Neoliberal Policy Hollowed Out Universities. Now They Are Collapsing.

If education is indeed the great vehicle of social and economic mobility, then higher education is no longer delivering the promise of the “American dream.” In fact, this “dream” has become a fiscal nightmare. Colleges and universities saw 9,000 job cuts and buyouts in 2025, and several college closures, mergers, and looming budget crises have already been announced in 2026. Portland State University is one of the most recent casualties, with a projected deficit of $35 million.

How did we get here?

Universities have been operating like corporations for quite some time now. Business terminologies — like return on investment (ROI), efficiency, strategic alignment, move the needle, transparency, buy-in, revenue generating, burnout, bottom line, deliverable, best practices, and others — have been normalized in strategic plans and administrative reports.

The boards of trustees and presidents running these academic corporations/factories have been boldly claiming that education is business. And just as businesses fail due to strategic missteps, poor financial decisions, and various forms of mismanagement, this “business” called higher ed is on the brink of a great collapse. This collapse has not happened overnight. It certainly did not start with the COVID-19 pandemic. It certainly did not start with blocking international students from attending U.S. universities. It certainly did not start with Donald Trump and the resurgence of McCarthyism, although the various draconian attacks on higher ed under his presidency have exacerbated the collapse.

Decades of mismanagement, fiduciary irresponsibility, a lack of shared governance and accountability, and divestment are responsible for a plethora of failures. Irrespective of these failures, university presidents and boards have been transparent about their singular mindset (at least in their visible actions). To them, growth is essential, but such growth can only take place by cutting various services and programs that are no longer deemed “essential.” Faculty and staff at many institutions have raised warning flags, insisting that universities cannot cut their way to growth. Such illusory growth will weaken programs and prevent students from truly being educated. Such short-term growth will ultimately threaten the long-term foundation of higher ed and lead to the collapse of one of the biggest arenas of 21^st-century thought: the university.

There are also other reasons for this collapse. For decades, universities have overspent on real estate, building fancy residence halls, offering attractive dining services, and raising tuition for students. All of this “added value” has been accompanied by cuts to essential student services (particularly those serving the most marginalized students) and insufficient compensation for overworked faculty and staff. Recent reports by the American Association of University Professors have found that faculty salaries still have not recovered from the decreases they saw during the early COVID-19 pandemic.

While faculty salaries have declined, large investments in athletics, online courses with low completion rates, and other designer programs have drained operational costs and endowments. Decades of reduced investment in the well-being of faculty have led to widespread burnout, watered down the system of tenure and shared governance, and led to the rise of the most exploited class in higher ed: the gig hustlers called “adjuncts.” This system, which Adrianna Kezar calls The Gig Academy, has created serious inequity and contributed long-term damage to faculty morale.

The infrastructure of higher ed has been further damaged by administrative bloat, with institutions hiring consultants — like enrollment management companies — that demand hefty price tags, all while cutting essential staff and overworking the ones that remain. In 2023, Forbes reported on this “skyrocketing” bloat and warned that such exponential growth in non-instructional staff in higher ed will drive up the cost of tuition and push vulnerable institutions to the brink of financial crisis. Meanwhile, due to staff cuts, overworked and underpaid faculty and staff are being asked to meet the demands of students who are increasingly coming to them underprepared and with various issues of mental health, food insecurity, homelessness, and learning styles and disabilities requiring multiple accommodations.

But unlike corporations, there is no government backing to bail universities out of their millions of dollars in structural deficits. They are simply closing or merging, destroying the lives of faculty and staff at various ranks and causing serious educational derailments for their students. The age of “the great resignation” that we witnessed during the pandemic has been replaced by “the age of massive layoffs” in higher ed. In my own state of Oregon, sweeping academic restructuring is underway, with 36 faculty layoffs and the closure of the award-winning and nationally recognized University Studies, a general education interdisciplinary program.

Let’s face it: The greatest danger facing higher education is not the “demographic cliff” but the loss of its fundamental mission to educate students. This shift has been accompanied by the loss of public trust in higher ed to serve the public good. The greatest danger facing higher education is not in its ability or inability to provide students with “job-related skills and training,” but the increasing and crushing debt, akin to a mortgage, that students and their families will be struggling to pay for decades.

No university education should cost over $60,000 per year to deliver just an undergraduate degree, which only a handful can truly afford. And these days, some universities are charging over $90,000 per year. There is no justifiable ROI for this kind of exorbitant cost. Yet, most of us who have been in higher ed for a while now know well that the millions of dollars of structural deficits that almost every university is currently facing did not just accumulate overnight. They are a result of shifting priorities.

Universities are no longer mission-driven to create critical, thoughtful, responsible, and well-rounded citizenry to participate in democracy and serve the public good. Instead, higher ed has traded its long-term intellectual benefits for short-term market and profit-driven (sometimes predatory) programs, with the sole and narrow purpose of training a generation of students for the workforce. This focus on job training, under the umbrella of “professionalism,” may or may not even succeed given the volatility of job markets in the age of artificial intelligence. Yet the disciplines that will be necessary to combat AI, like the humanities, are routinely being devalued.

While university administrators are speculating like gamblers to gauge which revenue-generating “programs” will ultimately survive, they are reducing, cutting, or hamstringing the disciplines in the arts, humanities, and sciences that have a long and storied tradition of cultivating “critical thinking.” Yet this strategy conflicts with studies that show the liberal arts, particularly the humanities, are valuable in terms of long-term employment prospects. According to the Mellon Foundation report “Humanities Graduates Can Find a Great Job. It’s Time to Make This Fact Known”:

The American Academy of Arts and Sciences reports that, at latest count, 96.3 percent of terminal humanities bachelor’s degree holders between the ages of 23 and 32 were fully employed, a share that is on par with that for degree holders in the same age range across all fields. Further, the earnings of terminal bachelor’s degree holders in the humanities are comparable to those of their counterparts in the behavioral/social sciences and the life sciences, while the job satisfaction levels among humanities graduates are in line with those of degree holders in all fields.

This and other reports emphasize that students need to learn and practice deep critical thinking, problem-solving, and ethical reasoning as basic skills to enter and succeed in the job market.

In response to the closure of Hampshire College, Ken Burns, one of the school’s most celebrated alumni, hit the nail on its head: “The greatest danger that faces higher education,” Burns said, “is this transactional tendency that everything is about an exchange that ultimately is economic.” What is lost in this game is the mission that education should be “transformational.”

As bell hooks wrote in Teaching to Transgress: Education as the Practice of Freedom, “The classroom remains the most radical space of possibility in the academy.” These days, in the age of fascism and corporatization, any radical space is a threat, and every effort is being made to destroy those threats. Federal policies target disciplines that challenge the status quo or question power structures, like sociology, pushing for them to be eliminated from the curriculum altogether.

This transformation was underway long before the current right-wing attacks on higher education, as universities slowly eroded critical programs through the use of the terminology of “academic prioritization.” Recently, “academic prioritization” has been replaced by new terminologies of “long-term sustainability,” “strategic growth potential,” “indoctrination,” and “demand programs.”

Irrespective of these terms, the end goal is to reduce and eliminate programs, mostly in the humanities, that have created transformational spaces for generations of students, particularly those from marginalized backgrounds, those who are economically disadvantaged, and first-generation students. Colleges and universities around the country have eliminated humanities majors in art, music, theater, philosophy, history, religious studies, global languages, gender and sexuality studies, and ethnic studies, citing decreased enrollments.

In April, the University of Montana eliminated its master’s degree program in English, focused on Literature and Ecocriticism, raising serious concerns about the university’s identity. “English is such a fundamental core subject within the humanities, and it’s almost like the heart of the humanities is being cut out,” said English Department Chair Louise Economides.

The University of Montana is not the only university where the “heart of the humanities” is being cut out with little to no conversation. The attack has been relentless nationally. Eric Hayot and Matt Seybold have described this crisis as “a crisis of civil society writ large.” They write:

There is no condition in which the humanities are under attack in which the whole university is not under attack. There is no condition in which the university is under attack that the whole of educational infrastructure, public and private, from pre-K up, is not under attack. And there is no condition in which education is under attack in which civil society can remain unimperiled.

Yet none of this is a surprise. While the right-wing attacks on these disciplines and departments have been relentless in recent years, faculty have been witnessing this slow collapse of the arts, humanities, and sciences for quite some time now. The market-driven model that encourages packing students into classrooms like sardines to maximize profits is not conducive to the personal attention that students need in disciplines like the arts and humanities. Many of these departments, slated to be reduced or cut, have been deliberately hamstrung by their administrations (citing low enrollment numbers), resulting in their inability to offer a robust curriculum. The overemphasis on the number of majors these disciplines have is a deliberate strategy to discredit these disciplines. If these programs are retained, they are treated as second-class departments simply serving as the “general education requirements” for the more profitable “revenue-generating” programs.

Higher ed is on the verge of collapsing because it has lost its soul. Can this soul be restored? Perhaps. But this would require a nationwide movement to restore public trust and reclaim higher education, building an academy that is not solely transactional or profit-driven but is deeply invested in serving and collaborating with its broader communities and society writ large. If we cannot do this, then we are one step closer to witnessing the weakening of our civil society and the end of our democracy.