Falling enrollment and growing pressure on funding and traditional tuition-driven models are pushing institutions toward more intentional, scalable revenue strategies.

The pool of college-ready high school graduates is entering a projected long decline: Western Interstate Commission for Higher Education’s (WICHE) latest projections have the class of 2025 as the peak, with graduate counts falling through 2041.¹

For some smaller private institutions, the pressure is clear; some have closed or have been acquired by stronger institutions in the past year.

The response is a shift from one-off revenue ideas toward institution-wide strategies. Universities that have long been “very tuition-dependent, especially on undergraduate tuition,” as Murphy put it, are now looking to generate non-tuition revenue through monetizing research; name, image, likeness (NIL); underutilized real estate; and sports revenue.

For Baylor University, the driver is affordability. “We’re really trying to diversify those revenue streams so we become less and less dependent on tuition, particularly undergraduate tuition,” said President Linda Livingstone. “That really is because of the concerns and questions about affordability.”

Several institutions have already built structural vehicles for this. Purdue University defined alternative revenue as all revenue outside undergraduate tuition and set a goal to scale it by $100 million over four years. Vanderbilt University created Vanderbilt Enterprises to build sustainable new revenue streams in areas closely linked to its existing institutional strengths.²

“Every institution is challenged with finding the mission-appropriate way to generate revenue that’s sustainable and meaningful.” The takeaway, he said, is that institutions “shouldn’t discard the little things, because many of the little things can add up to a big thing.” The ability to monetize existing assets “in a sustainable and mission-appropriate way is really important and something that every institution, regardless of size, is dealing with,” Olt said.

Mission is shaping institutional strategy

Institutional identity shapes strategy—from hiring and partnerships to governance, research priorities and the way leaders communicate change. The challenge for institutions is determining which diversification strategies align with their mission and strengths.

For Kelli Shomaker, senior vice president for business and administration and CFO of Auburn University, that filter comes down to three words written on the institution’s seal. “One is ‘instruction,’” she said. “We begin by instructing, as a land-grant institution, all the citizens of our state. The second word is ‘research.’ It is our job as a land grant to bring practical, everyday applicable research to the citizens of our state, the nation and the world. And the third word is ‘outreach.’ It is our job to take what we learn in the classroom and take it to the citizens.” That mission, she said, “guides me every single day in making the financial decisions that I need to make about Auburn University.”

Livingstone described a similar approach. “Every decision that we make at Baylor, particularly the most strategic decisions, are always driven back to that mission statement,” she said. Under Livingstone, Baylor made R1 research status a concrete institutional goal, reallocating funds to doctoral programs and research grants through its Baylor in Deeds strategic plan, which emphasizes interdisciplinary research in engineering, computer science and the health sciences—all while preserving its faith-based identity.³

Olt, Wesleyan’s CFO, pointed to Baylor’s as an example of how mission can lead schools toward different strategic priorities. While praising Baylor’s graduate and professional growth and its focus on “meeting a market need in a moment,” he said the same approach would not fit Wesleyan’s playbook.

“We believe in a really broad, liberal education,” Olt said. “We want to create creative, innovative minds, critical thinkers, people that can dialogue with people who disagree with them. But we also know you need a job, too.”

ERP modernization reaches far beyond the IT department

As colleges and universities face tighter budgets, rising operating complexity and growing expectations for transparency, many are finding that manual processes and disconnected systems can no longer support the decisions leaders need to make. That pressure is accelerating enterprise resource planning (ERP) modernization  and automation across finance, procurement, tuition collection, risk management and governance—not just IT.

As Gerry Murphy noted, the push toward automation is only growing as AI raises expectations for faster, more connected institutional systems.

At Baylor, ERP modernization was never simply an IT project but a test of whether the whole institution could change how it works, Livingstone said.

Baylor’s ERP investment proved critical during a recent budget assessment, Livingstone said. “If we had not implemented that ERP system several years ago, we would not have had the transparency into our financials at a granular level that we needed to engage in the budget assessment process,” she said. “In fact, we had department chairs and deans who said, ‘I never knew that much about my budget before.’”

Career outcomes have always mattered to colleges and universities. What’s changed is the scrutiny: With skepticism about the value of a degree, tuition sensitivity and enrollment pressure all rising, graduates’ ability to secure meaningful, well-paying jobs now sits closer to the center of institutional strategy—shaping enrollment, reputation and long-term financial health.

“It’s not just about graduation rates or scores,” Osbourn said. “It’s about what that outcome actually looks like. What jobs do you get? Are graduates well-paid?  This is a critical factor which is increasingly driving enrollment and the success of the school overall.”

Some leaders framed this as a core expression of their institutional mission. Baylor’s Livingstone said the university’s responsibility extends beyond preparing graduates for their first job—helping them “ adapt and grow as the economy and workforce evolve” and equipping them to be continuous learners and critical thinkers as technology reshapes the work they’ll do.

Leaders emphasized that financial literacy, career readiness and personal development should be embedded throughout the student experience, from orientation through graduation, rather than treated as standalone initiatives.

Institutions are also working across a wider network—bringing together peer institutions, employers and community partners to support students at every stage. As Osbourn said, “We’re  trying to help organizations prepare their students to be successful by partnering across the whole higher education ecosystem,” pointing to efforts ranging from workforce training and continuing education to résumé reviews, interview preparation and financial literacy programming.

Wesleyan’s Olt added that workforce readiness is driving a “curricular evolution,” with new technologies such as AI reshaping what institutions teach and how. For Shomaker, the throughline is affordability: “We have to keep higher education affordable and ensure students see a meaningful return on their investment.”

College athletics enters a new era of professionalized operations

Colleges and universities are navigating a rapidly changing athletics landscape as new compensation models, shifting conference affiliations and rising operating costs reshape financial planning.

The financial model shifted in the 2025-26 academic year on two fronts. Alongside the third-party NIL earnings that have reshaped recruiting since 2021, participating NCAA Division I schools gained the ability to direct up to $20.5 million a year in institutional revenue to student-athletes—the first time those schools could compensate players directly rather than through scholarships alone.⁴

Athletics remains a powerful driver of institutional visibility and engagement, creating new pressures for institutions to balance investment, innovation and financial sustainability. Baylor’s Livingstone highlighted this challenge, noting that as a Christian university, “affordability matters a lot”—even as the school works to balance long-term competitiveness and mission.

Auburn’s Shomaker noted the role J.P. Morgan played in facilitating these conversations by bringing “a whole set of experts that have been working in the space for years” to the university to engage in “a direct conversation with myself, the president and the athletic director about how to actually make this new enterprise of NIL financially sustainable for the institution and for the athletic department.”

The new compensation model is also prompting CFOs to rethink capital structure. Osbourn noted that as institutions absorb these costs, some are establishing commercial paper programs or working more closely with their endowments—ensuring they can access liquidity quickly and stay nimble as NIL evolves.

Michigan State University is another example. The university designed Spartan Ventures to professionalize athletics operations and create new revenue engines with commercial discipline. Villanova University’s athletic department is building a sustainable funding model through philanthropy and corporate partnerships. Across institutions, stadiums and arenas are being reevaluated as “365-day” mixed-use assets rather than game-day-only facilities.

While NIL and the evolving NCAA landscape are forcing institutions to rethink the financial model of college athletics, they are also creating new responsibilities for student-athletes—many of whom are managing significant business and financial decisions for the first time. Kayvon Thibodeaux, a New York Giants linebacker among the first student-athletes to earn from NIL after the 2021 rule change, thinks these efforts should begin early. Financial education, he said, “should be a part of that early freshman orientation.” And the stakes are real: “Student-athletes are in charge of their businesses now,” he said—making it essential for institutions to build the support systems needed to help them succeed while still in school.

Where mission, minds and money meet

Across all five trends, one conviction runs consistently: Institutions that navigate today’s financial pressures most effectively treat mission not as a constraint on strategy but as its foundation.

From revenue diversification and ERP modernization to the evolving economics of college athletics and student financial readiness, the themes that emerged reflect a single underlying challenge: sustaining an institutional identity that is often more than a century old while adapting fast enough to meet what’s next. The institutions best positioned to do both are those building the financial infrastructure, operational discipline and cultural alignment to treat all of it as one strategy, not separate problems.

How J.P. Morgan serves higher education

J.P. Morgan works with colleges and universities across the country to navigate the financial and operational decisions that shape institutional performance—from treasury and liquidity management to strategic advice on capital structure, revenue diversification and long-term planning. We’re here to help higher education leaders build the financial foundation their institutions need to grow, adapt and fulfill their mission for generations to come.