Chief financial officers (CFOs) in higher education are facing a complex landscape of financial challenges and opportunities. As institutions navigate economic uncertainties and policy changes, CFOs are increasingly focused on long-term strategies to ensure financial stability. The Inside Higher Ed/Hanover Research 2026 Survey of College and University Chief Business Officers provides valuable insights into the current financial outlook and the strategic shifts needed to sustain higher education institutions.
The survey, conducted with 213 CBOs from public and mostly private nonprofit institutions, reveals a mix of optimism and concern. While 62% of CFOs expect their institutions to be better off financially a year from now, confidence dips to 70% for the 10-year outlook. This dichotomy highlights the need for structural reforms that can withstand sustained disruption.
The Current Financial Landscape
The financial environment for higher education institutions has been volatile, with challenges ranging from the Great Recession to the pandemic and the volatile federal funding environment. Despite these hurdles, CFOs have played a crucial role in keeping their institutions afloat. However, the focus is now shifting towards structural changes that can help institutions weather future crises.
Endowments have grown at 83% of institutions, reflecting a generally good stock market. This growth has contributed to a sense of near-term financial optimism. However, strategist Rebeka Mazzone cautions that some of this optimism may be misplaced. She notes that a plurality of CBOs (31%) still rely primarily on annual budgeting without multiyear projections, which could leave institutions unprepared for future market shifts.
Key Financial Risks and Concerns
CFOs identify several key financial risks, including enrollment declines (46%), structural cost imbalances (42%), and infrastructure/deferred maintenance costs (34%). These risks are compounded by shifting public attitudes about college value and sweeping federal policy changes under the One Big Beautiful Bill Act.
The impact of the second Trump administration on institutional financial outlooks has been at least somewhat negative for 70% of CBOs. Specific concerns include Pell Grant eligibility tightening, new caps on Parent PLUS loans, and the elimination of Graduate PLUS loans. These changes disproportionately affect private nonprofit doctoral/master’s (77%) and public doctoral (68%) universities.
Strategic Shifts and Structural Changes
To address these challenges, CFOs are advocating for structural changes that can enhance financial viability. The survey indicates that academic program restructuring is the most important structural change needed in the next three years. However, only 13% of CBOs say their institution understands per-student program and activity costs very well.
KJ Fagan assistant vice president for strategic innovation at Pomona College, emphasizes the need for institutions to focus on their real strengths and invest in those areas. She notes that higher education has not had to reinvent itself the way other mature industries have, but this may be necessary to survive smaller markets and more competition.
CFOs are also recognizing the importance of honest and clear communication among institutional leaders. Leslie Brunelli executive vice president for finance and administration and chief financial officer at Washington State University, describes the magical thinking that often occurs at the governance level. She emphasizes the need for CFOs to be storytellers who can turn complex financial data into understandable narratives for institutional leaders.
As higher education institutions face existential financial worries, the real challenge is always people. Effective communication and strategic planning are essential to navigate the financial landscape and ensure long-term stability.
