Higher education needs Apple-style innovation

OPINION:

College students returned to campus this year just as higher education’s financial model is buckling under rising costs, weaker demand and declining confidence in the value of a four-year degree.

Nearly 4 in 10 institutions do not expect to meet their enrollment targets for fall 2026. Yet private four-year universities now charge as much as $104,512 a year, even as undergraduate enrollment fell 1.6% last year.

Education is vital to human development, but it is not sacred. It is a product like any other, and when demand falls, costs must come down as well. If universities are to thrive, they must adhere to supply-and-demand principles and realign their offerings and prices with market demand.

Upcharging for something fewer people want is illogical in free market economies. However, universities have done so for decades because they have grown completely out of touch with American society. Those market forces are now starting to take effect.

Universities began to lose touch with average Americans in the mid-2000s, when scholarship shifted toward criticism of American capitalist values. That process culminated in the 2010s when woke ideology took hold.

Universities have spent the past 20 years positioning themselves at the center of those fringe cultural debates. Every issue that has torn American society apart during the woke era — including men in women’s sports and anti-Western social justice activism — started as an idea on a college campus.

From 2004 to 2024, business ventures and investments fueled a 133% surge in the total annual revenue of private nonprofit colleges and universities, from $140 billion to $327 billion.

Those universities then used the money to add unnecessary infrastructure and nonacademic bureaucracy, greatly inflating the cost of running these institutions. This spending did not make the product more valuable to debt-ridden graduates seeking well-paying jobs, and Americans noticed the disconnect. Still, American families have been saddled with the bill in the form of high tuition.

The bubble is now bursting because American families have had enough. Universities, in their greedy hubris, failed to anticipate that increased exposure to public debate made them more subject to fair scrutiny from families and prospective students.

Now, a critical mass of people no longer want the four-year diploma, which hiring managers increasingly value less than demonstrated skills or credentials. Yet to cover runaway budgets, institutions such as Temple University, Syracuse University and Pennsylvania State University still raised tuition after missing enrollment targets.

In 2010, 75% of Americans considered college “very important.” That figure now stands at 35%. A new report also shows that families’ confidence in the return on investment of higher education declined by 23 percentage points from 2023 to 2025. Parents’ interest in trade school as an alternative to a four-year degree has increased by 13% since 2019.

The free market can be the solution if universities learn the right lessons. Universities should look to Apple, which offers the scaled-down MacBook Neo and iPhone 17e at more accessible price points for customers who need just core functionalities.

That is what four-year institutions fail to offer: budget-friendly products that deliver what is needed by omitting what is not.

In recent decades, universities have relied on financial aid and federal loans to foster the illusion of affordability. Still, they have never pivoted in response to consumer dissatisfaction with the added frills that pull college further away from what young people need for their futures.

Cracker Barrel learned that lesson when it unsuccessfully tried to rebrand with a new identity and aesthetic. The proposed changes ignored why core customers loved the restaurant, and the business pivoted back to what worked for its patrons and bottom line.

The solution is clear: Universities must cut products and services that no longer attract prospective students, stick to core offerings and lower full tuition prices.

Higher education made itself into a business, despite academics’ protestations that it is not, and it must act accordingly to thrive.

Universities must prioritize streamlined operations that deliver core offerings at competitive prices, not additional bureaucracy for the price of a liver transplant.

• Zachary Marschall, Ph.D., is editor-in-chief of Leadership Institute’s Campus Reform and an adjunct assistant professor of arts administration at the University of Kentucky.