Operating costs in higher education rose faster than prior expectations in 2025, with the Commonfund Higher Education Price Index (HEPI) reporting inflation at 3.6 percent for the year. Institutions face rising utilities, labor and compliance costs while enrollment declines compress tuition revenue, prompting credit‑rating pressure and program-level restructuring. Ratings agency Fitch cited elevated operating expenses and enrollment competition in its negative sector outlook, and auditors flagged “hidden costs” that could surprise campuses. Those pressures are already forcing institutions to change: The New School is undergoing a high‑profile overhaul as administrators pursue an operational reset to stabilize finances while critics warn the changes could impair the university’s liberal‑arts mission. Boards and presidents must reconcile cost containment with academic priorities, strengthen financial planning and scenario modeling, and weigh the risks of program cuts against long‑term academic and reputational consequences.