The Higher Ed Innovation Index 2025, conducted by Transact + CBORD, finds 49% of campuses are accelerating tech investments, even as 44% cite implementation as their biggest challenge. While 99% of schools report using technology to cut costs and the majority reporting benefits from AI initiatives, many say payment modernization is a work in progress.
The findings paint a nuanced picture of higher ed’s digital transformation. Implementation tops the list of challenges, cited by 44% of leaders, followed by infrastructure and facilities improvements (40%) and keeping up with digital transformation (34%). Despite a near-universal commitment to leveraging technology to manage budget pressures, many institutions continue to struggle to translate technology investments into measurable gains.
“Higher education leaders are making bold moves toward digital transformation, but the journey is far from simple,” said Laura Newell-McLaughlin, chief commercial officer at Transact + CBORD. “The data reveals that while colleges and universities recognize the critical need for modernization, many are being held back by operational silos that prevent end-to-end efficiency.”
AI adoption gains traction on campus
Artificial intelligence is delivering measurable returns on campus:
- 66% of schools report that AI has helped reduce staff burnout
- 63% of leaders say AI is delivering cost savings today
- 84% agree they can access the data needed for critical decisions
- 74% say they have the analytics to intervene when students are at financial risk
Student payment trends shift, creating new challenges
The research uncovers a shift in student payment preferences that’s reshaping campus financial operations:
- 96% of schools report increased student preference for ACH payments, 70% for direct bank transfers, alongside growth in digital wallets (62%).
Digital wallets and pay-by-bank overtake checks for tuition payments
Students are piecing together tuition with 67% of schools reporting a rise in mixed payment methods (using a credit card for part of a payment and cash for the rest, for example), and 49% seeing increased mixed funding sources (e.g., scholarships, loans, out-of-pocket payments)
However, this evolution comes with complications. Payment method fragmentation is creating back-end operational challenges, with 44% of institutions reporting increased costs associated with managing multiple payment platforms. Additionally, 52% report delays in receiving funds, 40% note increased administrative workload, and 37% cite more frequent errors and discrepancies.
Colleges adapt to enrolment and affordability challenges
The study highlights how institutions are adapting to enrolment pressures, with 29% of campus leaders saying cost pressures are limiting enrolment recovery. In response, institutions are expanding support:
- 40% of colleges report that tuition gaps have widened in the last 12 months
- 51% are increasing scholarship aid packages
- 76% report students increasingly turn to payment plans as tuition gaps widen
- Schools see growth in employer (63%) or third-party (27%) tuition payments
Security readiness strong, but campus fraud concerns persist
Institutions demonstrate confidence in their cybersecurity preparedness, with 71% saying their school is prepared for a major cyber incident. However, the research reveals emerging threats:
- 35% of campus leaders say fraudulent enrolments are rising, while another 37% say they are declining, showing a mixed trend across campuses
- 28% of leaders say physical and digital security still operate in silos on their campus
- 50% are monitoring transactions in real-time to combat fraud
- 71% of campus leaders say outdated security technology puts student safety at risk
Looking ahead
The research points to a sector in transition. While AI implementation is advancing rapidly, institutions continue to grapple with fragmented systems and competing priorities. Payment modernization, in particular, reflects a broader challenge: student preferences are evolving faster than back-end systems can adapt, creating operational friction even as schools work to improve the student experience.