The Trump administration’s ongoing assault on American higher education has all but guaranteed one thing: college students and their parents will now get less—fewer faculty, research opportunities, student services and amenities—for the same (or higher) price.
Trump’s slash-and-burn approach has hurt nearly every college revenue stream. The vicious crackdown on foreign student visas will curb international student enrollment and the vital tuition revenue those students provide. Many schools rely on foreign students because they tend to pay higher net tuition prices. Federal funding freezes will halt research activity, push faculty out of academia and into private industry, and handicap maintenance and administrative work. Without a functioning Department of Education, college officials worry that Pell grants and student loan dollars may not be disbursed as usual. Any college with an endowment also has reason to worry—a falling stock market could lead to diminished returns this year.
So far, college leaders haven’t had enough time or information to stop and assess the damage. “The smaller colleges—the Catholic colleges, the Christian colleges, the women’s colleges, the HBCUs—that educate the vast, vast majority of students, all of them are feeling the effects of the disruption to the economy,” says Marjorie Hass, president of the Council of Independent Colleges. “It’s very hard to make good strategic decisions when you don’t know from minute to minute what the federal government is up to.”
Ultimately, colleges losing revenue will have to either raise money or cut expenses, and for most schools, increasing their prices is not an option. “College tuition is already very high, and the public has pushed back considerably on that,” says Bob Massa, a longtime enrollment consultant and co-founder of Enrollment Intelligence Now. During the current school year, set before President Donald Trump took office, tuition and fees at the average four-year, private nonprofit college were $43,350, up 3.9% from the prior year. Also high are average discount rates—the percentage each school knocks off the listed tuition price for students through “merit” scholarships—that entice students to enroll. In 2023, the average private nonprofit college discounted its listed tuition price by 56%.
At most schools, tuition prices for the 2024-25 academic year are already set. Students have applied, and they’re receiving acceptances and financial aid packages—it’s too late to raise rates in the short-term. But it may not be too late to cut some aid packages, loan guarantees and institutional scholarships.
Raising tuition is probably only possible for the top 10% of schools that have no trouble enrolling students, says Larry Ladd, a college governance, strategy and finance advisor at the Association of Governing Boards. “They will increase tuition, but it won’t be enough, by a long shot.” Ladd says of the top schools. “The lost revenue and cost recovery is staggeringly large compared to the small amount of offsetting revenue those institutions might get from tuition increases.” At Trump’s loathed Columbia, only a quarter of revenues come from tuition and fees. The total cost of attendance for the 2024-25 academic year is $93,417, though first-year undergraduates receive an average $76,265 in grant aid from the university and students from families that earn less than $150,000 annually attend tuition-free.
Another route the top schools could take is to enroll more American undergraduate students to make up for lost international and graduate enrollment. This could cause a trickle-down effect that would hurt smaller, lesser-known institutions, according to Massa. “If [top schools] begin to take more [American] undergraduates … then the smaller institutions are going to suffer because there’ll be fewer students to go around,” he says.
For the majority of America’s 2,000-some private, four-year colleges, any increase in tuition prices without a similar increase to discount rates could scare away potential students. “If a private university costs $80,000 a year, and I’m willing to discount half of that, then I get half of it in return. But if I’m only willing to discount 25% of that, I may get zero, because the student may not enroll,” Massa says. “If they need to get butts in seats, they’re going to discount, and you won’t see financial aid declining in any great way. As a result, what you’ll see declining is their net revenue. And when the net revenue declines and the budgets are in the red, several years of that will force institutions to either cut significantly or merge or close.”
Massa predicts “a significant reduction” in what colleges offer today, including research, classes and services to students. High inflation and tariffs will expedite this, says Ladd. “High inflation also results in lower tuition [revenue] in real terms, since colleges and universities can’t increase their tuition as quickly as their costs are increasing,” he notes. “That creates pressure to reduce expenses throughout the budget.” Inflation will also reduce employee compensation, leading to low morale and high turnover. Technology—a big line item for many colleges—will also get more expensive because so much of it is produced overseas.
But the biggest impact of Trump’s economic chaos will be on the affordability of enrolling. Says Ladd: “Colleges and universities need to worry, first and foremost, about whether they can provide the increased financial aid that many students will need.”