New analysis from S&P Global Ratings points to worsening institutional margins even as enrollment grows across parts of the sector. In fiscal 2025, public colleges posted median operating margins of 0.7%, down from 0.9% the prior year, while private nonprofit colleges’ median operating margin fell to -0.4% from -0.3%. S&P links the deterioration to intensifying competition for students, increased tuition discounting, and cost pressures, even as larger flagships maintained stronger demand. Analysts warned that regional publics with less financial flexibility face heightened credit pressures and that private nonprofits may need to brace for renewed enrollment declines. For higher education leaders and boards, the immediate takeaway is that headcount gains are not translating into sustained financial resilience—raising the likelihood of deeper cost restructuring discussions and financial scenario planning.