Higher education is constantly trying to solve the trust problem with better messages. But the real problem is not how we communicate value; it’s a model we ask people to believe in.
We all know polls, such as Gallup and Pew, show declining confidence in higher education. In response, institutions have become increasingly dependent on marketing and product differentiation. The thinking is straightforward: Communicate value effectively, and opinion will follow. But this avoids the most important question: What business are we really in?
The cost of a traditional undergraduate education is now out of reach for many middle-class families, in many cases even with financial aid. When higher education talks about value, we cite the difference in lifetime earnings between those with a bachelor’s degree and those with a high school diploma—even though that sounds like an unpredictable reality in a labor market about to be disrupted by AI. We identify quality benefits such as “learning to think critically” and job readiness, often without consistent or measurable results.
Ultimately, we struggle to define value clearly enough to justify the quarter-million price point. More importantly, value—no matter how well-proven—is considered if the product itself is unattainable.
Choke Point of Prestige
The current model of higher education doesn’t just operate under a deficit—it’s built on it. In How the Ivy League Broke AmericaDavid Brooks describes a system that, a hundred years ago, was clearly designed for some. In the middle of the last century, reformers like James Conant pushed for merit-based access to universities, and policies like the GI Bill greatly expanded who could attend. The expectation that talented students go to college became a staple of American life. But the program did not increase energy and desire to the same extent.
Instead, the choice itself is a proxy for value. Since the late 1980s, the rates are similar US News & World Report high selectivity and small class sizes, effectively rewarding institutions for rejecting students, not teaching many of them. Fame was not only tied to quality, but also scarcity.
That shift continues to have dire consequences for how the system is priced and marketed. The most selective institutions set the tone for the market, creating price gains and placing their subordinates. As demand increases, costs increase. As costs rise, choice becomes even more important. And institutions have little incentive to expand access if doing so risks undermining their perceived reputation.
With a few notable exceptions, population growth has far outstripped the growth of seats in highly selective institutions, making it difficult to disrupt the system not only for today, but for the future as well.
Cutting Out Discomfort in Machines
This deliberate lack creates a tension that has become increasingly difficult to ignore. Higher education continues to position itself as a social good, an engine of social mobility, a pathway to opportunity, a foundation of a democratic society. All of this is true for those who want and can access a college education. But the basic market incentives of the system tend to go in the other direction, rewarding institutions that invest in choice over access and strengthening the four-year model that does not meet the needs of many students (including 30 to 40 percent of returnees, adults or full-time workers).
The dissonance is visible in society. When less than half of Americans hold a bachelor’s degree, it’s easy to see higher education not as something shared, but as a gateway—expensive, selective and far removed from the lives of many families. The result is a credibility problem: As long as the program talks about social movements and social good while showing a lack of value, reach and structure, those messages will struggle to get through.
Rebuilding trust and working toward our goals as equals will require more than better storytelling. It will require a real structural change: rethinking how we call, how we define value and how we measure success. That kind of change is difficult, in no small part because it requires money. Institutions need a margin for evaluation, moving from the current model to something more responsive to market realities and public expectations. But tuition has almost reached its effective ceiling, and price sensitivity is already reducing demand and reinforcing elitism. So where does that flexibility come from?
Rethinking the Model—And Ways to Change It
More and more institutions are already experimenting at the edges, monetizing assets, pursuing public-private partnerships, exploring mergers. We are also likely to see new profit-sharing models combined with employee training. But these are incremental responses to a larger structural problem.
Another, albeit uncomfortable, place to look is gifts. Designed to sustain institutions over time, endowments are constrained—legally, structurally, and culturally—in how they can be used. At the same time, they represent one of the few sources of capital capable of financing meaningful change.
This is not an easy proposition. Donor intent, governance and long-term stewardship all matter. But as economic pressures mount—decreasing federal budgets, threats to federally funded research, declining demographics, rising price sensitivity and the uncertain impact of AI—we must ask whether traditional ways of raising money are up to the scale of the challenge ahead. Public criticism on that point is becoming more and more direct. As NYU professor, entrepreneur and author Scott Galloway recently put it, “If you’re sitting on a $50 billion endowment and you’re only bringing in 1,500 kids a year, you’re no longer a public servant. You’re a hedge fund donating classrooms.”
A Question Worth Answering
For decades, scarcity has served higher education well. It reinforced ideas of quality, continued demand and generated significant charitable donations. But that narrative is collapsing under the weight of a model and price tag that is driving many Americans away and creating a credibility gap that could take decades to mend.
Which brings us back to the core question: What business are we in? If the answer continues to depend on scarcity, we must be clear about the trade-offs and the costs that come with them. We are already seeing those costs in declining enrollments, facility closures, downgrading of ratings agencies in the industry and eroding public confidence.
If not, the work ahead is very difficult, and very urgent: finding ways to reduce costs, increase access and create buildings designed for working adults. Doing so is our best example of reorienting our model and the community—and the machines—we claim to serve.
