Among the strengths of America’s higher education sector has been an uncanny ability to change and remake itself in the face of social, economic, political, artistic and intellectual changes—not just superficially and marginally, but significantly and even teleologically. 

While the aspirational aesthetics of our universities—a pastiche of the ancient British and European institutions by way of pre-revolutionary New England and the mid-Atlantic—remain largely unchanged over the past century, their activities, outputs, constituencies, and funding sources have changed dramatically. This adaptive ability redounds to the benefit of universities and to the so-called higher education “system” as a whole, ensuring resilience and a (sometimes begrudging) willingness to change in response to internal and external challenges.

The Great Bundling

American universities have long bundled many different functions together, sometimes logically and sometimes opportunistically. Much of universities’ adaptability throughout the 20th century has been due to their ability to take on new roles and add ever more programs and services (not to mention donors and stakeholders) under their aegis. The story of the modern American research university is substantially one of bigger and bigger bundles. 

But the period of bundling appears to be coming to an end, and an era of unbundling is beginning. While this has received far less attention than trends and events ranging from stagnating student enrollment to the Trump administration’s efforts to change campus policies concerning speech, curriculum, and research, unbundling is perhaps the most under-covered trend on campus today. The direct consequences of this change can be at least reasonably hypothesized, but it is far less clear what the second- and third-order effects will be—which means universities are closer to the onset of a period of tumult than to its conclusion.

While American research universities share some surface similarities with their older English, Scottish, and German counterparts, the 20th century American research university is not a timeless organization model, nor was it inevitable. Rather, it was the result of a series of choices that were particular to the United States in the late 19th and early 20th centuries. Starting with the Morrill Act in 1862, the country began building out a system of land grant colleges to produce useful knowledge and train engineers and applied scientists for the industrial era.

American universities have long bundled many different functions together, sometimes logically and sometimes opportunistically.

The American professoriate of the era was besotted with the German university model of early 19th century Prussian statesman Wilhelm von Humboldt, which included academic freedom, unity of research and teaching, and a focus that went beyond the traditional liberal arts. They grafted it onto these new institutions, giving birth to the modern American research university. New private universities not covered by the Morrill Act largely followed a similar trajectory. These new institutions combined research, teaching (in the sciences, humanities, and the emerging disciplines of the social sciences), and outreach to the public to create the model we know today. (Notably, these American universities charged lower tuition than their German counterparts.) 

Over time, the products of these universities came to include subsidized arts, sports entertainment (including a de facto farm system for some professional leagues), consultancies for farmers through agricultural extensions, technology transfer to industry, non-academic workforce and vocational training, and much more. For their enrolled students, they provided an array of services, including instruction and intellectual growth, credentialing, certification of mastery, social and professional network formation, opportunities for homogamous assortative mating, and often (to the benefit of the advancement offices) a lifelong sense of membership in and attachment to a semi-exclusive club. They were truly thick bundles, offering something for almost every sector of the economy and society.

Revising the Social Compact

Many of the rationales that might have existed for such bundling a generation ago, such as economies of scale, are today rapidly disappearing. Take scientific research, which since Vannevar Bush’s famous 1945 report “Science: The Endless Frontier” has been a core competency of American universities. While the private sector has traditionally been the site of most American scientific and technological research, R&D has been a major part of what universities do and an equally important part of their public narrative.

But after increasing steadily since the 1950s, universities’ share of total national investment in R&D has in the last roughly 15 years declined from a high of 14.3% to 10.9% today. Put simply, as a function of the larger national research and development project, universities are playing a diminishing role. This trend seems likely to continue.

In its first weeks, the second Trump administration took universities to task over what it saw as profligacy in indirect costs that were being used to subsidize non-research functions. More recently, the National Science Foundation launched a new initiative called Tech Labs to invest up to $1 billion in research labs outside of universities. Notably, this initiative doesn’t fund research in the traditional NSF project-based fashion, but instead provides organization-level funding for non-university institutions, such as focused research organizations and independent research labs. 

Meanwhile, the work of philanthropically funded institutions like the Arc Institute, Speculative Technologies, and Convergent Research, while still small in absolute terms, suggests that fundamentally different ways of funding and organizing the scientific research enterprise are not just possible but viable and fruitful. 

Intellectual and cultural creation, exchange, and instruction are even simpler to divorce from university structures. For instance, the one-time tight link between universities and policymaking exemplified by people like Woodrow Wilson, Frances Perkins, Rexford Tugwell, Daniel Patrick Moynihan, George Shultz, Jeane Kirkpatrick, and Ben Bernanke is much weaker than it used to be. Moreover, universities no longer play an outsized role in incubating original policy ideas and providing analysis, with think tanks and even independent policy entrepreneurs playing an increasingly outsized role.

Universities no longer play an outsized role in incubating original policy ideas and providing analysis, with think tanks and even independent policy entrepreneurs playing an increasingly outsized role.

Regardless of whether this is for the better, it shows that unbundling is revising the social compact between universities, taxpayers, and the public sector. This trend is no doubt exacerbated by the increasing hostility of many university departments to hiring faculty members who would develop ideas for, much less staff, a Republican administration.

Meanwhile, initiatives like the Catherine Project, The Clemente Course in the Humanities, and The Paideia Institute offer free or low-cost but serious classes and seminars in classics, great books, and humanities, revitalizing a culture of autodidacticism that was once more widespread before university classrooms became the primary place of instruction in these fields. 

Finally, we see the rise of alternatives that explicitly unbundle education from traditional certification, threatening the universities’ effective monopoly on post-secondary credentialing. Some of these efforts are driven by employers’ workforce needs, for instance defense contractors Palantir and Anduril; others are driven by educational accreditors and state-level policymakers.

Once-niche areas like competency-based education, which focuses on skills mastery, are becoming increasingly recognized by students and employers as viable alternatives to traditional instruction-and-assessment methods. From an economic point of view, this unbundling is a function of both lower-cost alternative credentials and the perception of decreasing value of a university degree—including, or perhaps especially, from elite institutions. 

Taken in toto, these new programs, projects, and institutions demonstrate that the bundling logic of the 20th century need no longer apply to universities. There may be no advantage to having scholarly research, technical development, education, and certification all done under the same roof. Indeed, there may be diseconomies of scale in continuing to do so. This also suggests that universities are becoming less attractive places to launch new research and pedagogical initiatives. Operating outside the constraints of a university may be on balance much more attractive than it was a generation or even a decade ago.

A Time of Profound Change

It is worth considering what all of this means for open inquiry and free expression. Unbundling seems likely to lead to greater institutional diversity, and therefore increased opportunity (and funding) to conduct research, teach, learn, and develop intellectual and cultural projects outside of traditional university structures. This in turn creates more chances for heterodox and post-disciplinary thinkers, teachers, and researchers to work without the sanction of gatekeepers, like hiring and tenure committees.

Put plainly, if universities shut them out, that is of less consequence than it once was to the overall state of knowledge and its transmission. Individuals and small groups working outside of universities have greater flexibility to focus: The 20th century American research university required faculty to be by turns researchers, teachers, communicators, grant writers, administrators, politicians, and mentors. Unbundling means more opportunity for specialization.

Note however that a net social increase in intellectual freedom does not mean that it will increase within legacy universities. To the contrary, as the costs of exit from bundled systems decrease, there is less incentive for intellectual nonconformists, especially those of a mildly entrepreneurial bent, to stay and work within existing institutions. Exits from traditional academe may induce additional exits at the margin, leaving the academy even less ideologically diverse and open to intellectual diversity, exacerbating an already vicious cycle toward conformity (and, potentially, mediocrity). 

Once-niche areas like competency-based education, which focuses on skills mastery, are becoming increasingly recognized by students and employers as viable alternatives to traditional instruction-and-assessment methods.

Unbundling also means that, as universities become less relevant to the content, manner, and veracity of ideas in general circulation, these ideas will certainly change. The revolution in the news media of the past 25 years offers an example of what I’m talking about. Media has seen an increase in the variance of quality of news sources. 

Consumers now have access to information and analysis that would have been reserved only for small, well-connected audiences at the turn of the century, while at the same time fabricated stories, low-quality analysis, and reportage about the trivial abounds. Those committed to open inquiry who seek out new ideas will have unparalleled opportunities as universities play less of a role in the circulation of ideas—but so too will those who wish to consume (or allow themselves to be fed) emotionally charged pablum and AI-generated slop.

Finally, unbundling means an opportunity to shake off existing conventions around intellectual inquiry to refocus on its functions not its forms. Academic journals, university presses, and peer review are all of value—but in serving in their role as gatekeepers, they may also serve to induce conformity. This conformity is not just in the substance of ideas, but in their form: The number of peer-reviewed academic journals has increased by a factor of four over the previous 50 years. Surely some of the entrepreneurial energy that went into launching new journals could have been profitably directed elsewhere. Unbundling makes possible a recommitment to meaningful inquiry in whatever format ideas are published, discussed, and debated.  

There will no doubt be significant variance in how unbundling affects American higher education. The phrase “system of higher education” is a misnomer. The word “system” implies some sort of planned rationalism or emergent order, while American higher education is anything but. The most elite universities, backed by endowments measured in the tens of billions of dollars, developed different bundles of services during the 20th century than did state flagships, which in turn differentiated their offerings from regional universities or agricultural schools. To take an obvious example, sports plays a dramatically different role in schools in the Southeastern Conference than in the Ivy League. 

Arizona State University has developed a significantly different model of bundled services than many of its competitors—preaching excellence without exclusivity, and offering generous support for early-career researchers who don’t fit comfortably into traditional disciplinary categories. In the process, it has changed the social compact between its leadership and those who pay its bills. Unbundling will create more opportunities for universities to cultivate different bundles of services to increase their differentiation, rather than merely maintain the same programs as they have in the past, or that they feel they must produce to keep up with competitor schools.

The first-order effects of the unbundling of America’s universities are necessarily speculative and won’t be understood for many years. The second- and third-order effects are impossible to hypothesize. Whatever the eventual consequences, this is a time of profound change for American universities, though in ways that typically garner less attention than hot-button debates around campus culture, curriculum, and leadership.