In the golden decades that stretched from the end of World War II to the 2010s, there was almost no better business to be in than higher education.

What’s that you say? A university is not a business? Well, I take the point, but just the same, universities were certainly operating more and more like businesses, with glossy marketing campaigns, sophisticated plans to ensure more admitted students actually enrolled and elaborate price discrimination schemes designed to squeeze every last dollar out of students. Increasingly, they also adopted that classic business maxim: “The customer is always right.”

It’s hard to quarrel with success, I suppose. Demand surged in those postwar years, along with the wage premium for college graduates. The number of science and medical faculty increased as the government invested huge sums in research. Academia’s size, prestige and influence over public policy kept growing, too, and higher-education spending rose from less than 1 percent of gross domestic product in the late 1940s to around 3 percent just before the pandemic.

Those happy days are over. The number of American high school seniors peaked in 2025, reaching a “demographic cliff” that is sure to worsen an enrollment decline already underway. The Trump administration, as you’ve no doubt heard, has slashed research funds, which arguably was possible only because American trust in higher education collapsed between 2015 and 2023, opening up space for politicians to attack colleges previously viewed with near-reverence. It has recovered a bit, but Americans still trust our postsecondary institutions a lot less than they once did.

There are two popular explanations for that decline in trust, both of them wrong. Republicans crow “Get woke, go broke,” while the left tends to blame Republican attacks on the “ivory tower.” In fact, as a much-discussed new report from Yale University demonstrates, the problem is far broader: grade inflation and mission creep, administrative bloat and opaque admissions standards, soaring tuition costs and smaller returns on that investment.

OK, yes, there was also a marked leftward drift that tipped into purges of faculty and propagandistic party lines in the mid-2010s. And yes, that triggered an unhelpfully vehement conservative backlash. But that drift looks like a symptom of a common business problem: the booming conglomerate that loses focus on its core competencies and keeps expanding until external reality and internal contradictions force a reckoning.

Instead of doing the things that only a university can do — producing new knowledge and disseminating that knowledge to students — academic institutions leaped into jobs they were ill-equipped to carry out, such as “purveyor of social justice.” The report is politely scathing about the contradictory demands this placed on institutions, especially elite ones, which were supposed to be “selective but inclusive, affordable but luxurious, meritocratic but equitable.”

Academia bears much of the blame. But Americans have to bear some, too. The mission creep and increasing opacity didn’t just happen because some professors got too full of themselves; it happened because the public wanted it.

It was like those frozen yogurt chains that got big in the 1990s by claiming their decadent-tasting desserts had practically no calories. This was an impossible dream, but it was a dream consumers were eager to believe. And the public was equally eager to believe that for the bargain price of 3 percent of GDP, universities could keep the rigor of their research and teaching high while fixing every other problem America had, from cancer to economic inequality to racial injustice.

The frozen yogurt moguls chose dodgy lab metrics that bore no relation to what they were serving. Universities achieved a similar impact by shrouding their operations in aspirational euphemism, like nice-sounding “holistic admissions” processes that married unpopular racial quotas to an even less popular preference for “legacies,” athletes and “development cases.”

Schools also maintained hiring processes that were officially open and unofficially discriminatory against conservatives and white men. Campuses, meanwhile, were nominally committed to academic freedom, but developed a rather Soviet-style chill as secretive internal disciplinary systems, which often seemed more interested in social justice than the regular kind, became a weapon to silence opponents.

Meanwhile, the replacement of core curriculums with a smorgasbord of “general education” classes and the rise of grade inflation made it hard to compare students within institutions, much less between them.

The public didn’t demand all these things; it was faculty and administrators who preferred a left-wing monoculture to intellectual diversity. But in other ways, they were just giving us what we wanted. Most Americans who recoiled from large affirmative action preferences would also have recoiled from elite campuses that were all white and Asian, just as most folks who wanted campuses to be a little more politically representative would have balked at hiring quotas for conservatives. So, rather than tell people they had to make hard choices, the schools concocted pleasant fictions that gave the public the illusion of having it all — in much the same way grade inflation gave students the outward signs of excellence without the inward struggle to achieve it.

This sort of cheerful conspiracy is always a rotten business. Eventually, Americans are bound to notice that something is amiss — the growing waistline, the declining value of a degree. And once a storied brand suffers that kind of damage, it faces a long, hard struggle to rebuild.

Megan McArdle is a columnist for The Washington Post.