Education leaders in 2026 are facing a growing list of challenges, some familiar, others emerging. Ranging from funding pressures and talent shortages to rising cyber concerns and NIL liabilities, these trends will require new approaches to risk management to help protect both revenue and reputations.
1. Demographic and attitude shifts impact revenue
On top of existing financial strains from budget cuts, there is a growing likelihood of decreased enrollment revenue due to fewer high school graduates, as well as fewer international students stemming from changing policies and visa uncertainty. At the same time, fewer than one in four Americans now believe that a degree is important to secure a good job.
Vocational and trade-based programs are a bright spot, with steady growth that is expected to reach $250 billion by 2030. Educational institutions should look to these programs as areas of strategic opportunity and risk planning.
In a positive financial note, property insurance rates are coming down, so institutions that had been underinsuring as a cost-cutting measure may find it a good time to reassess property values and coverage gaps, address deferred maintenance that could lead to liability exposures, and look for potential premium savings.
2. Staff under stress
Faculty and teachers are under pressure—78% say they have considered quitting because of stress and burnout over the last five years—and absenteeism and disability leave tied to mental health struggles are on the rise. What’s more, salaries have not kept pace with inflation.
Among the considerations for administrators:
- Well-being initiatives, strong benefits and financial planning resources directly correlate to improved productivity, retention and community reputation. Along with implementing these programs, ensure staff knows about them.
- Educators who feel supported in the workplace and aren’t stressed about retirement planning demonstrate higher performance.
- Self-funded health plans with robust claims management can help educators save money over time.
In addition, unfunded liabilities for retiree health are a financial burden on many educational institutions. Work with an insurance broker with expertise in the education sector to explore new ways to restructure or downsize these offerings.
3. Student mental health
Staff and educators aren’t the only groups in need of support: one in five college students say they have experienced “serious” mental distress. Managing student safety risks from incidents of violence also is a top priority.
Universities that proactively invest in student well-being can set themselves apart, as these issues can have an impact on student enrollment, retention and graduation rates. Maximize these resources by ensuring students are aware of, understand and can navigate these benefits.
4. Rising risk of cyberattacks and sexual abuse claims
Two of the biggest risks facing education institutions are the increasing prevalence of cybersecurity threats and sexual abuse claims.
Increased AI usage is one factor contributing to more cyber vulnerability, and ransomware attacks against educational institutions in the first half of 2025 were up 23% year-over-year. Increasing coverage limits for cyber insurance is an important step toward improving risk maturity.
Sexual abuse claims against schools and their staff are increasing, in large part because of laws temporarily reducing or removing the statute of limitations for victims to file claims. In California, for example, a 2020 law allowed victims to recover damages for decades-old claims.
At the same time, costs to defend and settle claims have been rising steadily, making access to coverage difficult. Institutions must ensure they are taking proper precautions to prevent these risks and reassess their risk profile, and board engagement is critical.
On both fronts, embedded enterprise risk management can help avoid losses while freeing leadership to focus on innovation, growth and student success.
5. NIL agreements create new risks
Colleges and universities need to be aware of the exposures and ever-changing regulations around NCAA name, image and likeness agreements that allow student-athletes to control how their images are used.
As colleges seek to regain some control by bringing student health services, counseling and athletic training programs back in-house, they may not fully recognize the complex legal and insurance implications, including greater malpractice exposure for physicians and trainers.
Adjusting policy structures specifically designed to safeguard against lawsuits tied to athletic injuries and NIL agreements is a critical step in reducing an institution’s liability and protecting long-term sustainability. Schools should seek expert advice and innovative risk solutions from an insurance advisor with expertise in this area.
Advancing risk management
As legal and financial challenges continue to grow, an ERM strategy can help educational institutions identify exposures and ensure they’re in the best position to respond to any situation that may arise. Work with your broker to approach risk strategically and identify coverage gaps.
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