Preparing for the Uncertain Times Ahead

For our quarterly meeting of the AGB Council of Board Professionals, Alex Nock, principal of the Penn Hill Group, joined us to discuss the ever-dynamic federal landscape and its impact on higher education. Nock’s 25 years of experience shaping federal education, disability, labor, and health policy—including key legislation like the Higher Education Act—give him deep insight into current policymaking and its impacts. His expertise in legislative strategy and bipartisan negotiations makes him well-equipped to analyze how today’s federal policy changes are affecting institutions’ funding, compliance efforts, and long-term planning.

Nock noted that much of the early activity by the new administration was expected, especially the administration’s focus on broadly dismantling diversity, equity, and inclusion (DEI) efforts. In fact, in mid-January, my colleague Kai Swanson wrote that “board professionals should be prepared for curveballs.” We did not anticipate, however, the velocity and volume of fastballs that the new administration has thrown at the sector through the many executive orders and other actions targeting higher education. Each day brings headlines of federal funding cuts (and suspensions), student detentions (and arrests), and challenges to established laws and institutional values that impact our ability to fulfill our institutional missions.

News organizations, law firms, and our own institutions have established online tools to stay abreast of the flurry of executive orders and their impact. Board professionals and our campus colleagues, especially our general counsels, are busy analyzing the texts of the administration’s orders and statements, speaking with colleagues, planning for possible scenarios, and, at times, joining lawsuits to challenge the orders. For board professionals, questions on how to navigate the campus impact and keep our trustees informed move to the forefront.

Key areas of concern for our institutions include: (1) stress points related to DEI, and (2) the impacts on federal research funding. Regardless of their institutional type and size, these issues are top of mind for trustees, presidents, and other higher education leaders.

First, the “Dear Colleague” letter on February 14, 2025 from the Department of Education’s Office for Civil Rights informed colleges and universities to stop using race in all “aspects of student, academic, and campus life” or risk losing federal funding. The letter expands the Supreme Court’s ruling in Students for Fair Admissions, applying it broadly in ways that could significantly impact campuses. The guidance runs counter to higher education’s main functions: creating campus communities that reflect the diversity of life experiences and perspectives while supporting academic freedom and freedom of expression that generates new knowledge and disseminates world-class educations to prepare students for the future workforce.

Second, the National Institutes of Health proposed an across-the-board reduction of indirect-cost-recovery rates to 15 percent. While a federal judge in Massachusetts temporarily blocked the move, such a cut would drastically reduce the ability of our colleges and universities to support the research enterprise. Nock observed that while the reduction to 15 percent might not hold, institutions would be well advised to plan for steep reductions in federal research support.

Additionally, in recent days we have seen the new admininistration deliver on its threat to remove federal funding with the cancellation of hundreds of millions of dollars in grants. Although these cuts may be negotiated or challenged in court, institutions should proactively prepare and proceed with caution.

To do so, many institutions are undertaking risk assessments to evaluate current grants, programs, and activities to understand where challenges might lie and assess the potential scale of possible cuts or other administration actions. Many leading research institutions have initiated hiring freezes and reduced expenses to prepare for this uncertain future. A robust institutional risk assessment can help frame the conversations for presidents to share with their boards. Trustees should be informed of the risks and understand the steps undertaken to mitigate them.

Board professionals recognize that these challenges arise amid declining public trust in higher education. Institutions must change the growing narrative that higher education is not worth the cost by more effectively communicating the sector’s successes. This can be hard to accomplish in the face of declining federal funding and targeted attacks on our universities. However, engaging external constituents can be an important tool in elevating this effort. AGB has made this a central focus in the last few years through its Guardians Initiative. Yet more work is needed.

Board professionals have an opportunity to serve as strategic advisors and engage presidents and trustees as key advocates in outlining educational success stories to challenge the current narrative and educate the public regarding higher education’s value. Trustees can champion institutional achievements by sharing success stories with local, state, and federal legislators. They can highlight the positive impact of higher education through showcasing the many student, faculty, staff, and alumni accomplishments. By equipping trustees with compelling success stories and key messaging, institutions can strengthen public perception, influence policy decisions, and, hopefully, restart and build sustained support for higher education.

We are grateful to Alex Nock and Ross Mugler, acting AGB president and CEO, for joining us, and for the many trustees, presidents, board professionals, and committed faculty and staff who champion higher education every day. While the day-to-day challenges can be hard to navigate, it is important that we remain focused on our mission, vision, and goal of successfully educating our students for the future.

Jonathan Post is vice president for board relations and secretary of the university at the George Washington University.