What if the problem with higher education isn’t that students have lost faith in college?
What if they still believe in it, but they’re no longer convinced the labor market will reward that belief?
That tension runs through Lumina Foundation and Gallup’s latest State of Higher Education 2026 report. The data tell a surprisingly hopeful story: Nearly three in four adults without a degree say a college credential is at least as important today as it was 20 years ago. Most current students say their education is worth the cost. Most employers say a degree will remain a prerequisite for quality jobs at their organizations over the next five years.
And yet something feels broken.
You can hear it in the stories of recent graduates who send out hundreds of applications and get no interviews. You can see it in students’ anxiety about AI. And you can feel it in the growing gap between how higher education talks about its own value and how hiring actually works.
During a recent webinar we hosted to discuss the findings, Laura Ulrich from Indeed described a labor market that is far more uneven than most people realize. Some graduates are doing very well, especially in fields with strong work-based learning pipelines, such as nursing or education. Others, including graduates in fields that seemed like guaranteed pathways just a few years ago, are running into a wall. Job postings in some technology and data science fields have dropped sharply even as the number of graduates in those majors has grown.
That matters because for years, we treated the degree itself as the transition point. Finish school. Enter the workforce. Launch a career.
Employers want evidence that graduates can operate in real-world environments. They want proof that someone can communicate, adapt, solve problems, and function in ambiguity.
The irony is that higher education may already be developing many of those skills. The problem is that our hiring systems struggle to recognize them.
Scott Fleming from the State Council of Higher Education for Virginia put it plainly during the webinar: employers are trying to de-risk hiring. Degrees still matter, but employers are looking for internships, applied learning, and work experience. Something that proves a candidate can function on day one.
At the same time, employers are surprisingly unclear about what they actually want. They say they value communication, leadership, and critical thinking. But those skills are incredibly hard to assess in hiring processes driven by automation, keyword screening, and AI-generated applications. Ulrich noted that communication and leadership are among the fastest-growing skills in job postings right now, but employers still struggle to consistently evaluate them.
That creates a strange paradox.
The labor market increasingly values human skills just as hiring systems are becoming less human.
AI is accelerating that tension.
One of the most interesting moments in the webinar came when panelists stopped talking about AI as a threat to higher education and began discussing it as a threat to predictability. Lumina-Gallup found that nearly half of currently enrolled students have considered changing their major because of AI. Not because they think education has lost value, but because they no longer trust that the path from degree to job is stable.
Students are not rejecting education. They are questioning certainty. That distinction matters.
Scott Pulsipher from Western Governors University argued that this may actually increase the importance of higher education’s most human functions: reasoning, judgment, communication, and the ability to navigate ambiguity. The future may not reward people who simply possess information. It will reward people who can interpret, apply, and use it effectively in rapidly changing environments. In other words, the skills most valued in the future may also be the hardest to measure in the hiring process. Ironically, those are the same capacities that have been embedded in a liberal arts education for generations.
But there’s another structural problem underneath all of this.
The programs most closely connected to stable employment are often the hardest and most expensive to scale. Nursing programs require simulation labs, clinical placements, expensive equipment, and hard-to-find faculty. Large lecture courses are cheap to run. As Ulrich noted, teaching economics takes a whiteboard. Training nurses is another story entirely.
So while policymakers and employers demand tighter alignment between education and workforce needs, the financial structures of higher education often reward the opposite.
That is the conversation we still are not having honestly.
Not whether higher education has value. The data are clear on that.
Our systems of learning, hiring, and workforce signaling must evolve fast enough to connect that value to opportunity in ways students can actually see and trust.
Because right now, too many students follow the rules only to discover the rules have changed while they were in class.