Federal regulations surrounding higher education M&A are widely expected to ease, but many industry observers do not expect it to unleash a surge of activity.

The US Department of Education in July said it planned to rework federal student aid eligibility policies that it believes “unnecessarily target faith-based or for-profit institutions and interfere with efficient and beneficial mergers, sales, and transfers of institutions of higher education.”

Yet higher education M&A in North America remains muted.

The education sector recorded 85 deals worth USD 363.2m year-to-date through 28 September, compared with 85 deals worth USD 372.7m during the same period last year, according to Mergermarket data.

Year-to-date deal value fell to its lowest level since 2019 and remains well below the five-year average of USD 1.2bn for the period. Activity also has cooled sharply from the sector’s 2022 peak, when education dealmakers announced a record-equaling 137 transactions worth USD 2.2bn over the full year.

Source: Mergermarket, data correct as of 29 Sep 2026

A bifurcated market

Industry participants said demographics, enrollment trends and labor-market demand are having a greater influence on transaction activity than regulatory policy.

“Regulations have killed this industry more than once,” noted a sector advisor.

For-profit postsecondary enrollment peaked at 2.43 million students in the 2010-2011 academic year, representing 11.2% of all students enrolled in degree-granting and non-degree-granting institutions, according to a BMO report.

The sector subsequently lost share amid regulatory pressures in the Obama Administration. Enrollment bottomed in the 2018-2019 school year before partially recovering. By 2024-2025, for-profit schools enrolled roughly 1.32 million students, up 3.8% from the prior year and representing a 6.6% market share, the report said.

Traditional universities continue to struggle and will need to consolidate regardless of the regulatory climate, industry participants said. Private equity investors have largely avoided acquiring for-profit universities after widely publicized regulatory infractions over deceptive recruiting and advertising practices during the Obama and first Trump administrations.

Buyer interest has centered on vocational schools tied to sectors with strong job growth, such as nursing, healthcare and, to a lesser degree, skilled trades.

More buyers than sellers exist in those attractive segments, however, while the reverse is true across much of the broader higher education market, especially among small, rural nonprofit colleges.

“The market is split,” said Matt Tower, vice president of strategy and research for Whiteboard Advisors. “Buyers want premium assets – nursing comes up all the time.”

Tower pointed to HCA Healthcare’s acquisition of the College of Healthcare Professions as an example of sustained demand for healthcare-focused education assets.

Private equity firms remain highly interested in nursing schools, agreed the sector advisor, but few platform assets are available for acquisition. By contrast, they have little interest in traditional postsecondary schools.

“Universities are in deep trouble. Consultants are being hired to sell off campus assets,” the advisor noted.

Lower enrollment and the inability to raise tuition fees are taking a toll, even if some schools already charge USD 100,000 per year.

Real estate drives activity for stronger institutions

Universities with large endowments remain among the few buyers with financial flexibility to pursue acquisitions. Many deals are driven, at least partly, by real-estate considerations, Tower said.

Examples of buyers looking for premium real estate include Vanderbilt University, which acquired California College of the Arts and Northeastern, which acquired Marymount Manhattan College.

At the other end of the market, smaller rural nonprofits are struggling to find buyers.

“This is reflective of what small colleges are going through when colleges struggle to attract students,” said Tower, citing Vermont’s Green Mountain College as an example.

Trade schools’ more favorable outlook

Jason Altmire, CEO of CECU, a national association representing private trade schools and career colleges comprising 960 US campuses, is more sanguine on the impact of pending regulatory changes.

“You’re going to see (deal) announcements in the fall,” Altmire said. “There is a huge uptick in PE involvement. They come to our conferences and ask for information.”

Investors view the current administration as more supportive of transactions that require Department of Education approval than recent Democratic administrations, he said.

Growing recognition of the important role trade schools play in addressing workforce skills shortages is also drawing interest to the sector, he said.

Altmire said he has seen an increase in deal announcements in the last three to six months. He pointed to Newcastle School of Trades and the combination of Florida Tech with Puerto Rico-based NUC to form Northbridge University as examples.

He expects four more announcements in the fall despite the fact that the Department of Education has yet to finalize the proposed regulations. A negotiated rulemaking process is not expected to take place until early next year, he said.

“There is an expectation that the (M&A) review process will be streamlined,” he said.

Publicly listed strategics such as Lincoln Technical and Legacy Education are also actively in growth mode, opening new campuses and potentially pursuing acquisitions, Altmire said. Atlanta, Nashville, Houston and Dallas are attracting the strongest interest.

Still, Altmire acknowledged that labor-market needs may ultimately prove a bigger accelerant of M&A than regulatory change.

“Not being able to find enough skilled workers is as much or more of a catalyst than the regulatory side.”

While traditional four-year universities face an “enrollment cliff” driven by demographic trends, trade schools continue to avoid similar declines in student demand, Altmire said.

Tower said the new regulations might spur M&A activity to some extent, but probably not until 2028. By then, however, another administration could reshape federal education policy.

“Who knows if the priorities will carry over,” Tower said.