Adapt or Fade: 12 Higher-Ed Challenges in 2025—and Institutions That Might Outlive Them

By Rob McLay, Yang Song, Liang Cheng, and Xiaodong Wu

Preface
This commentary was inspired by the article 12 Challenges Facing Higher Education in 2025 (and Exemplars Addressing Them) published on Changing Higher Ed. We want to acknowledge and give full credit to the authors of that piece for framing the conversation so clearly. What follows is our synthesis and reflection on those ideas, combined with a set of complementary readings that explore related trends shaping higher education today.

Higher education in 2025 is facing one of the most turbulent chapters in its modern history. As enrollment declines deepen, digital disruption accelerates, and public trust erodes, the very purpose and sustainability of universities are under scrutiny. The Changing Higher Ed article captures this moment of crisis and possibility, pairing each challenge with institutions taking bold steps to adapt.

For those working inside or around the higher education sector, the significance of this piece is twofold. First, it outlines the stark pressures shaping the landscape—from shrinking demographics to the rise of artificial intelligence. Second, it reframes the conversation by showcasing examples of institutions that are responding in creative, sometimes unconventional ways. In a moment when the narrative around higher education is too often dominated by decline, this pairing of challenge and exemplar is both refreshing and instructive.

Challenges and Exemplars

The article identifies twelve key stress points that will define the sector’s trajectory in the years ahead. Among the most pressing:

  • Demographics & the enrollment cliff – the shrinking pool of traditional-age students means fewer first-year enrollees, and more competition for adult and non-traditional learners. The number of U.S. undergraduates has already fallen from roughly 18 million in 2012 to around 16.5 million by 2022.
  • Overcapacity & declining demand – physical campuses and staffing structures built for more students than are now enrolling, raising existential questions about financial sustainability.
  • Cost, debt, and public trust – a decades-long rise in tuition and student debt has fueled skepticism about the return on investment, with some policymakers openly questioning the societal role of universities.
  • AI & digital disruption – automation, adaptive learning systems, and generative AI are reshaping how students learn and how institutions operate. Technology is no longer an add-on but a defining feature of the academic value chain.
  • Heightened competition – regional and global rivals are vying for a smaller and more skeptical pool of students, with online platforms blurring geographic boundaries.

What sets the Changing Higher Ed piece apart is that it does not leave us in despair. For each of these stress points, the authors profile institutional exemplars taking bold steps: streamlining operations, embracing online learning, investing in leadership capacity, or rebranding their value proposition. These examples are not perfect blueprints, but they signal what adaptation looks like in practice.

Why This Matters

This dual lens—problems and responses—reminds us that higher education is not static. The system is under extraordinary strain, but also demonstrates adaptability. For institutions, the message is clear: do nothing at your peril. For policymakers, it underscores the need to support innovation while holding institutions accountable for access, equity, and outcomes. And for students and families, it provides reassurance that some universities are making meaningful adjustments to serve learners better.

The demographic enrollment cliff, in particular, has profound implications. Institutions that continue to chase the shrinking population of 18-year-olds without diversifying into lifelong learning, credentialing, or partnerships with industry will struggle. Similarly, the digital revolution is a dividing line: those who harness AI, cloud platforms, and data analytics will be positioned to innovate; those who resist may not survive.

Strategic Themes Emerging

From the article’s examples, a few broad themes stand out:

  • Digital-first strategies—moving core systems to the cloud, adopting AI, and embedding technology across teaching, learning, and administration.
  • Retention innovation—rethinking the supports provided to students in the “murky middle,” those neither thriving nor failing outright, but most at risk of drifting away.
  • Value reframing—being explicit about what higher education delivers, whether that is career readiness, civic learning, or lifelong adaptability.
  • Leadership agility—governance that prioritizes resilience and decision-making speed over tradition and hierarchy.

These themes are not only relevant to U.S. institutions. Around the world, universities are confronting similar pressures. The interplay between global student mobility, online learning platforms, and shifting labor market demands makes these lessons widely transferable.

Must-Reads on the Future of Higher Ed

To broaden the lens beyond the Changing Higher Ed piece, here are other essential reads that deepen the analysis:

Together, these sources paint a picture of a sector in flux: caught between demographic headwinds, financial stress, and technological disruption, but also brimming with opportunities for reinvention.

Closing Reflection

Higher education in 2025 faces stark choices. Institutions can either adapt to the twin pressures of demographic decline and technological disruption—or fade into irrelevance. What unites the exemplars profiled is not perfection, but a willingness to act boldly. Their experiments provide a glimpse of the sector’s possible futures: more adaptive, more digital, and perhaps more relevant than ever.

For readers—whether inside universities, advising them, or simply invested in their societal role – the imperative is the same: to ask whether our institutions are preparing for a transformed future or clinging to a fading past. The answer will determine not just institutional survival, but also the future vitality of higher education itself.