By Bryan Newman, CEO of Studio Enterprise
Key Points:
- DOE Overhaul Unleashes Opportunity: The Trump administration’s 50% staff cut at the Department of Education (DOE) targets higher ed regulators, sparking short-term disruption but paving the way for hyper deregulation.
- Valuation Gap Beckons Investors: Publicly traded schools (10-13x EBITDA) dwarf privately held ones (5-9x EBITDA), offering strategic acquirers and private equity a rare chance to buy low now and win big as multiples rise.
- Growth Unleashed: Deregulation will boost EBITDA by cutting compliance costs and freeing innovation, while student loans and Pell Grants will stay secure.
- Studio Enterprise Leads the Way: Our platform is ready to guide schools and investors through the transition, turning uncertainty into a competitive edge.
The Trump administration’s long-standing pledge to dismantle the Department of Education (DOE) became reality this week with the layoff of nearly 50% of its workforce—slashing staff from over 4,100 to approximately 2,183. President Trump and Education Secretary Linda McMahon have cast this as a bold rejection of a failing bureaucracy, citing America’s outsized per-pupil spending alongside dismal student performance in math, reading, and science. For higher education, the stakes are immediate and complex. The cuts have targeted teams essential to regulating our sector, signaling a shift toward hyper deregulation that brings short-term uncertainty but promises long-term prosperity.
As CEO of Studio Enterprise, an Education Service Platform (ESP) providing shared services—marketing, compliance, technology, real estate, call center, and financial support—to colleges and universities nationwide, I view this as a defining moment. Higher education professionals, investors, and regulators at the DOE and Congress face a rapidly changing landscape. The loss of key regulatory functions poses transitional challenges. Yet, the broader horizon is bright: schools will thrive, private capital is set to pour in, and innovative platforms like ours are poised to help institutions flourish in this new era.
Regulatory Functions at Risk
The DOE layoffs have hit hard at the heart of higher education’s regulatory framework, eliminating staff who oversee the technical processes colleges and universities depend on to access federal student aid and maintain legitimacy. Affected teams include those enforcing financial responsibility standards, the 90/10 rule (capping for-profit schools’ reliance on federal funds), incentive compensation regulations, third-party servicer oversight, and those managing Program Participation Agreements (PPAs). Also impacted are processes like changes in ownership (CIO), updates to the Eligibility and Certification Approval Report (ECAR) system (which authorizes federal aid for specific programs), Financial Responsibility, and countless other mechanisms that keep our ecosystem operational.
In the short term, this brain drain will clog the gears of higher education. Institutions seeking PPA renewals, ownership transitions, or program expansions may encounter delays as the DOE’s remaining staff struggle to keep pace. Many of these regulations—already contentious during Trump’s first term—now hang in limbo, their future uncertain without their enforcers. But this is not a fatal blow. Higher education rests on the bedrock of government-guaranteed student loans and Pell Grants, which together exceed $150 billion annually. The White House has no plans to abandon these programs; instead, discussions point to shifting Federal Student Aid (FSA) administration and oversight to agencies like Treasury or Commerce. Schools must keep running, even as the regulatory framework recalibrates.
Hyper Deregulation: A Long-Term Win
Beneath the surface turbulence lies a powerful upside: hyper deregulation is a boon for higher education over the long haul. Though well-intentioned, the DOE’s intricate rules have too often choked innovation, inflated compliance costs, and repelled investment. The 90/10 rule, for example, has driven tuition hikes as schools stay ahead of federal revenue, while incentive compensation bans have hamstrung talent acquisition. A lighter regulatory hand will spark growth, freeing institutions to pioneer new models, broaden their reach, and adapt swiftly to market needs—driving EBITDA expansion as operational efficiencies take hold.
This deregulatory wave also illuminates a striking opportunity for investors. Today, a valuation gap yawns between publicly traded higher education institutions, commanding multiples of 10-13 times EBITDA, and privately held ones, languishing at 5-9 times EBITDA. In the short term, strategic acquirers—public companies with robust balance sheets—can snap up undervalued private institutions at bargain prices. Private equity firms and sophisticated investors have the same window to secure high-quality assets at a discount. As the dust settles at the DOE and regulatory clarity emerges, this gap will narrow, rewarding early movers with significant multiple expansion on their acquisitions. Add to that the EBITDA growth from deregulation—fewer compliance burdens paired with rapid go-to-market strategies—and the case for investment becomes irresistible.
Financial buyers and strategics are already buzzing with excitement. In the months ahead, expect a tidal wave of private capital into higher education fueled by this deregulatory momentum. Private equity firms, once burned by the sector’s red tape, again see a fertile field for consolidation, tech-driven efficiencies, and healthy returns. The assurance that student loans and Pell Grants will endure—under a new bureaucratic banner—only amplifies this optimism. Regulators, meanwhile, must balance oversight of this capital influx with a restraint that avoids stifling the sector’s newfound agility.
Studio Enterprise: Bridging the Gap
At Studio Enterprise, we’re built to guide institutions through this duality of short-term flux and long-term potential. Our regulatory and compliance teams are doubling down to help colleges weather delays in CIO approvals or ECAR updates by keeping our partners focused on student outcomes. Our financial services experts are crafting cash flow strategies to smooth over transitional bumps, while our technology and marketing divisions are empowering schools to capitalize on deregulation’s growth opportunities. For financial firms, we’re a partner to maximize portfolio value—streamlining operations and minimizing risks in a dynamic market.
To higher education professionals, I say: stay calm. The processes that power your institutions—however intricate—will find solid ground, whether through state leadership, a restructured federal agency, or industry innovation. The DOE’s transformation isn’t a retreat from higher education; it’s a pivot toward efficiency and local control. For Congress and remaining DOE regulators, this is a chance to redefine your mission—prioritizing administrative clarity and transparency over micromanagement.
A Flood of Opportunity
The Trump administration’s overhaul of the DOE opens a bold new chapter for higher education—one rooted in adaptability and ambition. Yes, the loss of regulatory staff will spark short-term headaches, but these hurdles will get cleared. The reward is a sector liberated from outdated shackles, primed for innovation, and made irresistible to investors. Sophisticated players—whether strategic acquirers or investment capital firms—stand to gain doubly by acting now: snapping up assets at low multiples that will appreciate as valuations converge and unlocking EBITDA growth as deregulation fuels operational efficiency. At Studio Enterprise, we’re dedicated to steering our partners through this shift, transforming uncertainty into advantage.
The clock is ticking for investment firms and strategics—seize this rare convergence of value and growth. For regulators, it’s time to rethink oversight in a decentralized era. And for higher education leaders, it’s a call to lead fearlessly into a future where flexibility, not bureaucracy, fuels success. The floodgates are open. Let’s build something remarkable together.
About Bryan Newman
Bryan Newman is the dynamic CEO of Studio Enterprise, a leading education services platform providing shared services to colleges and universities. With over 25 years of extensive experience in higher education and strategic business operations, Bryan has a proven track record of driving innovation, growth and transformation across various educational institutions and companies.