Higher ed and health care: betting on growth

Time to read: 2 minutes

JANUARY 6, 2026—Higher education and health care organizations are choosing offense over defense as they face economic headwinds and new federal restrictions. When asked about their strategy in a September 2025 TIAA survey, 72% of nonprofit employers said they plan to tackle their financial challenges by boosting revenue. Only 12% will lead with cost-cutting.

Higher ed is facing revenue shortfalls driven by macroeconomic trends and societal pressures. The number of new high school graduates will have peaked in 2025, followed by a decline until 2041.¹ The general erosion of higher ed’s perceived value doesn’t help: Nearly half of Americans in 2024 questioned the value of a four-year degree, according to Pew Research.² Those who do attend college are demanding more modern amenities that many institutions struggle to keep up with. And recent federal legislation is restricting grants and student loans. “We lost $70 million in federal grants and research funding,” says one benefits leader for a large private university. “That resulted in furloughs and terminations.”

Health care organizations are facing chronic staffing shortages, shrinking profit margins, and their own demographic event—the aging of America. “In 1985, 40% of the population we served was under age 29; today it’s less than 10%,” says one health care leader. Medicaid changes in the 2025 One Big Beautiful Bill Act will leave millions without coverage, a problem for all health care organizations. A city-based health system leader says: “Our patient volume isn’t expected to change, but the payment mix will shift to charity care, and we’ll have a greater administrative burden to prove Medicaid eligibility.”

Higher ed and health care growth strategies

The list of how higher ed and health care organizations are planning to increase revenue is as long and varied as the challenges they’re facing. Higher ed’s growth playbook focuses on expanding existing programs (59%), launching new offerings (58%), and pursuing untapped markets (53%).³ For instance, a CFO for a private four-year college says they are “looking at leasing land, developing a campus arboretum as a public attraction, and creating a campus-based childcare center open to the community.”

Fifty-five percent of health care organizations say finding new customer bases is their first strategy, and 53% say program expansion topped their list.⁴ Some health care organizations are expanding to include pharmacies and clinics, which bring specialized care closer to patients. The nursing shortage remains an acute issue: 48% of employers say they are focused on new hiring techniques.⁵ “We’re going into local schools and talking to eighth- and ninth-grade students about health care careers,” says a rural health care benefits leader. “It's kind of like college football recruiting. And we do a formal signing day for nursing graduates when they choose where they’ll work. It’s been a big success.” Hiring permanent employees helps cut costs—travel nurses often earn twice as much as staff nurses.

Thinking broadly about organizational change, 47% of nonprofit leaders said artificial intelligence will help their organizations by reducing administrative costs and speeding up processes.⁶ Government funding will continue to be an economic concern for nonprofit employers: 50% of health care leaders and 46% of higher education leaders say it’s a top issue they’ll track throughout the next 12 months.⁷