Universities, with their trademark cautious pace, may now be lacing up their running shoes to join the race of online learning innovation. But let’s be honest—when it comes to embracing transformation, higher education is more of a marathoner than a sprinter, with occasional detours to debate the route. As we step into 2025 the journey toward a truly reimagined online learning ecosystem is just beginning. It’s not about sweeping overnight changes but rather the cautious first steps of institutions realising that the path ahead requires agility, bold thinking, and may be fewer pit stops for deliberation.
AI’s Permanent Role in Higher Education
Two years after generative AI entered the mainstream, the technology has permeated nearly every aspect of university life. We’ve moved through concerns around academic integrity and students using the technology to cheat, toward thinking more about how higher education can embrace AI tools, However transformative change is yet to manifest in our Higher Education institutions, with recent surveys showing that most Universities are largely unprepared for AI’s rise. 2025 will be a year in which Higher Education will need to continue to navigate AI’s potential and accept that the technology is here to stay. The future is already here. AI is being used to reshape teaching and learning by enabling adaptive tutors, personalised learning assistants, assignment marking, and AI-powered content and simulations, all aimed at improving educational outcomes and reducing student stress. And it is not limited to teaching and learning. Universities are leveraging AI for operations, such as admissions, financial aid, and research administration. Institutions that fail to embrace AI risk irrelevance, akin to rejecting the internet decades ago.
Universities will also begin to position AI literacy as a core digital competency. Comprehensive training programs must bridge current gaps, addressing global challenges such as reducing AI’s energy consumption, fostering cultural inclusivity, and ensuring equitable access to AI technologies. Institutions that lead in these areas will set the standard for responsible innovation and affirm their relevance in an increasingly digital and interconnected world.
Ethical AI, Diversity and Sustainability
This leads on to how the sector will continue to leverage one of its greatest strengths: critical evaluation and accountability for unethical practices. At its core, higher education is built on a foundation of social justice, and we should expect it to continue to promote ethical, inclusive, and sustainable use not only of AI, but digital technologies in general. This ethical focus extends to operations such as application processing, enrolments and retention. Transparency in data usage and AI decision-making processes will be increasingly demanded by stakeholders, including students and policymakers.
Ed-tech companies and Online Programme Providers (OPMs) seeking partnerships with universities should prepare for heightened scrutiny of their ethical AI practices, green technology credentials, and equity, diversity, and inclusion (EDI) commitments. Tenders will increasingly demand robust evidence in these areas. While discussions about carbon footprints have traditionally centred on physical campuses, the energy-intensive nature of AI, and the online industry’s reliance on the mining of precious metals will bring online distance learning under greater environmental scrutiny.
Product Development, Industry Collaboration and Workforce Alignment
A deepening collaboration between universities and industries is on the cards for 2025. Employers are increasingly demanding graduates equipped with skills in AI, data analysis, and other rapidly evolving technologies. To meet these expectations, institutions can’t rely on faculty alone to design curriculum – it’s more practical to pull the data from employers. Whilst students may be drawn to faculty expertise at the top Universities, unless you are an OxBridge, Harvard or MIT, the draw for online students is modern, career outcome focused curriculum.
According to the latest, revised, HESA data we are not seeing a growth in enrolments in fully online degrees in the UK. What we are seeing however is greater diversity within the product portfolio offered in the online education market. City St Georges and the London Institute of Business and Finance, now offer on-demand degrees, whilst emerging digital-first Universities like Nexford University, emphasise affordability. With tuition aligned to local economies, as well as using AI to analyse large volumes of job data, automate grading and create course content at a fraction of the cost, Nexford aims for learners achieve a three to five times return on their educational investment within three to five years of graduating.
It may well be that 2025 will (finally…) emerge as the year of the micro-credential, with online courses shifting toward modular, stackable credentials that align with workforce needs. These flexible programmes allow students to upskill continuously, addressing lifelong learning demands. Micros have their problems and the current landscape is messy, whilst lower in cost they still carry significant student acquisition burden (for which student finance is not currently available), and there is no framework to collect micros from across different providers and stack them into a qualification. In addition institutions rarely see revenue and margin in the early days. However, if the sector is creative in designing products that directly address the contexts of students lives, workforce needs, and quality provision we are likely to see an increase in activity in this area. Universities that continue to use strategies from the earlier days of the online degree market may soon find themselves falling behind their competitors.
In a similar vein, Universities should pay close attention to emerging global markets. HolonIQ predicts that by 2050, the number of postsecondary students worldwide will increase by two billion, with the largest growth driven by expanding youth populations in Africa, Southeast Asia, and Central Asia. In these regions, online education is set to become a credible and scalable solution for delivering higher education, supporting economic development, and equipping the workforce with essential skills. These markets are likely to foster greater innovation, with new, purpose-built systems emerging from the ground up. In the race to grow educated populations, it will be interesting to see how far the ethical considerations mentioned above play a part.
Financial Pressures and Government Reforms
The financial strain on higher education institutions is intensifying. Course closures, redundancies, and reduced international student enrolments have pushed universities to re-evaluate their business models. England’s modest tuition fee increase to £9,535 in 2025 has not alleviated the broader funding crisis, prompting calls for systemic reform. Education Secretary Bridget Phillipson’s ‘major reforms’ for universities—focusing on access, efficiency, and economic contributions—signal a government push for greater accountability and value for taxpayers and students. Universities in particular will start to explore alternative academic operating models, efficiencies through smart use of technology and data, and portfolio diversification, including online offerings, to innovate their way out of the funding crisis. This in turn is likely to lead to more partnerships with private companies such as OPMs to build capability and capacity for growth. For more detail on the movement in the public-private higher-ed space check out Neil Mosley’s annual and quarterly reports.
In terms of student finance, the Lifelong Learning Entitlement (LLE) has persisted despite a change in the English government. However, its implementation has been delayed, and it remains focused on funding courses at levels 4 to 6 (undergraduate level). Without expanding this to cover postgraduate courses, the pathways for the development of online courses is more restricted.
Experts warn piecemeal solutions will not suffice. Integrating further and higher education, addressing cost-of-living challenges for students, and modernising funding mechanisms are critical to securing the sector’s future. As Dani Payne argues, anything less than a comprehensive review risks perpetuating a broken system.
Conclusion
As 2025 unfolds, higher education finds itself embarking on a cautious but critical journey of transformation, and the sector’s navigation of AI, workforce-aligned education, global opportunities and a financial crisis will demand agility and forward-thinking.
The challenges are undeniable, but so too is the potential. By balancing innovation with responsibility, higher education has the opportunity to redefine its role in an AI-driven world, whether through micro-credentials, global market engagement, or sustainable practices.. The journey may still be in its early stages, but one thing is clear: the time for slow deliberation is over. The race toward meaningful transformation has begun—shoes tied, ready or not.