Liberal Arts Colleges: The Unexpected Winners of Higher Ed's Crisis

While America's research universities burn through billions in suspended federal grants and grapple with AI-powered academic dishonesty, an unlikely group of institutions is quietly thriving. Small liberal arts colleges—those intimate, often overlooked schools that prioritize teaching over research—may have accidentally positioned themselves as the most resilient players in higher education's perfect storm.

The contrast couldn't be starker. Columbia, Harvard, and Northwestern scrambled to negotiate with the Trump administration after losing hundreds of millions in research funding. Meanwhile, Amherst College operates with just $3 million in federal research grants total—pocket change that makes it virtually immune to Washington's financial pressure tactics.

The Research University Trap

At the heart of higher education's vulnerability lies a fundamental truth most Americans don't fully grasp: at research universities, teaching undergraduates comes second to research. Graduate students lead discussions, perform laboratory work, and serve as the engine of scientific productivity. Faculty worth is measured by grant dollars secured, papers published, and doctoral students advised.

This system created magnificent discoveries and Nobel prizes. It also created a house of cards.

When the Trump administration suspended research grants and threatened to cap "indirect costs"—the overhead fees that keep universities running—schools like Washington University in St. Louis (which received $731 million from the National Institutes of Health alone in 2024) had little choice but to negotiate. Some signed agreements committing to "fostering a vibrant marketplace of ideas" and protecting conservative viewpoints.

But Davidson College in North Carolina? Smith College in Massachusetts? They weren't even asked to sign such compacts. Their research budgets are too small to matter as leverage.

The Intimacy Advantage

What these colleges lack in research firepower, they make up for in something increasingly rare: genuine human connection. At Davidson, President Douglas Hicks greets dozens of students by name in the dining hall. At Amherst, classes with just a handful of students make it nearly impossible to hide behind AI-generated work.

This intimacy breeds something unexpected: civil discourse. Connor Hines, a conservative student body president at Davidson, and Nina Worley, a liberal education major from Harlem, disagree on Alexandria Ocasio-Cortez's policies but maintain deep respect for each other. "You can't hide," Davidson's president told me—and that forced proximity may be democracy's secret weapon.

While public universities shut down DEI offices and censor course content under political pressure, liberal arts colleges have been quietly perfecting the art of disagreement. Davidson created its Deliberative Citizenship Initiative in 2019, years before "civil discourse" became a political talking point. "We're the hipsters of civil discourse," says associate professor Chris Marsicano. "We were doing it before it was cool."

Wrestling with AI's Ambiguity

Perhaps nowhere is the liberal arts advantage more apparent than in confronting artificial intelligence. At research universities, faculty and students tend toward extremes: AI is either an existential threat or a professional necessity. Little room exists for nuance.

But at Davidson, students like Nina Worley and her roommates spend evenings debating the ethics of AI-generated emails and the environmental costs of data centers. "Everyone's wrestling with it," she says—and that wrestling, that comfort with ambiguity, may be education's most valuable skill.

The numbers support this thoughtful approach. While Davidson has seen some increase in honor code violations due to AI, the scale pales compared to the wholesale academic dishonesty plaguing larger institutions. When your chemistry professor Christopher Durr knows you personally and classes contain just a few students, gaming the system becomes significantly harder.

The Practical Question

Yet a nagging doubt persists: Is learning "how to think" a luxury in 2026? When doctoral programs face cuts and professional school admissions tighten, does a liberal arts degree still pay off?

The seniors I met at Amherst suggest it might. Hedley Lawrence-Apfelbaum heads to Oxford then Harvard Law. Ayres Warren has already published research on breast cancer disparities. Shane Dillon plots a political career. But what struck me wasn't their achievements—it was their composure in uncertainty.

"We'll see," Dillon said when asked about his fears and hopes. These students seemed unusually attuned to their predicament, living in the thickness of their lives rather than just dreaming of what they might become. They understood that uncertainty is expected, and the future lasts a long time.

The Fragile Sanctuary

This resilience isn't guaranteed. Liberal arts colleges face their own vulnerabilities. Haverford College endures a federal civil rights investigation. Congress voted to increase endowment taxes from 1.4% to 8%—though schools with fewer than 3,000 students remain exempt for now.

That exemption could disappear. Federal Pell Grants supporting low-income students could be threatened. Even defending against investigations costs money these schools don't have in abundance.

More fundamentally, these colleges depend on a society that values education for its own sake—a society willing to pay $100,000 annually for the privilege of learning to think rather than just to earn. As practical concerns mount and student debt soars, that value proposition grows harder to defend.