Report: Higher Ed Faces Intense Financial Pressure
A new report from EAB finds that U.S. higher education institutions are facing a confluence of political, social, and market pressures, leading to tighter budgets and reduced autonomy. With finances under strain, procurement decisions are receiving greater scrutiny for cost-effectiveness and compliance assurance. This environment increases the demand for solutions that provide risk mitigation and operational efficiency.
- Public colleges and universities are facing an April 24, 2026, deadline to comply with the Department of Justice's new rule under Title II of the Americans with Disabilities Act. This requires all web content, course materials, and mobile apps to meet the Web Content Accessibility Guidelines (WCAG) 2.1 AA standard, shifting from a reactive accommodation model to proactive, comprehensive accessibility. - The financial strain is exacerbated by state-level budget cuts; at least 15 states proposed or enacted funding cuts in 2025. For example, Washington state cut 1.5% from public four-year institutions, and Virginia paused $600 million in funding for higher education infrastructure projects. - Federal funding for university research is also under pressure, with preliminary fiscal 2026 budget proposals including significant cuts to the National Institutes of Health (NIH) and the National Science Foundation (NSF). These agencies provided a total of $60 billion in university research funding in fiscal year 2023. - A recent federal rule change, effective July 1, 2026, eliminated the Grad PLUS loan program, which previously filled an estimated $14-15 billion annual gap between tuition and other federal loans for graduate students. This adds significant revenue pressure on institutions with high-cost graduate programs. - These budget shortfalls have led to tangible consequences, including hundreds of job cuts at institutions like Michigan State University and program reductions at the University of Minnesota, which is facing a $115 million shortfall. - In response to budget pressures, procurement in higher education is shifting from a focus on cost-cutting to creating strategic value. A survey of Chief Procurement Officers found that their top challenges included budgetary constraints amid inflation and ensuring cost-efficient quality.
