Recent news and trends in higher education paint a picture of an industry under immense pressure, with selective college admissions at the center of a perfect storm. From legal battles and new federal directives to significant budget cuts and institutional shifts, the landscape is changing at a rapid pace.
HIGHER EDUCATION FINANCIAL SQUEEZE: BUDGET CUTS AND A NEW ERA OF AUSTERITY
Universities nationwide are facing a period of financial austerity. Federal funding, a primary source of revenue for research and student aid, is being reduced and redirected. Among the factors leading to the squeeze:
- The Trump administration has targeted thousands of federal grants for termination, impacting over 600 colleges and universities. This has led to major universities like Johns Hopkins University, Stanford University, and Duke University announcing staff layoffs, hiring freezes, and budget reductions in response to the loss of research funds. For instance, Johns Hopkins has announced over 2,200 layoffs following a significant reduction in USAID funding.
- Changes to federal student aid are creating significant financial challenges, especially for low-income students. Proposed changes to the Pell Grant program could reduce or eliminate aid for millions of students, forcing them to take on more debt to complete their degrees. As federal aid shrinks, colleges may also be compelled to raise tuition and fees to make up for lost revenue, directly impacting students and their families.
- A new tiered excise tax on university endowments is placing a financial burden on some of the wealthiest institutions. This could impact their ability to fund scholarships, research, and faculty positions.
These financial pressures are forcing universities to make difficult decisions. Among the news we’ve read this summer:
- At the University of Chicago, which has an annual operating deficit of over $200 million, there are discussions about consolidating or eliminating low-enrollment departments within the Arts & Humanities Division. Departments like Comparative Literature, Slavic Languages and Literatures, and Germanic Studies are considered vulnerable. This situation is not unique to UChicago, as similar cuts and consolidations have been happening at other universities, including Brown University, Columbia University, and Dartmouth College.
- UNC-Chapel Hill has identified almost $70 million in budget cuts, about 2% of its total operating budget, campus leaders told the Board of Trustees late last month. The proposed cuts include up to $29.5 million for this year alone. The biggest share of the savings, $17.2 million, would come from reducing financial aid for out-of-state students. The university would cut the share of financial aid out-of-state students receive from 44% to 18%.
A NEW REGULATORY ENVIRONMENT: FEDERAL OVERSIGHT AND LEGAL CHALLENGES
Also making headlines this summer, the admissions landscape is being reshaped by new federal policies on admissions data reporting and ongoing legal battles, including accusations that colleges use early decision policies to limit competition, secretly continue using race-conscious admissions practices, and favor legacy admissions.
- President Trump has issued a directive to the Department of Education to collect comprehensive admissions data from all colleges and universities that receive federal student aid. This data will include disaggregated information on applicants’ race, sex, test scores, and GPA. The administration states this is an effort to increase transparency and allow the public to determine if admissions decisions are based on merit or race. Critics, however, warn that this could pressure colleges to favor applicants with higher quantitative metrics, potentially disadvantaging low-income and minority students.
- Several high-profile lawsuits have been filed. A class-action antitrust lawsuit has been brought against 32 selective colleges, alleging that their early decision policies are an illegal conspiracy that reduces competition for students. Additionally, the Department of Justice is investigating universities, including those in the University of California system, to ensure they are not secretly reinstating race-conscious admissions practices following the 2023 Supreme Court ruling.
- The practice of giving preferential treatment to applicants with family ties to alumni continues to face public and legal scrutiny. In California, legislation has been enacted to ban the practice at private colleges and universities. In a notable move, Stanford University announced in August 2025 that it would not accept state student aid to preserve its policy of considering legacy and donor status in admissions.
LEGACY ADMISSIONS
Following the Supreme Court’s 2023 ruling that ended race-conscious affirmative action, there has been increased scrutiny and legal challenges to legacy preferences. Critics argue that these policies disproportionately benefit wealthy, white applicants.
Stanford University recently garnered significant attention for its decision to maintain legacy admissions. The university announced it would no longer participate in California’s state-funded student aid programs to bypass a new state law that restricts private colleges receiving state aid from considering legacy status. This move allows Stanford to continue the practice, albeit with internal funding to replace the lost state aid. This decision highlights the lengths to which some institutions are willing to go to preserve their legacy admissions policies.
THE YIELD CHALLENGE: MANAGING GREATER UNPREDICTABILITY
Admissions departments are grappling with unpredictable yield rates—the percentage of admitted students who enroll. This has made waitlists a crucial tool for managing class size and meeting enrollment goals.
In an unexpected move, Duke University reopened its waitlist and admitted a new round of students in August, just weeks before the start of the academic year. This is the first time in recent history Duke has done so. This decision was likely due to ongoing yield challenges, such as a greater-than-expected number of students who “melted” away—decided not to enroll after paying a deposit, and lower-than-expected yield for international students who are increasingly looking beyond the U.S. for higher education.
In an interesting twist, the University of Michigan instituted a binding early decision program beginning with students applying for admission for the Fall of 2026. The Michigan Daily and other news outlets report that the university is adding the binding ED option to help manage its “yield rate.” The addition of a binding ED option will ensure that the university is admitting students who are truly committed, especially given the steady increase in out-of-state applicants using the non-binding EA option.
INTERNATIONAL ADMISSIONS
International students are a major source of revenue for many U.S. higher education institutions. They often pay full, out-of-state tuition, and this income can help subsidize the costs for domestic students, support financial aid programs, and fund university operations and research. They also bring unique perspectives, experiences, and cultural backgrounds to the classroom, which enriches discussions and helps prepare American students for a globalized world.
Today, the landscape for international students seeking to attend top U.S. universities is marked by a mix of uncertainty and even fear, the result of policy changes and political uncertainty.
WHAT’S NEXT?
With a new admissions season on the horizon, applicants to the Class of 2030 are staring down a more complex and unpredictable application process than ever before—shaped by shifting federal regulation, legal battles, and institutional changes. As we navigate this turbulent landscape, we’re here to report on every key development and emerging trend to help students and families stay informed and prepared.
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In addition, Maria is proud of her long-term volunteer work with Opera North (Lebanon, NH) in fundraising, marketing and audience engagement. She is an avid masters rower with the Upper Valley Rowing Foundation (Hanover, NH) and also serves as a member of its board of directors.
- Class of 2030 Early Application Trends: Reading the Tea Leaves - January 29, 2026
- Exploring the “International Ivies” - December 12, 2025
- Are Bots Reading Your Essay? How AI is Reshaping Selective College Admissions - October 30, 2025
