Editor’s note: This article is adapted from a conversation with Phil Hill on the Illumination Podcast. To hear the full discussion, listen to the episode here.
Higher education is entering a new era of accountability—one defined not just by enrollment numbers, but by outcomes.
For decades, institutions could rely on enrollment growth, cross-subsidization across programs and periodic academic reviews to manage their portfolios. That model is rapidly eroding. Today, two forces are converging to create a structural shift in how colleges and universities must think about program performance: demographic decline and regulatory scrutiny.
The demographic reality is clear. We are at or near peak college-age population, and projections show a sustained decline over the next decade. Even institutions that have stabilized enrollment know the underlying headwinds are real. At the same time, regulatory frameworks are no longer theoretical. Federal rules now require program-level evaluation of return on investment. Programs that fail earnings-based thresholds risk losing access to Title IV funding—an existential threat for many academic offerings.
This is not another reform cycle. It is a structural shift in how programs are measured, funded and sustained.
From Enrollment Growth to Program ROI
Historically, institutions managed at the institutional level. If overall enrollment and revenue held steady, cross-subsidies between programs were tolerated. A lower-margin or lower-demand program could be offset by a high-demand, high-margin one.
That logic no longer holds.
When evaluation happens at the program level—and when funding eligibility can be revoked at that same level—cross-subsidization becomes risk exposure. A single program falling below regulatory thresholds can disrupt revenue streams, destabilize related offerings and trigger political or governance conflict.
This requires a new mindset: portfolio management.
Institutions must treat their academic programs not as static offerings reviewed every five or seven years, but as dynamic assets that require continuous visibility into cost, demand and outcomes.
Periodic Review Is No Longer Enough
Most colleges and universities still rely on traditional program review cycles—highly structured, often compliance-driven and infrequent. Those cycles were built for an era of stability.
Today’s environment demands something different: real-time visibility into program performance.
That does not mean earnings data updates monthly. In fact, much federal earnings data is annual. But it does mean leadership needs accessible dashboards that surface program-level risk, trends and predictive insights—without waiting for the next review cycle.
More advanced institutions will go further. They will not simply track past earnings; they will model future scenarios. What happens if admissions criteria shift? If enrollment caps change? If modality expands? Predictive modeling will become a core capability in academic portfolio strategy.
The institutions that thrive will be those that combine internal data—admissions, enrollment, completion—with external data, such as workforce outcomes and state-level employment trends, into a unified decision framework.
The Governance Risk: Politics vs. Process
The danger is not only financial—it is organizational.
If institutions pursue ROI-driven strategy without aligning governance, workflow and data infrastructure, they risk triggering political battles rather than productive reform.
We have already seen this dynamic in high-profile program eliminations tied to enrollment declines. Without transparent data, shared criteria and faculty engagement early in the process, decisions devolve into conflict.
The shift to ROI-based evaluation will magnify this tension.
The most effective path forward is not to bypass faculty governance but to elevate the conversation. Faculty must be involved early—reviewing data, modeling scenarios and understanding regulatory thresholds before decisions become urgent.
When governance is reactive, it becomes adversarial. When it is proactive and data-informed, it becomes strategic.
Mission vs. Market: A False Binary
The instinctive response in many corners of higher education has been defensive: arguing that college is “worth it” in the aggregate.
But broad arguments about average earnings do little to address program-level disparities. Some programs deliver strong economic outcomes; others do not. Nuance matters.
This moment calls for intellectual honesty.
Yes, current ROI metrics are imperfect. They emphasize earnings and often ignore cost of delivery, public service value or long-term civic impact. But dismissing the framework does not eliminate its consequences.
Institutions must do two things simultaneously:
- Operate effectively within the current regulatory environment.
- Broaden the definition of value through richer qualitative and quantitative measures.
Graduate surveys, employer partnerships, service impact metrics and community outcomes can all help tell a fuller story. Some states are already moving toward multi-metric evaluation frameworks that extend beyond earnings alone.
But in the near term, economic metrics will dominate the conversation. Leadership teams must plan accordingly.
Focus on the Structural, Not the Noise
There is no shortage of political noise surrounding higher education. But for most institutions, the more consequential changes are the technical and regulatory shifts quietly reshaping funding and accountability.
The real transformation is not in headlines—it is in data infrastructure, program governance and portfolio strategy.
Higher education is moving from a model of growth by expansion to a model of growth by optimization.
The institutions that respond with defensiveness will find themselves reacting to crises. The institutions that respond with disciplined, data-informed strategy will reshape their portfolios intentionally—aligning mission, market demand and measurable outcomes.
This is not a temporary adjustment. It is a new operating environment.
And the time to modernize program management is now.
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