new school. The then–board chair called SCiLL an effort to “remedy” a shortage of “right-of-center views” on campus. Controversy quickly ensued. Faculty said they didn’t know a whole school was in development.
The Republican-controlled State Legislature then passed a law requiring Chapel Hill to establish the school and hire 10 to 20 faculty from outside the university, plus make them eligible for tenure. It became one of many civics or civil discourse centers—critics have called them conservative centers—that Republican lawmakers and higher education leaders have established at public universities in recent years.
In January 2025, Clemens canceled the latest SCiLL tenure-track faculty searches before reversing course days later. Articles in The Assemblyand the conservative Real Clear Investigations have now implied that Clemens’s departure was connected to his involvement in the disagreements over hiring within SCiLL.
Clemens, a self-described conservative, had been an advocate for SCiLL. The Real Clear Investigations article was titled, before the headline was changed, “In North Carolina, Academic Conservatives Have Met the Enemy and It Is … Them.”
In his Friday statement, Clemens said, “I look forward to returning to the faculty to resume work on optical design technology, with a particular focus on applications for the SOAR telescope and astronomy. This will allow me to spend more time in the classroom—an aspect of academic life I have greatly missed.”
Can you tell fact from fiction online? In a digital world, few questions are more important or more challenging.
For years, some commentators have called for K-12 teachers to take on fake news, media literacy, or online misinformation by doubling downon critical thinking. This push for schools to do a better job preparing young people to differentiate between low- and high-quality information often focuses on social studies classes.
As an education researcher and former high school history teacher, I know that there’s both good and bad news about combating misinformation in the classroom. History class can cultivate critical thinking – but only if teachers and schools understand what critical thinking really means.
Not just a ‘skill’
First, the bad news.
When people demand that schools teach critical thinking, it’s not always clear what they mean. Some might consider critical thinking a trait or capacity that teachers can encourage, like creativity or grit. They could believe that critical thinking is a mindset: a habit of being curious, skeptical and reflective. Or they might be referring to specific skills – for instance, that students should learn a set of steps to take to assess information online.
Unfortunately, cognitive science research has shown that critical thinking is not an abstract quality or practice that can be developed on its own. Cognitive scientists see critical thinking as a specific kind of reasoning that involves problem-solving and making sound judgments. It can be learned, but it relies on specific content knowledge and does not necessarily transfer between fields.
Early studies on chess playersand physicists in the 1970s and ’80s helped show how the kind of flexible and reflective cognition often called critical thinking is really a product of expertise. Chess masters, for instance, do not start out with innate talent. In most cases, they gain expertise by hours of thoughtfully playing the game. This deliberate practice helps them recognize patterns and think in novel ways about chess. Chess masters’ critical thinking is a product of learning, not a precursor.
Because critical thinking develops in specific contexts, it does not necessarily transfer to other types of problem-solving. For example, chess advocates might hope the game improves players’ intelligence, and studies do suggest learning chess may help elementary students with the kind of pattern recognition they need for early math lessons. However, research has found that being a great chess player does not make people better at other kinds of complex critical thinking.
Historical thinking
Since context is key to critical thinking, learning to analyze information about current events likely requires knowledge about politics and history, as well as practice at scrutinizing sources. Fortunately, that is what social studies classes are for.
Social studies researchers often describe this kind of critical thinking as “historical thinking”: a way to evaluate evidence about the past and assess its reliability. My own research has shown that high school students can make relatively quick progress on some of the surface features of historical thinking, such as learning to check a text’s date and author. But the deep questioning involved in true historical thinking is much harder to learn.
Social studies classrooms can also build what researchers call “civic online reasoning.” Fact-checking is complex work. It is not enough to tell young people that they should be wary online, or to trust sites that end in “.org” instead of “.com.” Rather than learning general principles about online media, civic online reasoning teaches students specific skills for evaluating information about politics and social issues.
Still, learning to think like a historian does not necessarily prepare someone to be a skeptical news consumer. Indeed, a recent study found that professional historians performed worse than professional fact-checkers at identifying online misinformation. The misinformation tasks the historians struggled with focused on issues such as bullying or the minimum wage – areas where they possessed little expertise.
Powerful knowledge
That’s where background knowledge comes in – and the good news is that social studies can build it. All literacy relies on what readers already know. For people wading through political information and news, knowledge about history and civics is like a key in the ignition for their analytical skills.
Readers without much historical knowledge may miss clues that something isn’t right – signs that they need to scrutinize the source more closely. Political misinformation often weaponizes historical falsehoods, such as the debunked and recalled Christian nationalist book claiming that Thomas Jefferson did not believe in a separation of church and state, or claims that the nadir of African American life came during Reconstruction, not slavery. Those claims are extreme, but politicians and policymakers repeat them.
For someone who knows basic facts about American history, those claims won’t sit right. Background knowledge will trigger their skepticism and kick critical thinking into gear.
Past, present, future
For this reason, the best approach to media literacy will come through teaching that fosters concrete skills alongside historical knowledge. In short, the new knowledge crisis points to the importance of the traditional social studies classroom.
But it’s a tenuous moment for history education. The Bush- and Obama-era emphasis on math and English testing resulted in decreased instructional time in history classes, particularly in elementary and middle schools. In one 2005 study, 27% of schools reported reducing social studies time in favor of subjects on state exams.
Attempts to limit students’ knowledge about the past imperil their chances of being able to think critically about new information. These attacks are not just assaults on the history of the country; they are attempts to control its future.
Joseph Morrison-Howe is an undergraduate Economics student at the University of Nottingham. He completed an internship with HEPI during the summer of 2024. In this weekend long read, he discusses the history of marketisation in higher education and considers whether applicants have enough information to make informed judgements about where and what they study.
Executive summary
Study at university can be hugely beneficial for students intellectually, socially and financially. However, degrees that lead to low earnings can make individuals who study in higher education financially worse off and can impose an external cost on the taxpayer. This HEPI Policy Note uses the economic framework of market failure to argue it is likely that too many students are studying degrees that result in low earnings. Applicants should be free to choose a course according to their preferences but, they need to be encouraged to use salary outcome data to help them make an informed decision about what degree to study.
Key findings:
Existing data suggest that one in five graduates would have been financially better off not entering higher education at all. Some 40% of undergraduate students might have chosen a different route, although only 6% would not have entered higher education.
This report argues that reforms announced in 2022 to the repayment terms of student loans, from the old Plan 2 to the new Plan 5 system, will likely make university financially worthwhile for fewer students.
The graduate premium, the difference between the earnings of graduates and non-graduates, is also likely to decrease as the National Living Wage increases the wages of non-graduates.
This report proposes imperfect information as a possible cause of market failure. Prospective students should make best use of information about graduate earnings when choosing what, where or whether to study at university. The official website for information about higher education, Discover Uni, had less than 7,000 website visits in July of 2024. In the same month, nearly half a million visited the website of the Complete University Guide, an online university league table.
Policy recommendations:
Discover Uni data about graduate earnings should be displayed on UCAS so that more students use this information when making decisions about university studies.
Satisfied average graduate earnings for each course should be displayed alongside the annual salary for National Living Wage work and the average graduate and non-graduate salaries. This should help students judge if studying individual courses would be financially worthwhile.
Careers advisors should support applicants to be fully informed about the benefits of higher education – including that not everyone is financially better off for attending university.
Market analysis and higher education
Prior to the 1830s, one would be hard-pressed to convincingly describe higher education in England as a competitive market – a place where many buyers choose to buy goods or services from many sellers, who compete to win the choice of these buyers. The Universities of Oxford and Cambridge maintained a duopoly (a market dominated by two sellers) for nearly 500 years.[i] Since the early nineteenth century, changes in government policy, alongside growth in the number of universities and students, have meant higher education in England has taken on more of the characteristics of a market.
The barriers to becoming a university in England have decreased over time and choice for students has broadened. Prior to the Coalition Government of 2010, the following changes happened to the higher education sector which incidentally laid the foundation for marketisation:
Growth in the number of universities, which provided more choice for students;
growth in student numbers; and
the formation of UCAS (originally UCCA, the Universities Central Council on Admissions), providing a ‘single nationwide application process’, creating a sector that resembled a marketplace.[ii]
It was the introduction and gradual increase of tuition fees paid by the student as opposed to funding via grants from the Government that really introduced market incentives to higher education in England.
By the 1990s, with growing demand from students, the government’s ability and willingness to fund the higher education sector came into question; between 1976 and 1996, government funding per student fell by 40%, according to the Dearing Report.[iii] As a result, the greater burden for funding higher education fell on students. Tony Blair’s government introduced ‘top-up’ fees of £1,000 paid upfront by students in 1998 to supplement government funding. In 2004, the fees rose to £3,000, covered by an income-contingent loan.
The Coalition Government’s rise in tuition fees to £9,000 caused the most significant change in the structure of the higher education sector in England. This is because, as David Willetts (then University Minister) wrote, the new higher fees largely
replaced funding via a Government agency providing grants to universities with funding via the fees (funded by loans) which students brought with them.[iv]
Consequently, to attract funding for teaching, universities had to compete to attract students, as the funding came directly from students. The Department for Business, Innovation and Skills (BIS) wanted ‘to ensure that the new student finance regime supports student choice, and that in turn student choice drives competition’.[v] The characteristics of choice and competition that BIS wanted to introduce are the key characteristics of a market.
The new funding model increased competition between universities for students, first because they received funding for each student they taught and secondly, because these policy changes allowed for the removal of student number caps, which had thus far artificially limited the number of places institutions could provide. More places were made available and students were given more meaningful choice about where to study.
The increasing number of universities and the introduction of UCCA were not policies intended to create a market, but there is evidence from the coalition government of purposeful marketisation. The 2011 white paper ‘Students at the Heart of the System’ from BIS showed their clear intention to introduce what they referred to as ‘a more market-based approach’ to higher education with the new funding system.[vi] The Coalition Government’s support for the new funding system was not just as a solution to the instability and underfunding of the grant-based system but because of the market incentives a fee-based funding model would introduce.
Not all aspects of the current higher education sector in England operate like a typical market. Entry requirements mean that students’ ability to choose between universities is contingent on the grades they achieve (but the growth in the number of universities means that for a given set of grades, a student can choose between many universities). Also, students only bear the cost of their studies if they can afford to do so, as student loan repayments are only made above a particular level of earnings. In typical markets, consumers bear the cost upfront. Though important for making university studies accessible, we will see, the fact that payment is not made upfront makes the sector vulnerable to market failure.
Despite these qualities, it is clear the sector has been marketised:
students now have more choice, and
universities now engage in more competition.
There are lots of reasonable critiques of marketisation. Nevertheless, since marketisation has taken place, it can be useful to apply economic analysis to higher education. This report considers the higher education sector as a market and consequently uses economic analysis to assess if the higher education sector works efficiently for both students and wider society. The purpose of this economic analysis is to identify how to improve the higher education sector so it works best for students and wider society.
Markets and market failure in higher education
Marketisation policies introduce characteristics of a market in the hopes that the outcomes of a market will materialise. The prized outcome of markets is efficiency. An efficient market is one where the resources are allocated to give the best outcomes for society; choice allows the allocation of students to the university that best suits them, and competition incentivises the allocation of university funds where they will most improve the institution. If a market is efficient, the allocation of resources cannot be changed to make someone better off without making someone else worse off.
The outcome of markets is not always efficient; markets are prone to fail.
Market failure occurs when resources are not allocated efficiently, to give the best outcomes for the consumer and wider society.
A market failure usually results in:
too much of a good being provided;
too little of a good being provided; or sometimes,
none of a certain good being provided at all.
One example of market failure might be the market for antibiotics. If antibiotics are cheap to buy, people might purchase them even if they are not sure they need them. Over time, the overuse of antibiotics can lead to the development of antibiotic resistance, where antibiotics no longer work for the people who really need them. This is a case where market failure has led to a good being provided in excess and a more efficient outcome would see less of it provided.
This report focuses on the higher education market failing and allocating too many students to degrees that result in low earnings. In this section, I discuss how students studying degrees that lead to low earnings can result in market failure, under certain conditions. In the next section, I will analyse a possible cause of this market failure.
Market failure: degrees that lead to low earnings
For the majority of graduates, studying at university gives them — and the wider economy — good financial returns. However, the market fails and allocates too many students to courses that will lead to low graduate earnings (‘low-earning degrees’). This makes individual graduates financially worse off, compared to if they had not gone to university, and imposes an external cost on the taxpayer.11 In this case the choice of degree (or to study at all) has led to suboptimal outcomes for the individual (the student) and wider society and is therefore a case of market failure.
There is evidence to suggest many students believe they would have been individually better off making a different choice of degree, institution or even entire pathway (such as doing an apprenticeship instead). In the 2024 HEPI / Advance HE Student Academic Experience Survey, four in ten students said they would have been better with a different choice (though only 6% would not have entered higher education).[vii] This suggests these students think there was a more efficient way of allocating (their own) resources even before they know what their lifetime earnings will be.
Not all degrees that result in low earnings are necessarily cases of market failure. There is only a market failure present if there could have been a better allocation of resources, that is, students could have made a different choice that bettered themselves or wider society.
It is likely many students do not just think about earnings when they consider the value of their degree. If the individual valued their Philosophy degree for other reasons – they enjoyed the content, valued the overall university experience, and so on – it may still have been worth it for them even if it did not increase their earnings. In this case, a degree like Philosophy may have been the best option for society if these benefits to the individual student outweigh the lower earnings (and another other costs to both the student and wider society). If so, the allocation would still be efficient and this would not be a case of market failure.
Another situation where a low-earning degree may not be a case of market failure is when the degree has such large social (as opposed to individual) benefits that the choice of any other alternative would lead to a worse outcome for society. For example, if a student studies to be a social worker and this leads to low earnings, the benefits to society that stem from the social work degree will be large enough that any other choice on the student’s behalf would have made society worse off.
The examples of Philosophy and Social Work degrees are not cases of market failure because of the benefits they offer to either the individual or the rest of society. These benefits are not easily quantifiable, so it is difficult to determine which low-earning degrees are examples of market failure and which are not. Below, I will argue that if students are given clear information about the earnings from different degrees, they will be more capable of making that judgement themselves.
The effect of too many students studying low-earning degrees (before reforms to loan repayment terms)
For individual students, there is a financial consequence of choosing to study a degree that will likely result in low earnings. A 2020 report by the Institute for Fiscal Studies (IFS) looked into the impact of undergraduate study on lifetime earnings. The report estimated that ‘one in five undergraduates would have been better off financially had they not gone to university.’[viii]
The IFS compared the lifetime earnings of a cohort of graduates to a counterfactual group that did not attend university, accounting for the difference in income tax, National Insurance and student loan repayments the graduates will have paid over their working life compared to the non-graduates. They then calculated the net lifetime returns for graduates, defined as ‘the lifetime gain or loss in earnings as a result of attending higher education for the individual, after taking into account the effect of the tax and student loans system.’[ix] The IFS found that a fifth of graduates earn less over their lifetimes than if they had not entered higher education.
Not all of the 20% of graduates that would have been better off had they not entered higher education will be cases of market failure. Some may be a Philosophy student that places a high personal value on the knowledge they gained, some may be social workers that provide great value for society, others may have studied a high earning degree and not utilised it. Furthermore, changing the discount rate the IFS use changes the proportion of students that finically benefited from higher education, as David Willetts points out. [x] Though, the IFS results are clear that not everyone entering higher education benefits from it financially.
When students choose to study a low-earning degree, there is also an external cost to the taxpayer. This external cost (a cost to a third party not involved in the transaction) arises because the taxpayer must cover the proportion of a student loan which a graduate has not paid back by the time their loan is written off. Prior to the implementation of reforms in the repayment terms of student loans announced in 2022, only 27% of graduates were estimated to repay their student loan in full.[xi]
The resource allocating and budgeting (RAB) charge is used to estimate the ‘cost to Government of borrowing to support the student finance system’. London Economics, an economics consultancy, estimated that the RAB charge for the 2022/23 cohort of students (who began their studies before the implementation of the 2022 reforms) was 10.2%. That is, the government was expected to cover 10.2% of the total value of the student loans taken out that year.[xii]
These costs, imposed on the student and wider society, might be avoided if students chose different degrees. Future earnings can be altered by a student’s choice of course to study and choice of institution to study at:
Even when comparing students with similar prior attainment and family background, different degrees appear to have a significantly different impact on early career earnings. Studying medicine or economics increases earnings five years after graduation by 25 per cent more than studying English or history. Attending a Russell Group university increases earnings by about 10 per cent more than the average degree.[xiii]
If students who chose to study low-earning degrees had instead chosen to study higher-earning degrees, they would have been less likely to impose an external cost on the taxpayer. Though, as I will explain, reforms to the student loan system mean the external cost to the taxpayer is now very small. Importantly, those students would also be more likely to give themselves positive net lifetime returns to their studies. These outcomes could make society better off. The current allocation of too many students to degrees that result in low earnings is an inefficient one. In the sense defined above, the higher education market is failing.
The impact of the reforms to the repayment terms of student loans (the move from Plan 2 to Plan 5)
The reforms announced in 2022 to the ‘Plan 2’ repayment terms on student loans have shifted the financial burden of low-earning degrees from the taxpayer to the graduate.
Under the new Plan 5 system, the income threshold at which graduates begin to make loan repayments was lowered from £27,295 to £25,000, the repayment period (after which loans are written off) was lengthened from 30 years to 40 years and the interest rate on student loans was reduced from RPI+3% down to just RPI (a measure of inflation).[xiv] These reforms have an uneven effect on graduates across the income distribution.[xv] The reduction in the repayment threshold will mean that lower-earning graduates will pay back more of their debt, and some will begin to pay it back for the first time. The lengthening of the repayment period will mean that low-earning graduates will pay back their loan for longer. The lowering of the interest rate will mean that high-earning graduates (who always would have paid back their loan in full) will now make smaller interest payments.
London Economics estimates that the RAB charge under the new terms of repayment will fall to 4.1% from 10.2%. This means that the reforms have transferred the costs of low-earning degrees from the government, which will now have to write off less debt, to the graduate, who must pay back more of it. As low-earning graduates will now make larger student loan repayments, attending university will not be financially worthwhile for more of them.
A fair assumption is that, since costs are only incurred in the future, prospective students will not be very responsive to these reforms by choosing low-earning degrees in lower numbers. Even after maximum fees were raised from around £3,000 to £9,000 in 2012, there was no significant long-term decrease in the number of applicants.[xvii] If this is the case, a greater proportion of students will now have negative net lifetime returns from their studies. Therefore, for this reform to have a positive outcome on low-earning graduates, these impacts would have to be available and clearly explained to prospective students.
The graduate premium and positive financial returns
The graduate premium is the increase in salary attributed to achieving a degree. To receive positive financial returns from studying, one’s graduate premium must be larger than their loan repayments and increased income tax and National Insurance payments. There is evidence to suggest that the graduate premium has fallen as the higher education sector has grown. Due to increases in the minimum wage, I believe the graduate premium is likely to fall further. This is likely to put a strain on the amount of students experiencing positive financial returns.
As the number of graduates increased throughout the 20th and into the 21st century, it was thought that the graduate premium would decrease. This is, in part, because as the supply of graduates increased their scarcity reduced meaning the premium an employer would pay to hire a graduate over a non-graduate should have fallen. A 2021 study by the Higher Education Statistics Agency (HESA) and a team at the University of Warwick found early evidence of a 7-percentage point decline in the graduate premium.[xviii]
Recent increases in the National Living Wage are likely to further reduce the graduate premium by increasing the average wage of non-graduates. To make the UK a high-wage economy, the Government has been using National Minimum Wage legislation to increase the pay of the lowest paid. In 2020, the Conservative Government asked the Low Pay Commission to ensure the National Living Wage was two-thirds of median earnings by 2024, a target which has now been met.19 Assuming non-graduates are more likely than graduates to earn the National Living Wage. As National Living Wage has increased in relation to median pay, the average wage of non-graduates will have likely increased more than that of graduates. The graduate premium is likely to have further declined. As a result, for more students, it will not have been financially worthwhile to attend university.
Conclusion
In this section, I argue that there is a market failure and too many students are choosing to study degrees that result in low earnings. The reforms to the repayment terms of student loans and a possible decline in the graduate premium are likely to increase the proportion of graduates who are financially worse off for having gone to university. The next section of this Policy Note attempts to explain why this market failure of too many students choosing to study low-earning degrees is taking place.
The causes of market failure in higher education
This section will look at imperfect information as a possible cause of the market failure. There are other possible causes, such as low teaching quality or the fact that an individual student’s decision about whether and where to study also has effects on wider society. The government’s provision of information about graduate salaries is thought to have solved the problem of imperfect information. But this Policy Note focuses on imperfect information because prospective students are not seeing the information about graduate salaries.
Imperfect information occurs when all the parties in a transaction do not have full information about the transaction. If applicants do not know about the career prospects of a low earning degree, they may choose to study it thinking it will enhance their career prospects and then struggle to find a well-paying job after graduation. This could cause an inefficient allocation of students to courses.
People familiar with the higher education sector could likely name the universities that frequently top league tables and which subjects generally lead to high earnings. They may therefore may believe that applicants have roughly enough information to choose the best course for them. This knowledge is not common for all applicants, particularly for applicants who will be the first in their family to attend university (now roughly two-thirds of current undergraduates).[xx] An A-level student who I tutor recently demonstrated that some applicants do not have perfect information about university courses. I asked him out of the universities he wanted to apply to, which he would most like to attend. He wanted to study Management. He said he would like to go to university x “because they have a brand-new building for the business school.” I then showed him that average earnings for Management graduates 5 years after completing university x’s course were over £20,000 less than those of another university he planned to apply to. After this conversation, he chose not to apply to university x. Not all applicants have sufficient knowledge about university courses and this can cause them not to choose the course that would have been best for them.
While introducing marketising reforms since 2010, successive governments have been keen to ensure that applicants do not have imperfect information. A 2016 white paper stated an ambition for ‘more competition and informed choice into higher education’.[xxi]
As a result, prospective students now arguably have access to enough information to make informed choices. The official website for information about higher education, Discover Uni (formally Unistats) provides a wealth of information to prospective students. Discover Uni has information on student satisfaction, the entry grades of past students and information about career prospects for each course at a given university. Data from the Graduate Outcomes Survey and the Longitudinal Educational Outcomes data set are used to provide prospective students with information about the employment rate of past graduates and their earnings 15 months, three years and five years after completing a course. The wealth of information available to prospective students suggests that imperfect information cannot be the reason for too many students choosing courses that will lead to them earning less over a lifetime than if they had not studied at all.
Although prospective students have access to information about employment prospects on the Discover Uni website, few choose to use it. In July 2024, only 6,600 people visited the website.22 In the same month, 481,800 people visited the website of The Complete University Guide, an online university league table, suggesting rankings like these are used more often to make decisions about what and where to study. In the same month, 1,100,000 people visited the UCAS website (the main way to apply for higher education in the UK), which gives an indication of just how many see the information about courses and institutions it provides.
The problem may not be imperfect information, but imperfect knowledge. That is, it is not the lack of availability of information that means too many students study degrees that are not financially worthwhile but instead that applicants are not seeing the information about employment prospects.
Ensuring students see information about graduate salaries will help to correct the market failure of too many students choosing to study low-earning degrees, but it may not fully address information problems. This is because, graduate outcomes data is not a perfect indicator of what a given prospective student will earn. Past data on graduate outcomes cannot tell a prospective student about future labour market changes. However, compared to using no data at all, graduate outcomes give prospective students a good indicator of what they are likely to earn.
Graduate outcomes data may not be currently used because students (and teachers) might not fully understand the implications of the new Plan 5 repayment system. Students may have less incentive to find out the financial returns of a degree if they think a negative return would be covered by the government ‘safety net’. It may therefore be more important than ever to explain that since the 2022 reforms, most students will pay back all or almost all of their loans themselves.
The next section of this report shall propose recommendations to improve the use of the data on Discover Uni.
Policy response
Some students are choosing to study degrees that will likely lead to them having low earnings. When applying to university, students are not using the information about graduate salaries for specific courses, provided on the Discover Uni website. Without the proper use of information about how financially worthwhile degrees are, a fifth of students choose degrees that result in them earning less over their lifetime than if they had not studied at undergraduate level.9
The choice of what and where to study is an individual one; it may depend on what dream job one had as a child, the fact one may have to stay close to home to care for a relative or because one wants to improve their lifetime earnings. Regardless of why one chooses to study a given course, as it is now the student who is most likely to pay for their studies, they should be free to choose what and where to study. However, students should be exposed to the reality that their choice of course may result in them earning less over a lifetime than if they had not studied at university. Students should be encouraged to use information about graduate outcomes and this information should be explained to them. Careers advisors should explain that not all degrees are financially worthwhile and help applicants navigate the available information on graduate salaries.
To prevent students from unknowingly choosing courses that will likely lead to them earning low salaries, information about graduate outcomes should be made more usable. Therefore, the main recommendation from this HEPI Policy Note is that all of the data on Discover Uni (the government website for data which students rarely use) should be integrated into the UCAS pages for individual courses. This includes the salary outcomes for each course, or the lowest level of granularity Discover Uni provides. This makes it more likely that students applying for a course via UCAS will use this information to better inform their decisions.
Discover Uni graduate earnings data should be stratified before it is integrated into UCAS information pages. This involves weighting graduate earnings by social background, reflecting the proportion each social group represents in the wider population. Stratification would ensure that high earnings statistics from a given course do not simply reflect a cohort dominated by already affluent students.
Alongside the average graduate salaries for specific courses, theaverage graduate and non-graduate salaries should be displayed. Prospective students could be shown the current salary for a full-time minimum wage worker of £23,795 to help them judge if going to university would be financially worthwhile.[xxiii]
[vi] Department for Business, Innovation and Skills, Students at the Heart of the System, June 2011, p.73 https://assets.publishing.service.gov.uk/ government/uploads/system/uploads/attachment_data/file/31384/11- 944-higher-education-students-at-heart-of-system.pdf
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SAN DIEGO — The higher education sector is facing an onslaught of challenges, including attacks from the Trump administration, fading public confidence and the demographic cliff. But higher education leaders didn’t shy away from these issues at the annual ASU+GSV Summit, an education and technology conference held this week in San Diego.
“The moment is actually a productive moment for us, because we can and should and will use some of the chaos in order to build new kinds of institutions, new infrastructures, new ways of thinking,” said Ted Mitchell, president of the American Council on Education, during a discussion Wednesday.
Below, we’re rounding up three key takeaways from higher education leaders on where the sector needs to go and how it can be more innovative.
Higher ed needs to refocus on student success
Mitchell pointed to multiple threats converging in the higher education sector, including eroding public confidence in colleges and universities. That forces the sector to grapple with important questions.
“What are we delivering? Is it the right thing? Is it being delivered to the right people? And is it being delivered to the right people in the right way?” Mitchell said. “I think that the answer to all of those is, ‘Not quite,’ and so that’s the existential threat.”
He pointed to the national college completion rate, which measures the share of first-time students at degree-granting institutions who complete their credentials within six years. That rate has risen slightly above 60% in recent years.
“One hundred percent of the people who come to our doors want a degree,” Mitchell said. “But we disappoint 40% of them. And over time, that has accreted into a group of people in America — Americans who are our community — who say it didn’t work.”
But centering student success can reverse that trend, Mitchell suggested. Carnegie Classifications, a popular system for categorizing colleges and universities that’s housed at ACE, is using that focus to bring changes to its framework.
For example, the system plans to release new classifications in the coming weeks based on student access and earnings, with an emphasis on measuring whether colleges have student bodies representative of their regions.
“We’re going to look at institution by institution — are you serving the students in the communities that you serve?” said Timothy Knowles, president of the Carnegie Foundation for the Advancement of Teaching.
A crisis can spur innovation
Fear can be a motivator to embrace innovation, said Kathleen deLaski, founder of the nonprofit Education Design Lab.
“Let’s not waste a good crisis,” deLaski said during a panel Tuesday.
She pointed to enrollment challenges at community colleges. In 2023, The Hechinger Report found that they had shed just over one-third of their students since 2010. However, after years of declines, fall enrollment has been ticking up at public two-year colleges since 2022, according to the National Student Clearinghouse Research Center.
Community college leaders began looking for new educational models amid the enrollment crunch, deLaski said. And recently, interest in short-term credentials have been fueling some of the sector’s enrollment gains.
“It’s in the new kinds of short-term pathways, certificates, even dual enrollment in high school,” deLaski said.
That’s also been a focus at Education Design Lab. Since 2021, the nonprofit has worked with over 100 community colleges to create “micro-pathways” — two or more stackable credentials that can be completed in under a year. The pathways are intended to result in jobs at or above the local region’s median wage and put students on track to earn an associate degree.
Innovation could come from unexpected places
Disruption to higher education is more likely to come from certain areas of the sector than others, Paul LeBlanc said Tuesday. LeBlanc is the co-founder of Matter and Space, an artificial intelligence and education company, and he previously led Southern New Hampshire for two decades.
“Where it is hardest are institutions that are first with sterling reputations and big endowments,” he said. “That’s a huge impediment to innovation.”
Public systems with strong unions may also struggle to be disruptive, LeBlanc said, though he added he was not anti-union.
On the other hand, colleges often seen as innovative don’t typically fall into those buckets.
He gave the example of Southern New Hampshire University, which he described as an “unknown, small, whatever-tier” college before it turned into an online behemoth serving over 160,000 students during his tenure.
LeBlanc also pointed to Arizona State University, the college that helped launch the annual conference. Arizona State’s enrollment has ballooned in the past two decades, reaching over 180,000 in-person and online students in the 2023-24 academic year. The university’s president, Michael Crow, has been largely credited with transforming the university into one with a national brand.
“It was kind of the joke school. It was a safety school, it wasn’t the flagship,” LeBlanc said, adding that Crow had “lots of running room” to reinvent the university.
Other innovators could come from these types of spaces.
“Look for the innovators to be on the boundaries, the unknown, the unencumbered places that have the freedom and the movement to want to sort of reinvent themselves,” LeBlanc said.
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From U.S. Education Secretary Linda McMahon’s recent comments to the Trump administration’s latest funding threat to an Ivy League institution, here are the top-line figures from some of our biggest stories of the week.
By the numbers
100+
How many union employees were recently fired from the U.S. Department of Education’s Institute of Education Sciences, the agency’s research and data arm. McMahon said Tuesday at an education and technology conference that the department is looking to revamp IES.
9
The number of demands made by the Trump administration to Harvard University for the Ivy League institution to keep its federal funding, according to a copy of the letter. The requirements include for Harvard to review academic programs the Trump administration considers “biased” and for the university to eliminate diversity, equity and inclusion initiatives.
15%
The National Institutes of Health’s proposed rate cap on reimbursement for indirect research costs. However, a federal district judge permanently barred the NIH last week from implementing the policy, ruling the agency lacked the legal authority to make the change.
3
The number of federal lending programs the Education Department named when announcing plans to revise student aid regulations. The agency indicated it hopes to make changes to two income-driven repayment plans, as well as the Public Service Loan Forgiveness Program, which clears debts for public servants after they make a decade of qualifying payments.
22,000
How many students attending private nonprofit colleges who could be rendered ineligible for a popular grant program in Florida under a new legislative proposal. Florida lawmakers are mulling performance metrics — including minimum graduation rates — for institutions to be able to participate in the program.
State education agencies are no longer bound to certify their compliance with President Donald Trump’s executive orders and guidance memos banning diversity, equity and inclusion programs in order to continue receiving federal funds—at least for now.
K-12 school districts were originally required to prove they had met the president’s standard by April 14. But now, as the result of an agreement reached Thursday in a lawsuit, the Department of Education cannot enforce that requirement or enact any penalties until April 24. The move to require school systems to certify their compliance was one of the department’s first actions since releasing the Feb. 14 Dear Colleague letter that declared all race-conscious student programming, resources and financial aid illegal.
The National Education Association challenged that letter in a lawsuit and then moved for a temporary restraining order to block the certification requirement. (The department notified state educational agencies of the deadline April 3.)
In addition to not enforcing the certification requirement, the Education Department also agreed not to take any enforcement action related to the Feb. 14 guidance until April 24, though that doesn’t cover any other investigations based on race discrimination.
The plaintiffs, represented by the American Civil Liberties Union, still want to block the Dear Colleague letter entirely. But they see the agreement as a positive step.
“This pause in enforcement provides immediate relief to schools across the country while the broader legal challenge continues,” the plaintiffs said in a news release.
A judge will hold a hearing April 17 to consider the NEA’s motion for a preliminary injunction, which could block the guidance entirely.
For more information on this case and others, check out Inside Higher Ed’s lawsuit tracker here.
The extent of the cuts to the graduate student workforce remains unclear and will vary from institution to institution. But if and when those losses come to pass, experts say that employing fewer graduate students—particularly Ph.D. students, who typically hold years-long research and teaching assistantships—will undermine universities’ broader operations, including undergraduate education, faculty support and the future of academic research, which is reliant on training the next generation of scholars.
“First and foremost, a reduction in the number of graduate students may threaten that individualized, close attention for undergraduates,” said Julia Kent, vice president of best practices and strategic initiatives at the Council of Graduate Schools.
That’s because many doctoral students work as teaching assistants, particularly for large introductory undergraduate courses, where they assist with grading, lead discussion sections, help students with assignments and supervise labs.
“While a professor may be doing the lectures for those courses, they may not seem as approachable or accessible to undergraduates. In those cases, the graduate teaching assistant is the first point of contact for that student. They may go to them for questions or feel more comfortable asking for help with assignment,” said Kent, who added that graduate students also support universities’ learning missions in other ways, too. “They may also help staff in the writing center and support undergraduates writing essays for their classes and provide informal mentoring.”
‘Not Sustainable’
Although colleges and universities haven’t felt the effects of losing a number of those roles yet, Kent said the uncertainty surrounding graduate admissions poses a “real risk” to undergraduate learning.
If universities do want to maintain smaller class sizes with fewer graduate students, they may rely even more heavily on low-paid contingent faculty, said Rosemary Perez, an associate professor at the Center for the Study of Higher and Postsecondary Education at the University of Michigan.
“That’s not sustainable for those instructors, who may be teaching five or six classes at multiple campuses and still not making enough to live,” she said. And with fewer graduate students in the pipeline, “we’ll also have fewer people who are trained to be faculty. People are going to retire. Who’s going to teach these college classes that have experience working with college students?”
Nothing concrete has to happen for people weighing their futures to decide to take a different path where it seems like there may be more stability. Rational humans may decide that’s not the direction they want to go in anymore, and that’s going to be an immediate loss to the field.”
—Marcel Agüeros, astronomy professor at Columbia University
And with fewer spots available to prospective graduate students, Perez fears students who don’t attend top-ranked institutions will be the first to disappear from the academic pipeline. That’s because when resources are scarce, “the tendency is to rely on markers of prestige or GRE scores as predictors of success,” she said. “But those aren’t great predictors of what people are capable of doing in their careers.”
Fewer graduate students will also likely mean a heavier workload for faculty, who in addition to teaching, also rely on them to help with research by assisting in running labs and research groups and co-authoring papers.
“They help universities’ reputation, but they also help faculty funding prospects by making the faculty more productive, because funding agencies like to see productive faculty. A lot of that labor is happening through graduate students,” said Julie Posselt, a higher education professor at the University of Southern California, which last month revoked outstanding offers for numerous Ph.D. programs, including sociology, chemistry, sociology, molecular biology and religion. “Meanwhile, there’s also plenty of evidence that Ph.D. students are contributing to universities’ research output and are independently advancing knowledge in their respective fields.”
Impact Will Reach All Fields
Already, numerous universities across the country have said they’re reducing the number of Ph.D. students in the biomedical sciences as a result of drastic cuts to the National Institutes of Health, which each year sends universities billions of dollars in grants that indirectly and directly support graduate education.
But it won’t just be those in the biomedical sciences that feel those cuts, especially as colleges downsize their budgets in light of the NIH’s plan to cap the amount of money it gives institutions for indirect research costs, which covers facilities maintenance, compliance with patient safety protocols and hazardous biowaste removal. Although a federal judge has blocked those cuts for now, the Department of Health and Human Services filed an appeal Monday; if the plan takes effect, it will force universities to find other areas they can cut from their budgets to make up the difference.
“Even if you’re in the humanities, what’s happening right now in federal granting agencies that are far from the humanities has an impact on the humanities, because the overall budget for a university to do things like keep up their infrastructure and keep the lights on will go down,” said Jody Greene, associate campus provost and literature professor at the University of California, Santa Cruz. “And if we also don’t have international students, that’s also going to be a significant budget hit at institutions like ours.”
U.S. Secretary of State Marco Rubio has characterized, with little concrete evidence, those students as “lunatics” who came to the United States “not just to study but to participate in movements that vandalize universities, harass students, take over buildings and cause chaos.” The administration is also considering a travel ban affecting 43 countries. (After Trump issued a travel ban for seven countries during his first term, the number of international applicants to U.S. colleges fell 5.5 percent for graduate students, though applications have been on the rebound post-pandemic.)
All this politically driven chaos and financial uncertainty is making graduate school—and a career as a faculty member—a harder sell for students interested in research careers.
“Up until this year, we’ve been able to tell prospective graduate students that the university will cover the costs of their Ph.D.,” said Marcel Agüeros, an astronomy professor at Columbia University, where the Trump administration has frozen some $650 million in NIH funding. “We want to stay true to that commitment, but we’d be lying if we said that’s going to be 100 percent possible.”
And even though his department is currently only expecting to offer one fewer Ph.D. slot, Agüeros said the uncertainty over the future of federal funding—and even what areas of research academics are allowed to pursue—is enough to push people out of academia.
“Nothing concrete has to happen for people weighing their futures to decide to take a different path where it seems like there may be more stability,” he said. “Rational humans may decide that’s not the direction they want to go in anymore, and that’s going to be an immediate loss to the field.”
And those are the questions would-be graduate students all over the country are asking themselves right now.
“We don’t have any data yet, but anecdotally, I’m hearing that there are a ton of students who are choosing not to even try to go to graduate school this year and next year because they’re perceiving less funding and support,” said Bethany Usher, immediate past president of the Council on Undergraduate Research and provost at Radford University in Virginia.
“Those Ph.D. students are the ones who push the boundaries of research,” she added. “They have the newest ideas, and if we reduce those, it will have a generational impact on higher education, industries and communities.”
The University of California National Center for Free Speech and Civic Engagement held its annual virtual #SpeechMatters conference Thursday amid a speech environment that is vastly different and far more fraught than anyone could have imagined even a few months ago. The Trump administration is simultaneously punishing colleges for their failure to clamp down on pro-Palestinian protesters and detaining international students, in some cases for participating in those same protests.
In her opening remarks, Michelle Deutchman, the center’s executive director, acknowledged as much: “Today we gather at a critical moment for higher education across the nation,” she said. “The role of colleges and universities in our democracy is being questioned. Trust in institutions is shifting. The impact of a historic national election and a year of campus protests continues to unfold.”
The conference, which featured four panels and 15 speakers with expertise in free speech and higher education, covered not only campus speech but also the broader questions of trust in universities and the knowledge they produce. Here are five key takeaways from the event.
College administrators can’t prevent the chilling effect President Trump’s actions are having on campuses.
In one session, Deutchman asked Howard Gillman, chancellor at the University of California, Irvine, for 12 years, and Erwin Chemerinsky, dean of the UC Berkeley School of Law, how students can exercise their right to free speech despite the Trump administration’s crackdown on institutions and students alike for purported antisemitic speech.
Gillman and Chemerinsky found a consensus—one that contradicts the widely held belief that universities should always be forums for political discussion: As long as Trump appears to be punishing individuals for constitutionally protected speech, now may not be the time to encourage students to speak out.
“When you have an administration that has not yet been constrained by the courts sufficiently, it does create an environment where people might know they have, in theory, legal protections for the activities they engage in, but just because your activity may be protected doesn’t meant that you are not going to be put in a very complicated situation if the government does move forward,” Gillman said. “I don’t want to overstate the amount of reassurance that you can give. A chilling environment is a chilling environment.”
Chemerinsky said it wasn’t tenable to assure students that he could protect them from the federal government. One student had asked him if the law school could prevent Immigration and Customs Enforcement officers from coming onto campus and detaining students, and Chemerinsky said he had to tell the student that wouldn’t be possible. (In February, Trump rolled back protections that stopped immigration enforcement actions from taking place in certain locations, including on college campuses.)
“There’s a limit to what we can do to protect students. I don’t want to ever have students have the illusion that we can do more than we can,” he said.
Rebuilding trust in higher ed requires a fundamental shift in culture.
When discussing the lack of trust in higher education, Steven Mintz, a history professor at the University of Texas at Austin and a columnist for Inside Higher Ed, said the distrust exists not just between the government and colleges, or administrators and faculty, but at all levels of higher education. Students erode trust with faculty when they don’t put effort into their courses, he said. Faculty who care more about their own research and success than their students and institutions likewise fail to build trust with their students and peers. And administrators earn the faculty’s distrust by leaving them out of key decision-making processes.
It’s all a result of Americans’ shifting view of higher education from a public good to a private one, he argued, with students as the consumers and administrators as the CEOs.
“It is absolutely imperative that we rebuild trust within our campuses,” he said. “It’s not a matter of policy tweaks; it’s a matter of a fundamental cultural shift.”
He noted that in his own classes at UT Austin, he has made an effort to help students undertake real-world projects, like building an educational webpage for a local museum. Such efforts position the student not as a consumer, but as a “partner and collaborator and creator of knowledge,” he said. And it shows communities that college instills in its students important skills—and isn’t always just an amorphous ivory tower.
Fast turnover of college leaders is contributing to the lack of public trust.
In the same panel about trust, multiple speakers touched on the fact that administrative turnover can be a major impediment to trust-building on campus.
University presidents last, on average, just over five years on the job, which means that most students see at least one presidential turnover in their college career. Each new president must rebuild trust not only with the constituents on their own campus, but also with alumni, government officials, the local community and beyond.
Short tenures also make it difficult for students and employees to buy in to key university initiatives, considering it’s not uncommon for a new president to scrap the previous administration’s projects in favor of new priorities.
“Trust is about relationships … and you don’t build trust overnight. You build trust through listening. You build trust through showing up. You build trust through showing proof points. That’s how it happens. So, you can’t build trust when you’re a president that’s been there three months,” said Bobbie Laur, president of Campus Compact, a nonprofit focused on civic and community engagement in higher education. “Some of what we’re facing is the reality of the short tenure of leaders without the necessary support structures to support leaders right now.”
Saanvi Arora, a UC Berkeley student and the executive director of the Youth Power Project, a nonprofit that encourages young people to participate in public policy, agreed, noting that she has met numerous college students who have no idea what their institution’s president looks like.
“That’s a huge problem, if you’re not meeting with students directly, showing up to spaces where it really matters for students to see you there,” she said. “It really makes a difference and moves the needle.”
Universities need to do more to stanch the spread of misinformation.
Misinformation is pervasive in the current vitriolic political environment, according to a panel of experts, but so is anger and skepticism toward the very researchers who aim to better understand the phenomenon.
Simone Chambers, chair of political science at UC Irvine, pointed out that research shows misinformation is more likely to circulate in right-wing communities. But that research is then called partisan, sometimes even by politicians themselves; mis- and disinformation experts who studied incorrect information ahead of the 2020 election earned intense ire from congressional Republicans, who accused them of censoring free speech and subpoenaed data about what was being marked as inaccurate information.
That’s compounded by the perennial problem of most, if not all, academic research: Few people see it. Michael Wagner, who leads the Center for Communication and Civic Renewal at the University of Wisconsin at Madison, said that universities could make a greater effort to get the work of misinformation researchers into the public’s hands.
Universities must do “a more aggressive job of promoting the work, even when it highlights partisan asymmetries, even when it highlights other kinds of things that might leave universities open to attack from those who don’t like the fact that universities exist,” said Wagner, who noted that his center has been subpoenaed by Congress. “[That] is something they need to do a better job of, to help the researchers who are trying to do this stuff get their work out there to folks so that they can engage with it and decide how they want to incorporate that information into how they live their lives.”
More college leaders should stand up for higher education.
Colleges have been capitulating to the Trump administration in everything from rolling back diversity, equity and inclusion programs to, in Columbia’s case, at least, agreeing to a list of the administration’s demands in the hopes of having its federal funding unfrozen.
But a small number of college presidents—including Wesleyan University’s Michael Roth and Princeton University’s Christopher Eisgruber, who were both cited by panelists at the conference—have spoken forcefully against the Trump administration’s attacks on political speech, DEI and free scientific inquiry. In an op-ed in Slate about the arrest of Mahmoud Khalil, a Columbia University alumnus and pro-Palestinian activist who was detained a month ago by immigration officials, Roth wrote, “University presidents must speak out against this attempt to control the political culture of our campuses from the White House. Just as we should decry antisemitism and other forms of discrimination, we should insist that students and faculty have the right to make their voices heard about the issues of the day. Neutrality here is a betrayal of our academic mission.”
Kristen Shahverdian, program director of campus free speech at PEN America, a free expression nonprofit, said she is glad she doesn’t have to be a part of any internal conversations about how a university under fire by the Trump administration will react. Still, she said, she wishes more higher education leaders would emulate Roth and Eisgruber and that the higher education sector as a whole could come together as a united front.
“There’s probably multiple reasons why they’re able to speak out and others maybe can’t,” she said. “[But] we really need to push back, to hold on to the values of higher education, which include freedom of expression and academic freedom.”
