The Annual Kelchen Review: The Top 10 U.S. Higher Ed Stories in 2025

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 with Robert Kelchen, our favourite guest from the United States. He’s here to talk about the top 10 issues in higher education in the U.S. over the past 12 months. He needs no introduction; this episode needs no introduction. It’s a great annual favourite. Robert, welcome.

The World of Higher Education Podcast
Episode 4.14 | The Annual Kelchen Review: The Top 10 U.S. Higher Ed Stories in 2025

Transcript

Alex Usher (AU): Hi everyone. I’m AU, 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 with Robert Kelchen, our favorite guest from the United States. He’s here to talk about the top 10 issues in higher education in the U.S. over the past 12 months. He needs no introduction; this episode needs no introduction. It’s a great annual favorite. Robert, welcome.

Robert Kelchen (RK): Thanks for having me. The problem with this episode is nothing really happened in American higher ed in 2025.

AU: Good. So as you can tell, everyone, Robert’s into the soft-sell approach to higher education coverage. Thanks a lot for joining us. Robert, why don’t you start us off with number 10.

RK: 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 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. A number of states have started to cut back, freeze proposed cuts, and the state financial situation in the U.S. doesn’t look as rosy as it did a year or two ago. More states are looking at budget deficits.

When there are budget deficits, higher education usually ends up losing out. So 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.

AU: Let’s go to number nine. In a normal year, I think number nine would be number one, but go ahead.

RK: It’s 2025: the efforts to dismantle the U.S. 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’s 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 has still tried to shift a number of the functions of the Department of Education to other federal agencies. There have also been cuts to the Department through eliminating contracts and mass layoffs. The staff of the Department of Education’s main statistical agency has been reduced back to 1869 levels—at three people.

So now 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.

AU: Great. What about number eight?

RK: Number eight: athletic spending keeps rising. In the U.S., 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 the department head version of that 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 this year just to make football coaches go away. Football suffers from the same problem other athletic programs do: you can only win half your games on average, and every program thinks they can be the one to do better.

And then on top of that, there’s a massive settlement with the 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 them can turn to donors to get the money. Others, it seems like they’re turning to students. And here at Tennessee, they’ve basically put a tax on tickets to help pay that $20 million. And with the fan base here, it’s worked out.

AU: Interesting. And I hear at UCLA there’s been quite an issue about getting donors to try and, you know, pay to—I’m not even sure I understood the example. But they were in effect, or at least one person was saying, basically, UCLA is advising its alumni to dodge taxes by donating to certain charities that will act in lieu of NILs.

RK: Yeah, there are a lot of interesting tax strategies going on, and also interesting ways to continue to shield athletics from typical public records laws in states. That usually involves nonprofit organizations that are closely affiliated, but not exactly tied to the public university—somewhat similar to what traditional university foundations have done to make sure the state couldn’t come in and take their money.

AU: Amazing. Number seven.

RK: Number seven: a big focus on DEI and admissions. I’m focusing here on what’s happened at the federal level, where the Trump administration came in talking 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 certainly remember that 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 a mess. We’ve seen a memo from the Department of Justice basically saying anything related to diversity has to stop. And then also some pretty massive new proposed data collections to track what’s going on with DEI, particularly in elite college admissions.

At the same time that the statistical arm of the Department of Education has been more than decimated, they’re proposing a massive new data collection that they estimate would take each university in the country at least a week’s worth of person-time to complete. It involves going back as much as seven years of admissions data—basically identifying individuals in some cases. They want incredibly detailed information about admissions to make sure there is no discrimination going on by race and ethnicity.

And collecting data back to 2019 completely blows up institutions’ data infrastructure. We’re going to have a lot of time spent on it, and any data going back that far is just not going to be useful.

AU: Let me break this into two questions, because I think there are a couple of things to follow up on. The first is: as you say, there was the Loper Bright decision—which I think was your number one item last year—that said the executive wouldn’t be able to do anything. Has that been tested in court yet?

One thing that has struck me about the first ten months of Trump is that he tends to be moving at a speed that the courts can’t control. He does lots of things and people comply with them, and then later the courts come along and undo it. That’s been the case with most of the freezes on funding in science. Has this been tested in court yet? Has anyone tried to hit him that way, or is it just that the court is fine with it now that there’s a Republican president?

RK: It’s being used with at least some success at the district court levels, but very little has actually gone through the regular process in the U.S. Supreme Court yet. Almost everything has gone through what’s called the shadow docket, where a small group of justices basically do an emergency opinion that holds the fort until they go through the regular process—which, for some of these items, is simply too late, like employee firing.

But for changes to data collection or what institutions are required to do, that may still be relevant. It may come to the Supreme Court. But the Supreme Court has nine people with a lot of legal cases. It may not actually end up getting taken up by the Court, which means the district court ruling would stand.

AU: The second thing is how they’re using this data. Is it too cynical to say that if Black and Latino numbers start to rise, they’ll assume you must be doing something wrong and penalize the institution? Is that the reason for this?

RK: Yeah, that’s the way at least universities are interpreting it. There is a lot of pressure to make sure that admissions rates don’t go up. But the challenge is that for a lot of these groups, the numbers are pretty small—there’s a lot of noise. And there may also 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’s an incredibly complicated data matrix that I don’t have confidence institutions are going to be able to fill out correctly, or in a way that preserves the privacy of individuals which is the argument against a federal unit-record data system in the U.S. for decades.

AU: And of course it’s all going to be overseen by three employees at the DOE, so that will be fun. Let’s move on to number six.

RK: Number six. It wouldn’t be a top 10 list in 2025 without some mention of artificial intelligence—or, as Secretary McMahon accidentally referred to it at one of her talks, “A-one” instead of AI. But the stakes are high, so 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 how they don’t want to hire entry-level people—which works great for them for a few years, but then they can’t find mid-level people.

And on top of that, the massive scope of AI in the economy right now—with all the debt being taken out and all the electricity being used for data centers—is starting to distort institutions’ maintenance budgets. I worry about it affecting 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 where, at one end, AI is amazing: poverty is eliminated, growth is almost infinite. At the other end, 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.

AU: Robert, we’re at number five.

RK: Number five is international student enrollment in the U.S. So far in 2025, international student enrollment is down a little bit, but it’s not the worst-case scenario—that was certainly in play. I think the worst-case scenario is: President Trump gets on Truth 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.

Something close to no change is also 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 want to let anyone in at this point.

And this really hits graduate education hard because we have a substantial number of international students in the U.S., but they’re disproportionately at the graduate level. That affects research, it affects teaching, and it has kind of put research universities in pause mode while they wait to see what’s going on.

AU: You know, it was interesting back in May when the government tried to put a halt to Harvard’s ability to recruit international students. Every country in the world—pretty much—I do the 15, which is that world roundup of stories around the world. It was remarkable how few countries didn’t have stories about their Harvard students. They were doing interviews with students who were there, or students who were supposed to be 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 higher education coverage. So yeah, that’s not just a U.S. story, but very much an international one too.

RK: And just that broader issue of international students not being welcome—it’s not just the U.S. thing either. You’ve seen it in Canada, Australia, the U.K., and that’s created opportunities for countries like Vietnam to all of a sudden become players.

AU: Four.

RK: Number four is: the federal government has done a lot on DEI, but states have done even more—controlling employee speech and what faculty members can and can’t teach in the classroom. 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 were fired for expressing their opinions on the matter.

We’ve had a number of faculty members across the country who have either been terminated, suspended, or have processes still ongoing around that. And then there’s the broader push against DEI. It took down the president of Texas A&M, one of America’s largest research universities.

The backstory on 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.

AU: What about number three?

RK: Number three is: how in the world is Harvard the hero in American higher ed? Harvard is often seen as that snooty institution where they don’t accept many students, they spend ridiculous amounts of money, and they’re just not that valuable. That’s kind of 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 this with 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: a $75 billion settlement that got announced on the Friday evening of a four-day holiday weekend here in the U.S.

AU: Most of those institutions have been private institutions where, at least in theory, the federal government is the biggest funder in many ways. But it’s also included the University of Virginia, and I think another one—unless they’ve settled and I missed it. The other big one that hasn’t settled is UCLA.

RK: Yes. UCLA is the big public that has not settled. That’s where state politics become important. California is strongly under Democratic control; they would probably lose their state funding if they settled.

AU: Let’s go to number two.

RK: Number two: the American political system is rather dysfunctional for passing major legislation, in part because in our U.S. Senate there’s still a filibuster. That means you have to get 60 out of 100 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 they’ll pass things they normally wouldn’t. The other—and the more thoughtful one—is 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 known here 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 a federal grant for 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.

AU: If we had a drum roll—maybe Sam can add one in post-production here—but drum roll: number one.

RK: Number one is the Higher Education Compact. That is the Trump administration’s effort to get institutions to sign on to a list of ten demands that essentially 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, and they sent this out to nine universities. None of them chose to publicly sign on. Most rejected it outright. 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 ones like the New College of Florida and Valley Forge Military College.

AU: I think High Point said yes too, didn’t they?

RK: I don’t think anyone has actually said yes. I think they said they’re “interested.”

AU: I see. Okay.

RK: But the moral of the story—and anyone who works in fundraising knows this—is you don’t announce anything until you are pretty far along to your goal. The administration, I think, believed that institutions would be under so much pressure that they would sign on. But the reason why the elite institutions said no was by using the Trump administration’s own arguments about merit: that research grants in particular should be based on merit, not anything else.

And this compact proposed to maybe give institutions a leg up if they signed on—or maybe penalize them if they didn’t. That’s still not clear. 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.

AU: That’s a fantastic number 10. But Robert, I’ve got to ask you why one of them is missing—and I’m being a homer here. It’s a Canadian thing. What about the Santa Ono story?

I mean, 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? Here’s someone with some influence in the higher education field who signaled that he wanted to play with the MAGA folks—and it turned out the MAGA folks didn’t want to play with him. And so he was left without a job, having quit one institution before being finally accepted at the other. What about that story?

RK: Yeah, and that really shows that traditionally, across the country, leaders in any form moved between conservative and liberal states without any issues. Now there’s really a wall put up where you have to choose a side, and it’s hard to move. In Florida, they really wanted someone 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 Ono.

And I just keep going back to: who wants to be a university president at this point? It is a brutal job. I mean, the good thing about it is it pays well, and if you can keep the legislature happy, you can do some really good things. The odds of you being there for a long time are pretty low. So real-estate advice: rent, don’t buy.

AU: Robert, thank you so much. You’ll join us again next year?

RK: Sounds good.

AU: 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 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, 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.

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