Transcript

Host: Hello, and welcome to Prevention and Protection, the United Educators risk management podcast. Today’s episode will feature a discussion among UE’s Risk Management Consulting team, including Justin Kollinger, Hoda Hussein, and Beth Kidwell, about emerging risks we’re forecasting for the 2025 year. Before we begin, a quick reminder that you can find other episodes of Prevention and Protection, as well as additional risk management resources, on our website, www.ue.org. This and all other episodes of Prevention and Protection are also available on Apple Music and Spotify. Now here’s Justin.

Justin Kollinger: Hoda, Beth, I’m excited for today’s conversation. We’ve worked together helping UE members manage their risks for years, but this is the first time all three of us have sat down to share our perspectives on what we see in the year ahead.

Let’s jump right into it. It feels like the risk landscape never gets less perilous, and I don’t think last year was any exception.

Just off the top of my head, we had:

• The election season
• The implementation of new Title IX regulations
• Continued evolution in college athletics
• Climate disasters
• Financial stresses
• And more

And I can’t imagine that 2025 is going to slow down. Hoda and Beth, what are the top one or two risks you’re watching for the year ahead, and why might they be different this year?

Hoda Hussein: I’d say climate risks. We’re seeing extreme weather events like the awful and devastating wildfires in California, hurricanes, floods. And they’re happening more frequently and can cause severe damage to campus facilities.

While the focus tends to be on the costly repairs due to property damage, there are significant liability risks to consider as well. For example, operational disruptions like canceling classes, events, activities, and research projects. And there are health and safety risks like poor air quality due to wildfires and flooding, all of which impact any campus’s ability to fulfill its educational mission.

The other one I’ll mention on my radar is cyber risks. Colleges and universities are prime targets for cyberattacks due to the vast amount of sensitive data they hold, including personal information of students, faculty, and staff. For instance, between 2020 and 2021, cyberattacks targeting the education sector increased by 75%, with many involving data breaches. And the following year, 30% of data breaches in the education sector were ransomware attacks.

Beth Kidwell: One of the top risks on my mind is enrollment. We’ve been talking about the coming enrollment cliff for several years now, and we’ve arrived at the peak. The number of high school graduates will crest in 2025 and then start to decline. So by 2041, the number of high school graduates will have decreased by 13%. Now, the South may see a net increase between now and 2041. However, they’re the only region forecast to experience that increase. The majority of states will actually see a decline in the number of high school graduates.

We also have to talk about the effect of changing student demographics on enrollment. While white and Black high school graduates will decrease by 2041, the number of Hispanic, Asian, and multiracial high school graduates are expected to increase.

So are institutions prepared for that coming change in their student demographics? Do institutions need to consider the need for more affordability options and how it could actually benefit these students if admissions and financial aid processes and services were less cumbersome to navigate?

And finally, do institutions need to reconsider how they market themselves? The largest decline in enrollment this fall occurred in middle market colleges. So there’s a lot to think about when we look at the risks and opportunities surrounding enrollment in higher education. And Justin, I think you’ve done some research on how enrollment is affecting our K-12 sector.

Kollinger: Yeah. The enrollment pressure is similar for independent K-12 schools too. While the number of children in the U.S. is projected to increase slightly, 1 or 2% over the next few years, if the growth in homeschooling and microschooling that we’ve seen continues, that’ll more than cancel out that small population growth. And Beth, like you said, the picture is very regional. For instance, independent schools in southern cities and suburbs see favorable demographic trends, but many northern cities, even some northern suburbs, are going to see dramatic child population decreases.

Kidwell: Enrollment is certainly a significant risk to watch for all levels of education. And I’d like to add another top risk I’m watching, and that’s employee wellbeing. Institutions have prioritized the health and wellbeing of their students, as they should be, by increasing mental health and counseling services and wellbeing resources across their campuses.

But we hear from many institutions [that] don’t have similar programs, resources, or services available for their faculty and staff. And we know educational institutions continue to be places of turmoil and challenges for their employees, many of whom simply don’t feel secure in their job.

Financial instability continues to bring about discontinuation of academic programs, closures of offices, and reductions in staff, or, more often, simply not filling those vacated positions. And worse, we continue to see closures of those institutions [that] simply can’t overcome their budget shortfalls or those other significant challenges. Employees are still being asked to take on additional work without financial compensation or even support from their leaders.

The political climate and changes in governmental agencies and policies often leave employees without clear direction or protection. And with the rapid advancement of AI, the automation of those routine tasks and processes leaves employees wondering how soon they could be replaced with technology.

We know leadership is pulled in many directions as it navigates through the multitude of risks and challenges that our educational institutions face, but their faculty and staff will be more effective in their jobs and will work better with leadership to successfully navigate those risks and challenges if more is done to provide support and stability to those employees. So I’m really watching for innovative ways of how institutions will more effectively support and promote employee wellbeing.

Kollinger: I don’t think any discussion about emerging risk in 2025 is complete without mentioning the political climate and regulation at the federal and state level. We almost certainly won’t see a single mortal strike at education, like pulling financial aid programs. And in fact, state-level funding suggests that many policymakers value education’s outcomes, but they are distrusting educational organizations. And so we’ll see this continued trend of small jabs, each making life a little bit harder for our college or school. And to look at last year, we saw little jabs that included congressional hearings targeted at certain leaders, OCR investigations related to Title VI, new Title IX regulations, the Stop Campus Hazing Act, state-level shifts in curriculum, and more. I could go on here.

The question becomes, “Where will we see those attacks in 2025?” It’s hard to state all of the possibilities. I would say assume anything in 2024 will continue. As for new areas to watch, I feel pretty confident that policies and politics related to immigration, gender, and curriculum will affect education in 2025.

On immigration, I think it’s instructive to look at our neighbors in Canada and to our colleagues in the UK. Both countries have faced major changes to immigration policy in the last couple of years. So I’d say consider what would happen if the US suddenly restricted student visas, H-1B visas. How would that impact enrollment and employment, or even your international engagement strategies?

And of course, some states have already targeted gender and curriculum. I think we’ll start to see similar challenges at the federal level, and I’d urge listeners to be prepared. Of course, consider how your institution would respond to policy changes affecting gender or curriculum, but also prepare how your institution will explain its decisions to students, employees, families, and other local stakeholders.

Kidwell: Justin, I’m glad you mentioned the political climate and those new or updated regulations, because I wonder if there are some risks there worth watching this year that might evade the headlines. For example, we finally have specific technical standards on web content accessibility. 

For too long, institutions have made educated guesses about how to prioritize and manage accessibility across their digital platforms and content. Unfortunately, most institutions will have to meet these new standards in less than 18 months. If they’ve been diligent in making web accessibility a priority on their campus, they’ll hopefully be in pretty good shape to meet the deadline. But for those institutions [that] haven’t been as proactive, they actually have a pretty big mountain to climb to meet those standards by the April 2026 deadline. And of course, the required testing, infrastructure, and training isn’t going to come cheap. It’s estimated the higher ed sector will spend over $7 billion on just testing and remediation.

So are there other risks that might not be headline news but are just as important to manage or mitigate?

Kollinger: I was also going to cite an area where the government stepped in too. Personally, I’ve been focused on hazing as an under-managed student affairs risk for the last few years. In my experience, risk managers aren’t involved until after a student dies, which is just ... It’s obviously too late.

I mentioned the Stop Campus Hazing Act earlier when I discussed political risks. Yes, it adds compliance and transparency components to hazing prevention, but it’s also trying to raise the bar for hazing prevention. I think there’s an increased expectation around prevention and hazing. And with increased expectations comes increased risk, even beyond mere compliance. I should note that even though the act applies to colleges and universities, one of the best predictors of a student’s experience with hazing in college is, of course, their experience with hazing in high school. At least in the public’s eye, I don’t think that they’re going to see a big difference between a major hazing incident at a university vs. one at a high school. Increased interest in higher ed hazing means schools need to keep up too.

Hussein: I want to surface something Beth mentioned earlier: AI risks. It’s now been more than two years since the release of ChatGPT, and I’ve heard differing thoughts about AI as a risk from UE members.

So let me ask you, Justin, is AI a risk?

Kollinger: I’m glad you asked. We asked about AI as an emerging risk in our annual Top Risks Survey, and we just published the report. We’ll leave a link in the episode description. For all of the other emerging risks, most survey respondents agreed that they were either significant emerging risks or insignificant emerging risks.

AI was a little different, though. Members had split between rating it high and rating it low. And to me that reinforces what you’ve heard, Hoda. Some think it’s a major risk, others say it isn’t a risk at all. Just for the sake of argument, I’ll say it’s not a risk. AI is then a tool. And like any tool, its misuse could carry operational risk.

However, AI is just another technological change in a long line of changes to how we educate. And while we talk about technology in the classroom a lot, teachers and faculty actually have a pretty good track record when adapting to change. Yes, it might happen slower than some might like, but we do get there.

It’s possible that future AI developments could create competitors to traditional forms of education or could change the channels that we use to deliver education, but I’m not seeing those major changes in the short term.

Hussein: AI can be great if used with caution. We’ve all embraced AI in a variety of ways, which has made our lives easier, from idea generation, conducting research, to drafting and reviewing everything from emails to risk statements, policies, and contracts.

I agree that risk surrounding AI from an operational standpoint has received far less attention than its use in the academic setting. Some examples I’m referring to for operational risks include data privacy, campus security, intellectual property, the potential for introducing bias or discrimination in AI-generated content, and inaccurate or outdated information. It’s a great tool when it’s used carefully and thoughtfully.

Kollinger: So what should institutions do if they perceive AI as a risk?

Hussein: Well, this answer alone could take up a whole podcast, but as a starting point, campuses should assemble the right people to get input from. So that’s their Information Technology folks, Legal, Risk Management, Human Resources departments. And they need to decide whether they’ll create a formal generative [gen] AI policy that’s mandatory and contains consequences for violations, or guidelines, which are generally voluntary and established to create consistency across campus. The goal here is to help employees understand when and how to use AI on the job.

From there, they should determine acceptable and unacceptable uses of AI, being very clear on programs or products that are prohibited and how to seek approval for new tools. Reiterate the AI tools that are preapproved, and that employees shouldn’t agree to terms and conditions without properly understanding their impact on their institution. Campuses should prohibit employees from feeding confidential information into AI and explain why, because many of these products are open or public, and that puts our confidential data at risk.

What risks? Well, I mentioned some earlier. Data privacy, cyber concerns, intellectual property. Perhaps introducing examples or case scenarios to employees to ensure they understand these risks and why these guardrails we’ve put in place are important.

Require human oversight. This is important to help avoid spreading incorrect or outdated information. Users should spot-check sources and facts from AI tools for accuracy. Depending on the type of tool used and the work product, campuses should consider whether employees may be required to disclose their use of gen AI and its creation.

And lastly, once a campus decides on its approach, informing employees is key. So dissemination and ongoing training is crucial.

Kidwell: That’s such great advice, Hoda. There is certainly a lot to think about with AI, especially as quickly as the technology changes. It feels like we learn something new and exciting about it every day, which obviously makes it challenging to manage and mitigate those risks that may be associated with AI.

I’m going to change direction here a little, Justin, and I’m going to put you on the spot. I’ve often heard you say that tomorrow’s risks come from seeds planted in the past. So you’ve done a forecasting risk podcast episode for the last few years, and now I want to look back at those. What do you think you got right, and what do you think you missed?

Kollinger: Well, keeping me accountable for past forecasting. It’s a good thing that I just re-listened to those episodes ahead of this. Overall, I think we mostly got it right.

In 2023, we predicted that employment risks like employee mental health, employment discrimination, and a backlash to DEI efforts would be a risk for the year. And all of those, we’ve seen them become more severe in the last two years.

In 2024, we cited employee mental health again, and then we added athletics management and campus demonstrations to the list.

Where we were wrong, I’m pretty glad that we were wrong. In 2023, I thought we would see an increase in xenophobia targeted at international students. And in 2024, I thought we’d see reductions in force. And now of course, to be clear, both of those things did occur, but they were less frequent and perhaps less impactful than anticipated, at least education sector-wide.

Hussein: We should also mention how our members did last year with forecasting too. We ask them annually to rank what they perceive to be top risks. And for the most part, the risks they share with us tend to be the same, year after year. But last year, our K-12s reported one risk that jumped up five spots from the year prior, which we hadn’t seen before, and that was for facilities and deferred maintenance. And just a quick definition here, that’s concerning outdated facilities and new construction, including inadequate buildings and infrastructure to achieve the institution’s mission. Deferred maintenance is an ongoing concern, and it has been for our membership for quite some time. But again, as we consider climate risks and the extreme weather events, I think that’s put some pressure on our members to shift their priorities here.

So we’ve packed a lot in the time we’ve spent today, and I think the next question we all have is, “What’s next? Where should members start with addressing all of what we’re forecasting for this year?”

Kidwell: That’s a great question, Hoda, and I wish there was an easy or one-size-fits-all answer, since institutions have so many risks to manage. First, I think I’ll suggest continuing to emphasize at your institutions that risk management is not the responsibility of the Risk Manager or the Risk Management department alone. The risks that we’ve discussed today may have a far-reaching effect on your campus, so it’s really important to continue bringing those key campus partners into your risk management conversations and the work that’s already happening across your institution.

Align your risk management efforts with your institution’s strategic goals, so everyone from leadership down understands the importance and the necessity of collaborating and managing and mitigating all of these risks. As many of these risks we discussed today could have significant impact, your institution may also need to reconsider your operational model so you can achieve those educational missions and goals.

I’ll also suggest members of UE check out our new RM Fundamentals page on our website. We’ll link to it in our episode notes. As we forecast future risks to watch and manage, it’s also really important to ensure we have the basics down, so UE has resources for those risk topics we believe are fundamental or great starting points for risk management work at your institution. Topics include contracts and waivers, policy drafting and pitfalls, documentation practices, training on risks, and more.

Maybe an institution has a really good handle on most of these fundamentals, but for those institutions unsure where to even start, I’d suggest starting with identifying risks or analyzing the risks that have already been identified to help you prioritize your resources and your efforts. Managing or mitigating risks, especially higher impact risks, takes time. However, working through the fundamentals will provide a solid foundation of risk management practices and strategies that will help prioritize risks and allow an institution to tackle those more impactful risks successfully.

Kollinger: Hoda, Beth, I know I can speak for both of you when I say that we’re excited for the year ahead, and we’re happy to support our members as they address these and other risks on campus. Thank you all for joining us.

Kidwell: Thanks, Justin. Enjoyed the conversation.

Hussein: Thank you, both. It’s been great, and I hope our members find this session helpful.

Host: From United Educators Insurance, this is the Prevention and Protection podcast. For additional episodes and other risk management resources, please visit our website at www.ue.org.