Higher education leaders are navigating one of the most consequential inflection points in decades. In Episode 12 of the EdUp Innovation Podcast, we sat down with host Dr. Brad Fuster to discuss: What will it take for institutions to survive and thrive in today’s environment?
The New Equation: Price × Outcomes = Value
For today’s students, families, and employers, this equation is increasingly out of balance. Students still believe higher education has value, but outcomes are not consistently strong enough to justify the price.
This gap is where institutional risk and opportunity live.
The role of innovation isn’t to add more offerings, but to deliver better outcomes at a lower cost. This requires rethinking the classroom experience, reevaluating high-cost “add-ons” like clubs, sports, or student services, and identifying what should be stopped, redesigned, or delivered differently.
Most institutions grew their way into today’s financial challenges, and without discipline, innovation just adds to the cost structure.
Innovation as a Survival Strategy
As closures accelerate across higher education, institutional viability is now directly tied to the ability to deliver value. The institutions that are surviving and growing are focused on two things: reducing cost structures, or price, and improving outcomes like completion and career.
Most institutions today aren’t attempting any radical transformations. Instead, they’re pursuing incremental innovation, stabilizing performance through improved retention, strengthened career pathways, and refined enrollment strategies.
Still, while incremental innovation can support short-term survival, long-term viability requires disruptive change. And today, most disruptive innovation is happening outside traditional institutions, where new entrants aren’t constrained by legacy cost structures or governance models.
Where Innovation Is Delivering Real ROI
For leadership teams under pressure to demonstrate results, there are several areas showing measurable return. Employer integration, which involves embedding employers into the academic experience or expanding internships and externships, produces stronger career outcomes and program relevance. Shared services models, where neighboring institutions split costs on IT, counseling, security, and purchasing decisions, reduce operating expenses and improve efficiency. Likewise, healthcare partnerships that shift costs to insurance billing can lower expenses without sacrificing student support. On the enrollment side, using data and technology to target specific student personas and personalize communications across the student lifecycle improve enrollment yield and retention. And in the classroom, leveraging AI and technology can make academic support more scalable.
The Bigger Opportunity: The 60 Percent Market
Even with these gains, the most significant long-term opportunity is largely untapped:reaching the 60-plus percent of the population who don’t pursue a traditional college degree. The institutions best positioned for that market can deliver shorter, lower-cost programs with clear career outcomes. Early movers, particularly in online models, have demonstrated what’s possible, but those markets are now competitive and saturated. Future success will require differentiated offerings, not replicating what worked in the past.
Rethinking the Business Model
Looking ahead 10 years, we would caution against searching for a single, all-fit business model. Success will come down to the fundamentals: strong outcomes aligned to workforce demand, pricing and timelines that meet student expectations, and delivery models built for a generation that grew up fully digital. Today’s learners expect integrated technology, an intuitive user experience, and real-time feedback—standards most institutions aren’t meeting.
Higher education is competing on experience as much as with education itself.
There are two categories of institutions best positioned for the future. The first are high-value, mid-tier schools delivering strong outcomes at a reasonable price. These stand to benefit as enrollment shifts away from high-cost institutions. The second are radical innovators. These are new or reimagined institutions willing to challenge every assumption about the educational experience, focusing on shorter, skills-based, career-aligned models that strip away non-essential coursework and deliver credentials in one to two years instead of four. Innovators are particularly compelling in fields experiencing talent shortages, though they’ll need to adapt continuously as AI reshapes job requirements.
The Cost Crisis, and a Path Forward
It’s unavoidable: the traditional four-year residential model will continue to become more expensive. To address this, institutions need to shorten the time to degree, partner for non-core services like security, maintenance, and compliance, and repackage existing strengths into new formats. Standing still is one risk, but trying to replicate high-cost models in new programs is even more problematic.
None of that works without a financial strategy at the center. Finance needs to shift from reporting to strategic advising, from siloed analysis to cross-functional alignment, and from historical data to forward-looking decision support. That’s FuturED Finance’s core work: helping institutions understand their financial levers and build a path forward.
A Final Thought for Leadership Teams
The path forward requires doing what matters, not simply doing more. Which outcomes actually matter to your students? What are you doing today to actually drive those outcomes? Where are you over-investing relative to value delivered? How are you aligning price, outcomes, and cost structure?
Institutions that can answer and act on these questions are the ones that will define the next era of higher education.