2026 Higher Ed Top Risks and Challenges
Happy 2026!
It's time to share HigherEdRisk's predictions for the top risks and challenges for 2026. These predictions are intended to be viewed at the macro level across the higher education sector.
Enrollment Risk (Workplace Outcomes): While this is not a top risk for Ivy League or global elite universities, it's impossible to ignore the correlation between workplace outcomes and enrollment decisions. Much of current public discourse is focused upon a single question: "Does this degree lead to 'a good job'?" Institutions unable to answer "yes" with data will face enrollment decline. Students comparison-shop programs based on graduate earnings, and with increased regulatory efforts focusing on this topic and more transparency, this risk may evolve into a compliance risk. Demonstrating clear degree ROI is no longer optional; it’s an essential risk mitigation tool. As Scott White at Forbes notes, "Colleges should restructure their programs so that graduates leave with more than just a diploma. Every degree should incorporate an industry-recognized credential that aligns with real-world job markets." For more ideas on mitigating this risk, we have an entire article dedicated to the topic in our upcoming Winter/Spring edition!
AI drives multiple risks: “Governance is no longer a soft issue. It’s becoming auditable." However, this is just one aspect of AI risk according to Dr Aviva Legatt. AI will also “become campus infrastructure.” To add more complexity, according to Dirce Hernandez in his HigherEdRisk Spotlight article, “The path forward requires institutional leaders to embrace a dual mandate. First, they must reimagine the value proposition of traditional degrees by integrating AI-enhanced learning pathways, stackable credentials, and skills-first approaches that respond to employer demands and student needs. Second, they must establish robust governance frameworks that address privacy, bias, transparency, and equity concerns before these issues become existential threats.” Throw in the risks of 'deep fakes' and an increase in disinformation originating from AI, and the list can go on and on.
Cyber Risk: It is funny how, once AI was more widely adopted, we don’t hear as much about cyber risk and ransomware. But this risk has not gone away. The University of Phoenix experienced a data breach in mid 2025. Higher education continues to remain a prime target due to valuable research data, less restrictive security postures, and decentralized IT governance. Let’s also not lose sight of how closely AI and cybersecurity are interrelated and compound each other. Leaders should continue to support their CISOs and CRO’s with the tools and resources they need to bolster a good cyber posture in the age of AI.
Funding risks continue: Changes in federal student aid policies could lead to further enrollment declines. R-1 institutions already are suffering from loss of federal research dollars, but will these cuts continue? Regardless, institutions should be proactive in increasing philanthropy efforts and consider public-private partnerships to diversify funding and shore up finances.
Student Mental Health: While there have been some improvements, it is still clear that mental health challenges are affecting institutional core functions—retention rates, academic performance, and campus safety. This isn't a student services issue that can be siloed; it's an enterprise risk.
Affordability: Students and families are becoming more price-sensitive, and students are increasingly seeking quick, cost-effective alternatives. Stackable credentials, employer-sponsored training, and online platforms are gaining traction, potentially increasing enrollment risk and hindering retention at four-year institutions. Without pedagogical reform and innovative programming, there may be more stop-outs and attrition. Will the three-year degree be the future mitigation?
Deferred Maintenance: This is another risk that has appeared on the top 10 lists for several years. Unfortunately, the compounding nature of this risk is nonlinear, unpredictable, and complex to model, and if nothing “bad” happens in the short term, it tends to be ignored by leadership. Why? Addressing deferred maintenance requires either: (1) assuming more debt, which worsens leverage ratios; (2) utilizing reserves, which weakens liquidity, or (3) cutting operating expenses, which can negatively affect academic integrity and enrollment. Moody’s and Fitch care about this. Is this on your risk register? If you want to learn more about mitigating this risk, read our upcoming Winter/Spring issue, which will feature an entire article dedicated to this topic.
Campus Security: Unfortunately, active shooters and other forms of campus violence once again make the list. However, to address this risk more effectively, institutions will need more than training and tabletop exercises. Leaders need to invest in technology (communication systems that work!), expand mental health services that work, and build an effective incident command structure. Looking back on late 2025, I cannot help but state the following: Crisis response failures often do more damage than the incident itself, turning tragedies into institutional catastrophes. Want to read more on this topic? Read Preparing for Active Shooter Threats on Campus.
Accreditation Risk: This is one risk that has sparked some bipartisan support in the regulatory space. There is no shortage of proposals on how best to reform accreditation. Time will tell how this plays out, but any significant change will increase uncertainty and compliance risks.
Regulatory and legislative risk: The legislative and regulatory environment has been so volatile over the past year that it's hard to think it could get worse. From multiple executive orders and a barrage of lawsuits, I don’t think this risk is going away. We may see a slight slowdown due to mid-term elections, but don’t let this risk go ignored. Forbes shares six higher education topics likely to be considered during 2026
Final thoughts:
Higher education's risk portfolio continues to grow in complexity, and the risks have become more interdependent, creating a poly-crisis environment. What can executive leaders, fiduciaries, and governing boards do to help battle these top risks and stay resilient?
Meet more frequently than twice a year to discuss top risks.
Ensure board members are adequately trained and have a deep understanding of finance and university operations, not just private sector knowledge.
Ask good questions and really listen to the responses!
Don’t delay decision-making to avoid conflict.
Be candid about the need for pedagogical reform.
Consider strategic financing options such as public-private partnerships to reduce reliance on federal or state funding.
Support your risk management team with technology tools and staff.
And if you were curious about what I predicted for 2025, and if my crystal ball was aligned with reality! Read it here: Top Risks 2025
