The bursting of the higher education bubble has finally struck its first blow, and it is a serious one. Several major public universities have announced multimillion dollar budget cuts in January, citing enrollment declines among other factors. Pennsylvania State University expects to cut $94 million from its budget starting in July 2025. The University of Connecticut (UConn) announced significant budget cuts in response to its projected $70 million deficit. And the University of New Hampshire (UNH) will slash expenses by $14 million.
These cuts were a long time coming—higher education is facing an enrollment cliff, even as it continues to spend on administration and student services like there's no tomorrow. Pandemic-era emergency funding could only hold off the reckoning for so long. As university administrators rush to blame their state governments for providing insufficient funds, state legislators should remain staunch in enforcing fiscal discipline on universities. There's still a long way to go to make higher education cost-effective.
