Navigating the New Risk Paradigm: How Higher Ed Leaders Can Turn Vulnerability into Value
By: John Fees
In the fast-evolving landscape of higher education, risk management is no longer just about legal compliance, cybersecurity, or financial stability. As highlighted in Deloitte’s recent insights on the Top Risks Facing Higher Education, university leaders are facing a convergence of pressures: shifting demographics, questioning of the "ROI" of a degree, and an unprecedented focus on student well-being.
For bursars, risk managers, and enrollment leaders, the challenge is not just identifying these risks, it is finding holistic solutions that protect both the institution's bottom line and the student's educational journey.
The Financial Sustainability Challenge
Deloitte’s analysis points to business model risks as a primary concern. The looming demographic cliff, a projected drop in high school graduates, combined with rising operating costs, creates a razor-thin margin for error in enrollment projections.
When a student stops out mid-semester, the impact is twofold:
Immediate Revenue Loss: If the withdrawal occurs after the refund period (often after the fourth or fifth week), the university may struggle to collect unpaid balances.
Retention Melt: A student who leaves with a financial burden is statistically less likely to return. A 2025 Gallup/Lumina Foundation Study found that nearly 1 in 3 currently enrolled students have considered stopping out, with nearly half mentioning emotional stress (49%). That short-term withdrawal often becomes a permanent loss of a student’s lifetime value to the institution.
To navigate these challenges, institutions must look for tools that stabilize revenue without creating adversarial relationships with the families they serve.
The Mental Health Crisis: A Duty of Care
Perhaps the most critical risk identified in recent years is the escalating crisis in student mental health. Deloitte classifies this as a top-tier risk, noting that institutions are grappling with a "duty of care" that extends far beyond the classroom. The rise in anxiety, depression, and other mental health conditions is not just a student affairs concern; it is an enterprise-wide risk that impacts retention, reputation, and campus safety.
The data is sobering:
38% of students reported experiencing depression. (Healthy Minds Network, 2024)
34% of students reported experiences of anxiety. (Healthy Minds Network, 2024)
About one in three enrolled adults find it difficult to remain enrolled, or have considered stopping out, largely due to mental health and cost concerns. (Gallup/Lumina Foundation, 2025)
When a student faces a mental health crisis, their primary focus should be on recovery, not on the financial implications of withdrawing from school. Unfortunately, standard refund policies are often rigid, providing nothing after the first few weeks of classes. This leaves families in a devastating position: managing a health crisis while facing the total loss of their tuition, housing, and fees.
A Recommendation for Compassionate Risk Mitigation
The Deloitte article offers recommendations for higher ed leaders to navigate declining student mental health, including expanding counselling services, deploying mental health literacy campaigns, and promoting wellness programs. These are essential clinical interventions, but they require a financial commitment.
This is where a tuition insurance program comes in. By integrating a solution like GradGuard, colleges can provide a safety net that bridges the gap between strict institutional refund policies and the realities of student life.
Specifically, GradGuard’s Tuition Insurance program is designed to address the complexities of mental health withdrawals. By providing up to 100% reimbursement for covered mental health-related withdrawals, families can be made whole, preserving the resources they need to afford a return to school when the student is well enough to do so. Institutions are also made whole, mitigating the collection issues or reputational risks that come with pursuing unpaid balances from families in distress. Plus, GradGuard’s program is available to institutions at no cost.
Transforming Risk into Resilience
This protection empowers university leaders to:
Protect Revenue: The institution retains the tuition and housing revenue it relies on for operations, smoothing out what would be financial losses caused by mid-semester withdrawals.
Preserve Retention: By ensuring families are made financially whole, the student is better positioned to return. Removing the financial loss associated with a withdrawal is a key factor in enabling a student to eventually return.
Demonstrate Empathy: It shifts the conversation from "policy enforcement" to "student support," proving that the institution cares about the student's long-term well-being.
Moving From Siloed to Systemic Solutions
As the Deloitte article suggests, the era of managing risks in silos is over. A financial risk is a reputational risk; a student health risk is an enrollment risk.
Higher education leaders who proactively adopt tools like tuition insurance are doing more than just transferring risk, they are building a resilient campus culture. They are ensuring that when the unexpected happens, the systems in place protect the institution's future by first protecting the student's present. In doing so, they turn a point of vulnerability, the potential for student withdrawal, into a value proposition of care and long-term success.
