2025 was a year of recalibration rather than recovery for higher education.
After a few years of disruption, higher education institutions are no longer waiting for a return to business as usual; they are reshaping their programmes, recruitment strategies and partnerships to fit a more unpredictable, value-conscious and tech-enabled student market.
The main challenges, developments and trends for higher education in 2025
Internationally, demand for higher education continues to rise, but it’s more uneven and competitive than a decade ago. Because of this, higher education institutions have had to work harder to demonstrate a clear return on investment.
The sector is also being reshaped by rapid advances in AI, a rise in skills-based hiring, and a growing offer of alternative pathways such as bootcamps and online certificates. Students are increasingly looking for flexible, affordable routes into stable careers, rather than being guided by University brand name and prestige.
You can take a deeper dive into the impact of AI on student recruitment with our ‘Charting the future of higher education report’.
Financial pressure and cost sensitivity in domestic and international markets
Many institutions continue to face budget constraints, driven by flat or falling domestic enrolments, rising operating costs and growing expectations for student support and digital infrastructure.
Throughout 2025, application flows for many major study destinations, including the UK, have been affected by changes to visa regimes, work rights and dependants’ policies.
In the UK, adjustments to post-study work rules have prompted some students to consider alternative destinations in Europe, Asia and the Middle East, as emerging destinations with more welcoming migration narratives and competitive fees become more attractive.
Keystone’s Vice President of Research & Insight, Dr Mark Bennett, reflects on how the choice of study location has influenced international recruitment in 2025:
‘What stands out when we look at data for international student interest during 2025 is the scale of the shift. It’s not just the USA that’s seeing audiences reconsider their plans (with search interest down 47% over two years); in fact, Australia and Canada have seen interest fall further amongst those audiences who are still searching and exploring their options – something born out in visa and study application trends, particularly for Canada. For the UK, the picture is complex: on the one hand we’ve seen growth in search interest that’s also reflected in a smaller recovery in applications, but policy headwinds including a cut to post-study work make 2026 hard to predict at this point.’
Students prioritising cost-benefit over brand prestige
Flexible and career-focused provisions have seen a lot of growth, as students and their families are scrutinising cost–benefit more than ever.
The future career and earning potential of an education pathway has become an important part of a student’s decision-making process. Because of this, institutions that can show clear employment data, strong careers support and employer connections are converting more offers into enrolments.
This student focus on ROI has also led to less traditional educational pathways, such as short courses, online and hybrid programmes and professional master’s being considered over more traditional campus-based or non-vocational programmes.
This change in students’ decision-making also comes from a shift in the job market itself, as employers are increasingly focusing on skills rather than just academic credentials.
Student expectations around wellbeing and support
Robust mental health support, inclusive learning environments and career services are an expectation, not a perk. Institutions that underinvest in these areas are seeing lower satisfaction and retention.
Digital-first, data-forward and AI-driven recruitment
2025 has firmly established digital-first recruitment as the norm. Virtual events, self-serve content, on-demand campus experiences and AI-powered chatbots are now standard. Recruitment teams are increasingly using AI to support enquiry handling, lead scoring and personalised follow-up, freeing staff to focus on high-value conversations and complex cases.
Institutions are also optimising how they leverage their data. Recruitment and marketing teams are using data more systematically for segmentation, personalisation and conversion tracking across the full funnel.
The growth of transnational education
Joint degrees, offshore campuses and online partnerships have continued to see a boom, giving universities new ways to reach students who cannot or do not want to travel to a physical campus.
How higher ed institutions can stay competitive in 2026
Looking towards next year, it’s likely that these trends will only intensify, rather than reverse, so here are a few ways that higher education institutions can thrive in 2026.
1. Focus on employability for students
Ensure programmes include hands-on, experiential learning and teach industry-aligned skills, and report outcomes transparently as proof points to future students.
2. Embrace flexible pathways
Offer more adaptable qualifications, including multiple entry points and blended models that meet the needs of diverse learners across borders and life stages.
3. Use technology strategically
Integrate AI and digital tools to genuinely improve student experience, responsiveness and personalisation, rather than as a replacement for human connection.
4. Strengthen global partnerships
Deepen relationships with schools, colleges, employers and international universities to create resilient, multi-directional recruitment pipelines.
5. Lead with inclusion and wellbeing
Recognise that safety, belonging and holistic support are central to recruitment, retention and long-term brand reputation.
2025 has made one thing clear: student recruitment as we know it, is over. Universities that actively adapt their offer around student outcomes, are flexible, and work in partnership, will be best placed to succeed in 2026 and beyond.
Learn more about UniQuest’s work with universities to stay ahead today.
