Top Risks & Challenges Facing Academia in 2025
Happy 2025! It's time to share HigherEdRisk's predictions for the Top Higher Education Risks for 2025. In 2025, higher education will face increased complexity and volatility as AI adoption and a new administration will amplify existing risks. Leadership will continue to reckon with cybersecurity challenges, student mental health, and enrollment declines while adapting to Department of Education regulatory shifts.
Leveraging strategic risk management will be essential for staying competitive. Risk management can no longer be viewed a singular department function, passive exercise, or a "one slide" discussion.
Boards and fiduciaries that proactively integrate enterprise risk management into their governance frameworks will strengthen institutional resilience and effectiveness. Those who maintain a "sit and wait" or reactive stance may fall behind as this sector continues to face significant disruption.
The insights below will help equip you with actionable intelligence to navigate the complex risk landscape ahead. So, let's get started!
Top Risks for 2025
Regulatory changes at the Department of Education (DOE)—The Trump Administration has been very public about how the DOE will need to change. While I don't think the department will cease to exist, I believe it will be scaled down. The changes may result in increased congressional scrutiny and potential impacts on funding, all factors that can increase financial and legal risk.
Student mental health—This risk is not going away. However, it may be time for colleges and universities to consider managing it differently. In our first edition of HigherEdRisk, one of our industry experts published an article on mental health literacy. Introducing new philosophies and methodologies in this space may be another way to combat this significant risk.
AI—Ethical use of AI, the importance of AI literacy, and codifying how and when AI can be used by students and professors in academic and professional settings will be significant focus areas in 2025. Institutions must have formalized policies and training to combat bias and reduce risk. If this risk is not kept in check, I predict an increase in litigation which always increases costs. Our Fall edition included expert commentary on ways to combat third-party Risk and manage AI adoption.
Deferred maintenance—Colleges and universities have been lucky not to have significant incidents of bodily injury; however, that does not mean that this trend should continue. Deferred maintenance is not just a safety issue but a reputational and financial risk that is often not addressed at the board level. I like this quote from Moody's Corporation's shared by Higher Ed Dive as it demonstrates how risks are interconnected and failing to see that will only compound risk exposure -"Institutions can't put off spending on facilities forever. Doing so could exacerbate enrollment declines."
International students and potential travel ban—this is deeply political and uncertain. Still, its impacts could result in substantial financial risk if new countries such as China are added to the travel ban list. This risk should be on board and fiduciary radars regardless of the outcome.
Third-Party risk—This risk is often misunderstood, does not have a "home," and frequently lacks the proper resources and oversight. The time is now to have a Third-Party Risk Management program. This is not just a risk management function; it is a cross-functional duty that requires the participation of many stakeholders to be effective. Many institutions rely on third parties to perform critical functions. Strong contractual language and insurance coverage helps, but as we saw with Crowdstrike and National Student Clearinghouse, that is not enough.
Data privacy and cyber risks are consistently ranked top risks facing higher education. Moody's echoed this sentiment, rating the sector as "high risk." The interconnectivity of data privacy, cyber, and reputational risk cannot be underscored. However, while data privacy may fall under the cyber umbrella, it is not the same, and like Third-Party risk, it requires adequate financial resources bolstered by a cross-functional team and support from the top down.
Campus security—with the attack in New Orleans, school shootings, and a targeted attack on the United Health Care CEO in the past 30 days, physical violence is an unfortunate reality. The foundation of campus safety requires top-down support where all campus community members are involved. Comprehensive policies, plans, and procedures are paramount. Resources, both in funding and personnel, that include effective training and technology tools are essential. Institutions can be exposed to more legal liability without proper training and planning.
Education model changes—I believe that there will be an acceleration in the movement towards the three-year degree. This shift will require time and resources to expand these offerings to offset financial risks. Institutions will need to be more flexible and adapt to the needs of today's students.
College closures—2024 was a record year. I believe 2025 will be another challenging year due to the effects of the "enrollment cliff." However, I also predict that 2025 will include more mergers and acquisitions. It will be interesting to see how the Trump Administration will handle the recent summer regulations enacted by the DOE that made mergers and acquisitions more challenging due to the "change in ownership" process.
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