AI & The Existential Crisis Facing Higher Education
I’ve been a professor working on the frontiers of AI for about a decade. I consider training and mentoring the next generation of engineers and scientists to be a great privilege, and I think conducting scientific research is one of the most noble of pursuits towards the advancement of humanity. However, I’ve grown increasingly worried about the future of higher education worldwide. AI is advancing rapidly, but that’s just one of many pressures reshaping academia. After listening to Marc Andreessen’s interview on Lex Fridman’s January 26, 2025 podcast—where he argues universities are broken and need to go bankrupt—I felt compelled to share my own concerns. Unlike Andreessen, I don’t want them to go bankrupt, but I think bankruptcy is inevitable in the coming decades due to declines in enrollment being far greater than many predict. While Andreessen and I both believe that AI progress should not be halted and that it will enable us to address many of the world’s greatest challenges, AI is one of the primary reasons I think there will be cataclysmic reductions in college enrollment over the next two decades.
Declining Enrollment and Student Debt
By 2041, college enrollment is projected to drop 13% due to declining birth rates, as noted in Forbes. At the same time, the cost of education is pushing more students away. Student loan debt has reached staggering levels, leaving many graduates financially burdened for years. More students are questioning whether a degree is worth it. Therefore, enrollment drops are likely to be significantly higher than predicted, even if we don’t account for a much greater threat to enrollment: AI.
The Disruptive Impact of AI
AI is already at the level of an above-average college graduate across a broad range of subjects. Many graduates don’t have perfect GPAs, yet employers may soon prefer AI tools over mediocre human workers. The old saying “C’s and D’s get degrees” may soon be obsolete if AI outperforms the median graduate. College would have little financial upside for these students in the future.
Meanwhile, AI-assisted homework is making grades even less meaningful. A Forbes report found that 89% of students admitted to using ChatGPT for assignments, raising concerns about widespread academic dishonesty and grade inflation.
Ironically, while students use AI to cut corners, today’s best large language models still only perform at a “B” or “B+” level in many subjects. However, AI is rapidly improving, and even these models have effectively “taken” every class in the world. Their breadth of knowledge far surpasses any human’s, meaning students who rely on AI instead of developing their own expertise may soon find themselves replaced by the very tools they use to cheat.
I increasingly believe that Artificial Super Intelligence will be created in the next decade, and I’m even teaching a class on the topic this semester. Once that occurs, the economic benefit of a college degree will be increasingly diminished.
Institutional Inertia in the Age of AI
Universities are notoriously slow to adapt, and AI is exposing these weaknesses. Bureaucracy and outdated policies make it difficult for institutions to keep up with technological shifts. Instead of embracing AI and rethinking how education should function in an AI-dominated world, many universities are treating AI as an existential threat, for the wrong reasons, rather than as a transformative tool. If universities fail to integrate AI effectively—both in research and teaching—they will lose relevance to institutions and industries that do.
My Predictions & The Path Forward
My prediction is that many universities will fail over the coming decade and that reductions in enrollment will be far more severe than predicted due to advancements in AI. White collar jobs that involve being told what to do on a day-to-day basis will gradually be reduced, if not eliminated, as this is what AI systems excel at. However, progress in AI must not be stymied, and I think it will have tremendous positive benefits for the world. If AGI is created, these agents will still require executive leadership from ambitious humans to direct them, and those people would still greatly benefit from a college education. Universities that attempt to avoid AI, will be the first to fail. Those that survive will:
- Embrace AI as a tool for education and research rather than resisting it. AI-first universities will be the ones that survive.
- Encourage action-oriented leadership to drive meaningful change. Leadership needs to be forward-thinking and strategic, especially regarding the impact of AI. Bureaucracy must be streamlined.
- Prepare for enormous declines in revenues due to reduced student enrollment by becoming more efficient, especially regarding administrative processes and staffing, which have ballooned over the past decade.
- Rebuild public trust by demonstrating the real value of higher education.
The public will not save universities from bankruptcy. Confidence in higher education has plummeted. Instead of seeing universities as hubs of education and research, many view them as ideological battlegrounds rife with controversy. This damages enrollment, fundraising, and public support. Recent Gallup polling shows that only 36% of Americans have significant confidence in the value of higher education, with 32% having little or no confidence in academia.
Higher education is at a crossroads. Enrollments are going to plummet, and AI’s impact will make this much more severe than many predict. The surviving universities will be those that planned ahead for AI’s impacts by embracing AI’s role in both education and research.