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In the final episode of 2025, host Alex Usher welcomes Robert Kelchen, a recurring favorite guest, to discuss the top 10 issues in American higher education over the past year. They cover a wide array of topics such as state funding for public higher education, efforts to dismantle the US Department of Education, rising athletic spending, DEI and admissions, the impact of artificial intelligence, international student enrollment trends, state-level DEI policies, and the challenges faced by university leadership. Additionally, they delve into the One Beautiful Bill Act and the Trump administration's higher education compact. Don't miss this comprehensive look into the major developments and challenges in the world of higher education in 2025.
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What is The World of Higher Education?
The World of Higher Education is dedicated to exploring developments in higher education from a global perspective. Join host, Alex Usher of Higher Education Strategy Associates, as he speaks with new guests each week from different countries discussing developments in their regions.
Produced by Tiffany MacLennan and Samantha Pufek.
Alex Usher: Hi everyone. I'm Alex Usher and this is the World of Higher Education Podcast. This is our last podcast for 2025, and as usual, our Christmas edition comes from the University of Tennessee and Robert Kelchen, our favorite guest from the United States. He's here to talk about the top 10 issues in higher education in the United States over the past 12 months. He needs no introduction. This episode needs no introduction, it's a great annual favorite. Robert, welcome.
Rob Kelchen: Thanks for having me. The problem with this episode is nothing really happened in American higher ed 2025.
Alex Usher: Good. Good. So as you can tell everyone, Robert's into the soft sell approach to, to, uh, higher education coverage. Thanks a lot for joining us. Robert, why don't you start us off with number 10.
Rob Kelchen: Sure. Number 10, state funding for public higher education generally held and given some of the concerns about public trust in American higher ed, that's a pretty good sign. Public support for higher education is at its highest level in several decades. A lot of the American public still has the narrative though, that higher ed funding never really recovered from the great Recession, but it did. The drawback is we're probably at our high point for funding for the next several years at least. A number of states started to cut back, freeze proposed cuts, and just the state financial situation in the US doesn't look as rosy as it did a year or two ago.
More states are looking at budget deficits. And when there are budget deficits, higher education usually ends up losing out. So we're, we're looking at the possibility of more substantial tuition increases than we've seen in a number of years. We've had a decade where student debt levels have been flat, tuition levels have been at or below the rate of inflation. It's been a good run that nobody has really noticed, and it's probably coming to an end.
Alex Usher: Let's go to number nine in, in a normal year, I think number nine would be number one, but go ahead.
Rob Kelchen: It's 2025, the efforts to dismantle the US Department of Education. It's something that almost every conservative president has talked about since the department was created in 1979. The challenge is that it is locked in legislation and it is extraordinarily difficult to get major legislation through in the United States except for a very narrow process called budget reconciliation, which we'll come back to later in this top 10.
But, the Trump administration still has tried to shift a number of the functions of the Department of Education to other federal agencies. And also there have been other cuts to the Department of Education through eliminating contracts, mass layoffs, the staff of the Department of Education's main statistical agency has been reduced back to 1869 levels at three people. But now we're, we're in. We're in this world where there are these weird interagency agreements where the Department of Education keeps technical authority, but they're trying to shift funds elsewhere, leaving everyone who's trying to access funds, navigating this really confusing maze of increased bureaucracy.
Alex Usher: Great. What about number eight?
Rob Kelchen: Number eight, athletic spending keeps rising. In the US we have institutions that have $200 million athletics budgets. And athletic spending keeps rising. We've had athletic coaches primarily in football, get massive packages just to go away. I'm kind of waiting for that department head version to come, but I don't think I can get $70 million or $50 million like some of these football coaches.
There's an estimate that it's been $228 million to make football coaches go away this year. And football suffers from the problem that other athletic programs do. You only can win half of your games on average, and every program thinks they can be the one to do it. And then on top of that, there is a, a massive settlement with a National Collegiate Athletic Association, the house settlement where athletics programs have to start paying athletes. This year for big time programs, it's about $20 million a year. Some of the big time programs, they can turn to donors to get the money. Others, it seems like they're turning to students. And then here at where I am at Tennessee, they just decide to basically put a tax on tickets to help pay that $20 million. And with the fan base here, it's worked out.
Alex Usher: Interesting. And I hear at UCLA there's been quite a, an issue about getting donors to try and, you know, pay to, I'm not even sure I understood the, the example, but they were in effect, uh, or I saw one person saying, basically, UCLA is advising its alumni to dodge taxes by donating to certain charities that will sort of in lieu of NILs.
Rob Kelchen: Yeah, there are a lot of interesting tax standards going on, and also interesting ways to try to continue to shield athletics from the typical public record laws in states. And that usually involves nonprofit organizations that are closely affiliated, but not exactly tied with the public university. Somewhat similar to what traditional university foundations have done, basically to make sure the state couldn't come in and take their money.
Alex Usher: Amazing. Number seven.
Rob Kelchen: Number seven, a big focus on DEI and admissions. And I'm focusing here at what's happened at the federal level where the Trump administration came in, going on about how they wanted to eliminate DEI and how woke is dead. And it's all been done through executive actions. Which is fascinating because you'll all certainly remember number one last year was a Supreme Court decision called Loper Bright that was supposed to limit the authority of executive agencies and basically limit their ability to act without going through Congress.
But we've seen, we've seen a memo from the Department of Justice basically saying anything related to diversity has to stop. Then also some pretty massive new proposed data collections out there to track what's going on with DEI, particularly in elite college admissions. And at the same time where the statistical arm of the Department of Education has been more than decimated. They're proposing a massive new data collection that would, they're estimating would take each university in the country, at least a week's worth of person time to fill out. Going back as much as collecting seven years of data on admissions, getting down to, basically identifying individuals in some cases.
They want incredibly detailed information about admissions to make sure that there is no discrimination going on by race and ethnicity, and going back to collect data as far as 2019, which completely blows up institution's data infrastructure. We're gonna have a lot of time spent on it, and any data going back is just not going to be useful.
Alex Usher: Let me break this into two questions, 'cause I think there's, there's, there's a couple things to follow up. 'Cause the first is, as you say, there was the Loper Bright decision. That the, the executive wouldn't be able to do anything. Has that been tested in court yet?
I mean, one thing that has struck me about, you know, the first, 10 months of Trump, is that he tends to be moving at a speed that the court can't control, right? So he does lots of things and people comply with them, and then later the courts come along and undo it, right? I mean, that's been the case with most of the, you know, the, the freezes on funding in science. Has this been tested in court yet? Like has anyone tried to hit him that way and, and or is it just that the court is fine with it now that there's a Republican president?
Rob Kelchen: It's, it's being used to at least some success at the district court levels, but very little has actually gone through the regular process at the US Supreme Court, yet. Almost everything's gone through what's called a shadow docket, where there's a small group of justices, basically do an emergency opinion and that kind of holds the fort until they go through the regular process, which for some of these items it's simply too late, like employee firing.
But for changes to say data collection or what institutions are required to do, that may still be relevant. It may come to the Supreme Court, but also the Supreme Court's nine people with a lot of legal cases. And it may not actually end up getting taken up by the court, which in that case, the district court would stand.
Alex Usher: Right. And so the second thing is, is how they're using this data. I mean, is it too cynical just to say that if, you know, if black and Latino numbers start to rise, they'll assume that you must be doing something wrong and penalize the institution? Like, is that the reason for this?
Rob Kelchen: Yeah. That that's the way that at least universities are interpreting it. There, there is a lot of pressure to make sure that essentially admissions rates don't go up. But the, the challenges for a lot of these groups, they're pretty small. There's a lot of noise, and also there may be changes in where students want to go. And then there's a lot of information about standardized test scores, which the administration is trying to require and financial aid. It is a, an incredibly complicated data matrix that I don't have confidence that institutions are gonna be able to fill that out correctly and in a way that basically preserves the privacy of individuals. Which is the whole argument against a federal unit record data system in the US for decades.
Alex Usher: yeah. And, and of course it, it's all gonna be overseen by three employees at at, at the DOE. So, um, that will be fun. Let's move on to number six.
Rob Kelchen: Number six, I, it wouldn't be a top 10 list in 2025 without some mention of artificial intelligence, or as Secretary McMahon accidentally referred to at one of her talks, A-1 instead of AI. But the, the stakes are high, so, we'll, we'll, we'll let that one go. Institutions are spending a lot of money on artificial intelligence. We've seen universities do massive hiring sprees. Ohio State, I think is bringing in more than a hundred faculty focused on AI. Institutions are spending money trying to figure out how do they become more efficient? How do they train people?
At the same time, AI is starting to distort the labor market. Computer science grads are having a tough time finding jobs, and business leaders are talking about we don't wanna hire entry-level people, which works great for them for a few years, but then they can't find mid-level people. And then on top of that, just the massive scope of AI in the economy right now with all the debt being taken out, all the electricity being used for data centers. Those things are starting to distort institutions' maintenance budgets, and I worry about them affecting just what it costs to borrow. And then there's the question of what will happen five years down the road, the Financial Times had a great graphic on it where at one end, basically AI is amazing and poverty is eliminated, growth is almost infinite. At the other end, it's the machines kill us all. And their mid-level projection is something like a, two tenths of a percent increase each year in gross domestic product, which would actually be a pretty good thing.
Alex Usher: We're gonna take a short break. We'll be right back. And we're back. Okay, uh, Robert, we're at number five.
Rob Kelchen: Number five is international student enrollment in the US. Where it seems like so far in 2025, international student enrollment is down a little bit in the US but it's not the worst case scenario, that was certainly within play. But I think the worst case scenario is president Trump gets onto social and says all international students are hereby banned from the country. Thank you for your attention to this matter. That is within the realm of possibility. Also something close to, no changes within the realm, but we had massive issues with students coming late to campuses in the fall because of the inaccessibility of visa appointments. We've got about 20 countries where the administration does not wanna let anyone in at this point.
And I mean this really hits graduate education hard because we have a substantial number of international students in the US but they're disproportionately at the graduate level. That affects research. It affects teaching, and it's kind of put research universities in pause mode while they, they wait to see what's going on.
Alex Usher: You know, it was interesting back in May when the, the government tried to put, uh, a halt to Harvard's ability to recruit international students, every country in the world, pretty much, you know, I, I do The Fifteen, which is that world, roundup of stories around the world. It was remarkable how few countries there were, where there were not stories about their Harvard students, right?
You know? So they do interviews with, students, uh, who were there, or students who were going. Harvard was a local story for the entire world for about a week. It was wild. I'm not sure I've ever seen anything like that in, in higher education coverage. So, uh, yeah, that's not just a US story, but very much an international one too.
Rob Kelchen: And, and just that broader issue of international students not being welcome. It's not just the US thing either.
Alex Usher: Mm-hmm.
Rob Kelchen: You've seen in Canada, Australia, UK, and that's created opportunities for countries like Vietnam to all of a sudden become players.
Alex Usher: Yep. Four.
Rob Kelchen: Number four is that the federal government has done a lot on DEI, but states have done even more controlling employee speech, what faculty members can and can't teach in the classroom. The, the, the story that got a lot of attention across America was the responses to the murder of Charlie Kirk on campus in Utah, where a number of people across all sorts of different jobs got fired for expressing their opinions on the matter. And we had a number of faculty members across the country who have either been terminated or suspended or have processes still ongoing on that.
And then this, just the broader push against DEI, it took down the president of Texas A&M, one of America's largest research universities. And the backstory about that was there was a faculty member who was teaching things in a class that the legislature didn't like, and they eventually put enough pressure on the president that he decided to leave.
Alex Usher: What about number three?
Rob Kelchen: Number three is how in the world is Harvard the hero? In American higher ed, Harvard is often that snooty institution where they don't accept many students. They spend a ridiculous amount of amounts of money, and they're just not that valuable. That's kind of the, the perception within higher ed of Harvard.
All of a sudden everyone is rallying to Harvard after they stood up to the Trump administration, when the administration tried to slash their research funding. And we've seen that in a number of other elite institutions. Most of them, except for Harvard and Princeton, have reached some sort of settlement with the most recent one being Northwestern's $75 billion settlement that got announced the Friday evening of a four day holiday weekend here in the US.
Alex Usher: Uh, right. And most of those institutions have been private institutions where, at least in theory, you know, the, the federal governments is the, is the biggest funder in many ways, but it's also included University of Virginia and I, I think another one, unless they've settled and I missed it, uh, the, the other big one that hasn't settled is UCLA.
Rob Kelchen: Yes. UCLA is the, yeah, the big public that has not settled. That's where state politics become important. Because California is strongly under democratic control, they would probably lose their state funding if they settled.
Alex Usher: Right. Let's go to number two.
Rob Kelchen: Number two, the American political system is rather dysfunctional for passing major legislation, in part because in our, in our US Senate, there's a filibuster still in place that means you have to get 60 out of a hundred votes in the Senate to get major legislation through. And we haven't had 60 votes in the Senate much over the past several decades.
But there are two vehicles through which legislation can get through. One is an end of year budget bill where basically everyone gives up, they want to go home and the they'll pass things they normally wouldn't. The other, and the more thoughtful one is, there's a vehicle called budget reconciliation where simple majorities can pass legislation through the House and Senate as long as it has some kind of fiscal component.
And through that, we got the biggest changes to Federal higher education since at least 1992 in what is commonly here known as the One Beautiful Bill Act. The Higher Education Act itself hasn't been reauthorized in 17 years. I'll probably be retired by the time that happens, but we saw big changes limiting student loans, adding in federal grant to short term certificate programs, and adding new accountability policies.
These are massive changes to financing American higher education, and they went through in this bill essentially to help pay for other budget provisions.
Alex Usher: Okay, gotcha. Uh, if we had a drum roll, maybe Sam can add one in post-production here, but drum roll,
Alex Usher: number one.
Rob Kelchen: Number one is the higher education compact. And that is the Trump administration's effort to get institutions to sign on to a list of 10 demands that basically they codify the settlement agreements with some of the elite research universities, and also add a lot more federal oversight over higher education, especially in terms of admissions, recruiting, and anything related to diversity.
The administration announced it. They sent this out to nine universities. None of them chose to publicly sign on. Most of them rejected. A few others like Vanderbilt and Texas remained non-committal. To this point, they have not gotten a single institution actually signing on. And the interested institutions include well-known institutions like the New College of Florida and Valley Forge Military College.
Alex Usher: I think High Point said yes too, didn't they?
Rob Kelchen: I don't think anyone has actually said yes. I think they said they're, they're interested,
Alex Usher: I see. Okay.
Rob Kelchen: But the, the moral of the story, and for anyone who works in fundraising, you know, not to announce anything until you are pretty far along to your goal. But the administration, I think they thought that institutions would be under so much pressure that they would sign on. But, the reason why the elite institutions said no was using the Trump administration's arguments about merit. That research grants in particular should be based on merit, not based on anything else. And this compact proposed to maybe give institutions a leg up if they signed on, or maybe just penalize them if they don't, that's still not clear. But it's fascinating seeing the administration's arguments used against them in this case. But the administration is going to use every effort available, rewriting grant provisions, or trying to get things through legislation to try to enact these different parts of the compact.
So this is not over yet, even though the university sector has won this battle to this point.
Alex Usher: Uh, that's a fantastic number 10. But Robert, I gotta ask you why one of 'em is missing and I'm being a homer here, it's a Canadian thing, what about the Santa Ono story? I mean, you know, we pay attention to that in Canada because he's Canadian and he was president of UBC before he went to, the University of Michigan. But that's a really interesting story, right? Because here's a, someone who, with some influence in the higher education field, who signaled that he wanted to play with the MAGA folks. And, uh, and it turned out the MAGA folks didn't wanna play with him. And, and so he was left without a job having quit, uh, one institution before being finally, you know, accepted at the other. What, what about that story?
Rob Kelchen: Yeah, and that really shows that I traditionally, across the country, leaders in any form, they moved between conservative and liberal states without any issues. But now there's really a wall put up where you have to choose a side and it's hard to move. And in Florida, they really wanted someone who they could trust and they did not trust Santa Ono. And when all this broke, I was at a conference in Aspen with a bunch of university presidents. The interim president of Florida was supposed to be speaking there in person, but with all that going on, he couldn't, he cut a video. And, almost immediately after that video aired, everyone's phone started lighting up with the news that Florida said no to Oho and I, I just keep going back to who wants to be a university president at this point.
It is a brutal job. I mean, the, the good thing about it is it pays well, and if you can keep the legislature happy, you can do some really good things. But the odds of you being there for a long time are pretty low, so real estate advice: rent, don't buy.
Alex Usher: Robert, thank you so much. You'll join us again next year.
Rob Kelchen: Sounds good.
Alex Usher: Fantastic. Thanks again. It just remains for me to thank our excellent producers, Sam Pufek and Tiffany MacLennan, and you, our readers and listeners for joining us. If you have any comments or questions about today's episode or suggestions for future ones, please don't hesitate to get in touch with us at podcast@higheredstrategy.com.
We're off for the break and we will be back in early January. Our first interview will be with Noah Sobe. He's the Chief of Section for Higher Education at UNESCO, and we'll be talking about the UN's role in higher education around the world. Bye for now.