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LLM (google/gemini-3.8-flash) summary:
- Enrollment Declines: undergraduate numbers fell nationwide leading to budget reductions and deficits across major institutions
- Employer Skepticism: companies increasingly avoid ivy league candidates due to graduates lacking problem solving skills
- Admissions Criteria: holistic reviews and athletic preferences contribute to underqualified students entering the workforce
- Research Funding: institutions face scrutiny after charging high indirect overhead rates on federal grants
- Escalating Costs: tuition and expenses exceed one hundred thousand dollars annually at sixteen institutions
- Artificial Intelligence: machine systems outperform traditional instruction methods and pass licensing exams
- Experiential Learning: virtual apprenticeships and yearlong team projects offer hands on alternatives to standard lectures
- Declining Perception: the share of americans viewing higher education as very important fell to 31 percent
By
Andy KesslerOct. 4, 2026 2:52 pm ET
What’s the matter with universities? Syracuse missed its 2026 enrollment target and may run a $30 million deficit. Minnesota is cutting its budget by $225 million over two years. Tulsa is slashing tuition by more than half. Colleges enroll 4.2% fewer undergraduates than last year. Cornell, Yale, Vanderbilt and Washington University in St. Louis put out plans—not radical enough, if you ask me—to reimagine the university. Wossamotta U?
Colleges are known for left-leaning professors, speech suppression, bizarre courses—Occidental College taught “The Unbearable Whiteness of Barbie”—and easy grading more than critical thinking, judgment and problem solving. It’s easy to blame artificial intelligence, but problems run deeper:
• Aptitude. In Griggs v. Duke Power (1971), the Supreme Court effectively banned corporations from giving intelligence tests, so companies rely on colleges to do their sorting via aptitude tests like the SAT. That led to branding and credentialism, but that game is over. A Cornell report noted employers’ “jarring” skepticism of college graduates because they lack job skills such as “the ability to handle uncertainty and solve problems that do not have clear answers.” A Forbes survey found almost half of corporate executives are either less likely to hire Ivy League graduates than they were five years ago or would never hire them.
• Admissions. “Holistic reviews” that ignore aptitude and grades put a thumb on the scale and harm college brands. In combination with athletic scholarships and easy majors, they bring in underqualified students who are churned out as subpar employees.
• Accounting. In 1945, Vannevar Bush suggested the U.S. government fund “basic research in the colleges, universities and research institutes,” which became a big business. But universities got greedy and abused the system by overcharging the government for overhead.
That business model is now suspect. The Trump administration instituted a 15% cap on “indirect cost rates.” A 2025 study found that at more than 350 institutions funded by the National Institutes of Health, the average negotiated indirect cost rate was 58% and the effective actual overhead rate averaged 42%. The Trump administration’s 15% cap was struck down in most cases and the administration has backed off for now, but we’ve seen research funds cut off. Watch for “let’s hit up alumni for more” as research overhead may no longer be an overstuffed cow to pay for campus excesses.
That includes professor salaries. Many eyebrows lifted in 2024 when Claudine Gay was fired as Harvard president and went back to being a professor, at a $900,000 salary. The average full professor salary at Harvard in 2026 is $293,619, up 6.4% from last year. I’d bet many of them hate capitalism but are happy to enjoy its fruits.
• Affordability. Student loans lead to constant tuition hikes. Same for high professor salaries and administrative bloat. Sixteen colleges and universities cost more than $100,000 a year in tuition and expenses. Where’s the value? Students could buy a decent GPU rack and start their own AI company for less.
• Artificial Intelligence. Professors and students seem to be going through the motions of learning, so there’s a huge structural problem. Do ChatGPT-written essays get graded by Claude? Why bother?
Three years ago, OpenAI’s GPT-4 scored 1,410 on the SAT, maybe enough to get into Michigan. Since then, AI has passed bar exams and medical licensing exams, which says more about these outdated tests than the inadequacy of humans, perhaps a sign of an antiquated education system. Even worse is a 2025 Harvard study, “AI tutoring outperforms in-class active learning.” Are teachers and professors becoming obsolete?
Universities can take advantage of AI rather than ban it. The sage-on-a-stage format is over. Learning is experiential. As corporate America rejects college branding, graduates would benefit from more hands-on experience. Universities may be uniquely positioned to implement what I call “virtual apprenticeships,” real job experience while still at school.
I suggest all students spend their entire junior year on team projects. Assignments might include building nuclear autonomous buses or robots that cook. Cross-discipline self-organizing teams will form. You’ll need engineers and coders, but also prelaw and political-science majors to clear the regulatory path, philosophers and marketing majors to write press releases, designers, nutritionists, etc.
Self-paced AI-tutored instruction can help students learn what they need as problems arise. A smart entrepreneur might even create a student transfer portal to recruit talented students from other universities.
According to Gallup, in 2013, 70% of Americans said college was very important. Today it’s only 31%. If universities don’t change, more than a few will implode, while others will wither away over decades. AI and alternative forms of learning are already rising. Something radical is needed to stop the decay of our once great universities. Who will step up?
Write to <a href="mailto:kessler@wsj.com">kessler@wsj.com</a>.
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Appeared in the October 5, 2026, print edition as 'The End of College as We Know It'.
Andy Kessler is the author of Inside View, a column he writes for The Wall Street Journal on technology and markets and where they intersect with culture. He won the 2019 Gerald Loeb Award for commentary. He is the author of several books including Wall Street Meat and Eat People. He used to design chips at Bell Labs before working on Wall Street for PaineWebber and Morgan Stanley and then as a founder of the hedge fund Velocity Capital.
