For the past year—particularly in the last several months—the education sector has experienced developments that are not isolated events, but rather part of broader, ongoing shifts. Federal oversight, international enrollment, the role of artificial intelligence, and persistent financial and workforce challenges are evolving in ways that merit close and continuous attention. Events from the summer and early fall indicate that these developments are actively shaping current debates and may also influence public and independent schools and higher education colleges and universities for years to come.
The NAIS research team consistently tracks external trends that may impact and shape the education sector overall––and independent schools in particular. This roundup of news and events from the past quarter provides insights to help school leaders keep an eye on the horizon and understand the changing conditions that may impact their schools.
Federal Funding and Policy: Escalating Pressures
Federal involvement in higher education has recently intensified, with the Trump administration expanding its oversight from private institutions to public systems. The University of California’s agreement to negotiate with federal officials—after the administration froze more than $500 million in research funds—could set a precedent for how public systems nationwide manage their federal relationships.
Meanwhile, Columbia and Brown universities reached settlements that require them to share applicants’ test scores, GPAs, and racial data with the administration, a move that may establish a precedent in how colleges and universities make concessions in relation to federal pressure. These developments align with new federal directives designed to centralize oversight of admission decisions and research grant awards, further blurring the boundaries between government policy and institutional autonomy. Some analysts warn that the administration’s approach may create confusion rather than clarity in admission practices.
In addition to institutional funding freezes and settlements, significant structural changes are underway. The Department of Education recently released $6 billion in previously withheld K–12 grant funds, but it did so while implementing an executive order to reduce the size of the Department of Education. This lack of funding has delayed student aid processing and has raised concerns about the department’s capacity to manage financial aid funding. The cancellation of a longstanding longitudinal study of high school students also poses challenges for collecting long-term outcome data.
Despite these hurdles, some initiatives are moving forward. The Department of Education has released new guidance on equitable services within K–12 school choice programs and has offered reassurances that the FAFSA will launch on schedule.
When viewed collectively, these developments demonstrate a consistent push for greater federal control in both the higher education and K–12 space. From restricting funding access to becoming more involved in states’ school choice initiatives, all education institutions will be wise to expect more federal oversight as they plan for the coming year.
International Enrollment: Mixed Signals
Declining international enrollment continues to be an issue, now with ongoing volatility. According to an August 2025 AP article, more than 100 U.S. colleges now rely on international students for at least one-fifth of their total enrollment, and some institutions may see up to a 40% decline in international enrollment. Other research cited in an August 2025 NPR article suggests that public university enrollment in Arizona, Texas, Missouri, Illinois, and New York is declining. In contrast, according to The New York Times, private institutions like Columbia and Princeton report steadier international student enrollment, underscoring that these shifts are uneven across school types.
The importance of international students for institutional budgets and campus diversity remains clear, and student demand remains robust. A July 2025 Pioneer Academics survey suggests that 91% of prospective international students still intend to study in the U.S., with 99% expressing confidence in the academic quality of American institutions. However, this demand is complicated by mixed federal messaging. For example, the administration announced that 600,000 Chinese students would be permitted to study in the U.S. in the 2025–2026 admission cycle, but new proposals quickly followed to restrict visa access and shorten stays for Chinese nationals.
At the same time, domestic enrollment trends are shifting, with more students opting for vocational programs, online pathways, and direct-to-workforce transitions. Uncertainty around both international and domestic enrollment is not a temporary issue but an ongoing risk that schools will need to closely monitor in the coming admission cycles.
Artificial Intelligence: Expanding Influence Over Time
Perhaps unsurprisingly, AI has remained a central topic in this quarter’s developments, highlighting how rapidly the technology is reshaping both education and work. Research from Stanford’s Digital Economy Lab shows a 13% relative decline in employment among 22- to 25-year-olds in occupations exposed to AI since generative AI’s adoption. These trends are becoming more pronounced, particularly in roles where AI automates rather than complements human tasks, raising questions about workforce preparation.
Concerns about AI’s impact on minors also persist. A Harvard investigation documented harmful inaccuracies when chatbots were asked about eating disorders, while educators and families have noted teens turning to these tools for mental health support. In a 2025 Common Sense Media report about how and why teens are using AI companions, nearly one-third of teens reported being as satisfied speaking with a chatbot as with a human. Additionally, MIT research found that frequent use of generative AI may gradually reduce critical thinking skills.
Policymakers have responded, with more than half of U.S. states issuing AI guidance for K–12 public schools. These guidelines, focused on ethics, classroom use, and data privacy, represent an important first step. But schools and policymakers will need to continually adapt as AI’s influence expands.
Financial and Workforce Pressures: Continuing Strains
An expanded federal endowment tax is reshaping the fiscal landscape for wealthier institutions, and the projected declines in international enrollment are adding to the financial strain. Layered on top of shifting domestic enrollment choices, these changes indicate that the financial model of higher education is facing structural challenges rather than short-term setbacks.
The K–12 workforce is dealing with equally steady challenges. Teacher pay remains stagnant, with one in six teachers working second jobs, according to the Pew Research Center, and many are unable to afford housing near their schools. There have recently been some positive developments, however—cities piloting effectiveness-based pay saw encouraging outcomes, and Congress once again debated establishing a $60,000 minimum salary for public teachers. These solutions come amid continued research showing that teacher wages have fallen behind those of other college graduates in the last 30 years. At the same time, research from Arizona State University on team-teaching models suggests these approaches can meaningfully reduce turnover. While improvements may be incremental, these developments reflect sustained efforts to address burnout and attrition even as compensation reform remains unresolved.
These financial and workforce pressures are unlikely to abate quickly. Instead, they will continue to shape institutional strategies, teacher retention, and debates about sustainable compensation.
Why These Trends Demand Ongoing Attention
In reviewing the past three months, what stands out is not only the breadth of issues but their persistent nature. Federal intervention has moved beyond a temporary political maneuver, signaling an ongoing redefinition of the relationship between institutions and Washington. International enrollment remains unstable and will have significant fiscal implications for institutions. AI is no longer a distant issue but is actively shaping youth development and the broader labor market. Financial and workforce challenges are persistent, requiring creative solutions to drive progress.
The cumulative effect of these overlapping pressures contributes to an educational ecosystem in flux. For public and independent schools, colleges and universities, and policymakers, the challenge is less about responding to isolated developments and more about preparing for a landscape where volatility just might be the norm for the foreseeable future.