The sweeping nature and uncertain ramifications of President Trump’s latest deal to universities is sowing confusion and consternation among higher-education leaders and experts for, among other things, its unpredictable impact on college finances. In attempting to codify Trump’s vision, the agreement could make it more difficult for institutions to keep afloat.
The Compact for Academic Excellence in Higher Education, released last week, offers nine elite universities a stark choice: adopt eight policies familiar from ongoing White House demands and rhetoric, such as eliminating race as a factor in admission decisions, or give up the opportunity for easier access to federal dollars. The threat of losing federal research grants under Trump has been a major source of anxiety and contingency planning for college leaders for months, especially given how much institutions have become dependent on federal funding.
The compact arrives at a bad time, when many institutions are already facing tight budgets, increased competition for students, and unpredictable financial futures, even among the wealthiest colleges. Provisions limiting international students and instituting tuition freezes for universities that agree to the compact could hobble them financially over the longer term.
If it takes effect, its impact would be uneven depending on whether a university is public or private and its location, experts say.
A limit on international enrollment could restrict colleges’ ability to plan, be nimble, and respond to inflation.
One plank of the compact specifies that a participating college can’t enroll more than 15 percent of its undergraduates from other countries. Limits on international students could be especially problematic for private institutions, said Robert Kelchen, a professor of educational leadership and policy studies at the University of Tennessee, since they typically enroll more students from overseas.
But, according to federal data, none of the nine universities enrolled 15 percent or more of undergraduates from other countries in 2022, the most recent year for which data is available. Only one of the universities, the University of Southern California, ranked among the top hosts of international students in the 2023-24 academic year (the data do not reveal which countries they come from, or how many of the total USC international students are undergraduates).
The same section, titled “Foreign Entanglements,” stipulates that colleges under the compact enroll no more than 5 percent of their undergraduates from any one country. The provision appears to be aimed at curbing the number of students from China and India, Kelchen said. Those countries are the largest exporters of students to the United States, at 29 percent and 25 percent, respectively, during the 2023-24 academic year, according to the U.S. State Department.
International students are prized by colleges for several reasons, including the fact that most pay full tuition. Agreeing to limits on admitting international students could “severely restrict the ability of institutions to remain nimble and respond to inflation and plan for needed growth,” wrote Liz Clark, the president of the National Association of College and University Business Officers, in an email to The Chronicle.
A tuition freeze could benefit wealthy students and limit low-income students’ access.
Another section of the compact calls on signatory institutions to freeze tuition for five years, and for universities with large endowments — equivalent to $2 million per undergraduate student — to provide free tuition to students studying “hard sciences.”
Tuition freezes and free tuition at wealthy universities might be a popular notion with students and families squeezed by rising college costs, but they could lead to less aid for students of more modest means, according to Brendan Cantwell, a professor of educational instruction at Michigan State University. Colleges could shore up their tuition revenue by cutting back on need-based aid, he wrote in a blog post about the compact. “The net result would be that high-income students that pay full-price pay relatively lower prices as tuition fails to keep up with inflation,” he wrote, “and fewer lower-income students enroll at all.”
Once again, this provision would likely affect institutions unequally. In the majority of states, public-college tuition is already under tight control by elected officials if not already frozen, “and with the way that skepticism toward higher education is moving, I expect to see more states across the political spectrum adopt tuition freezes,” Kelchen said. “This really hits the private institutions the hardest.”
Only two of the nine universities — the University of Pennsylvania and the Massachusetts Institute of Technology — would likely be subject to the free-tuition provision if they joined the compact based on their endowments.
To sign or not to sign?
The compact may face legal challenges before any university leader sits down to sign it. But could there be benefits to inking the line?
On one hand, Cantwell said, institutions are inviting unprecedented federal meddling in their affairs while doing little to nothing to boost affordability for students.
On the other, Kelchen said, the three public universities on the list (the University of Arizona, the University of Texas at Austin, and the University of Virginia) might as well go ahead and sign, ostensibly ensuring the flow of federal research and student-aid dollars. The compact represents the federal government exerting the kind of control over higher education that only state governments have exercised in recent years. College leaders in blue states might be loath to encourage that step despite the potential consequences. In Virginia, with its Republican governor, and in nominal red states like Arizona and Texas, there’s less to lose.
“It’s a no-brainer for red-state public universities, because they’re already facing basically all of these constraints on their operation,” Kelchen said. “It could be a substantial benefit to universities that sign on, and it could be a substantial penalty to ones that don’t.”
