Federal actions have created significant turmoil for schools, but despite concern about what lies ahead, merch sales in promo’s top market continue to be resilient.

That was the prevailing sentiment from distributors around the United States who spoke with ASI Media about their work with clients in the education space, the end-market in which the promotional products industry generates more sales than any other.

Faced with prospective federal funding cuts and actions by the new presidential administration to eliminate the U.S. Department of Education, colleges, universities and public school districts are facing significant challenges.

Amid worry and uncertainty over the impact of these cuts and whether they will even come to fruition, higher education institutions around the nation, including Brown University, Duke University, Harvard University, the University of Pennsylvania, the University of Washington and the University of California, have recently announced hiring freezes and chills on discretionary spending.

More Than 2,000
The number of jobs Johns Hopkins University is reportedly eliminating following losses in federal funding

There have also been pauses on graduate school admissions and the withdrawal of provisional acceptance offers to students who planned to pursue doctorates, along with high-profile layoffs.

Johns Hopkins University, for instance, announced it would be eliminating more than 2,000 jobs following the loss of $800 million in federal funding it was to receive through the U.S. Agency for International Development – another organization that has come under fire from the presidential administration. Most of those jobs – 1,975 – were based abroad but 247 are in the U.S. “This,” said a Johns Hopkins statement in announcing the layoffs, “is a difficult day for our entire community.”

So Far, So Good(ish)

While some distributors said this early 2025 disruption is combining with other factors to limit spend from education clients, it was more common for distributors to tell ASI Media that sales to the ed sector have so far largely gone unaffected – even, in cases, improved year over year.

Take Thumbprint (asi/305623), the Indianapolis-headquartered distributorship that recently rebranded from its former name ScreenBroidery. CEO Tom Rector says the firm, a Counselor Best Place to Work in promo, has experienced an uptick in sales with university clients this year.

Part of this, he explains, is due to admissions and student life departments trying to be more visible and competitive in attracting students at a time when enrollment could be poised to increase given the potential tightening in the U.S. job market.

$3.6 Billion
Distributor sales within the education market in 2023, the most recent year for which industrywide numbers are available. That accounted for nearly 14% of total distributor sales – the most of any end-market. (Counselor 2024 State of the Industry)

Athletics is another driver. “College sports remain a major business, and demand for game day promotions, fan experience merchandise and general branded apparel has stayed strong – if not grown – as schools look to maintain alumni and fan engagement,” Rector tells ASI Media.

Meanwhile, Liquid Screen Design (asi/254663), another Counselor Best Place to Work, reported that its sales with education clients are up about 11% year over year to date.

“Despite concerns around tighter budgets, government uncertainties and economic shifts, our clients haven’t pulled back on their annual spend,” says Kayla Huglen, brand engagement specialist at the Minnesota-headquartered distributorship.

Huglen says Liquid Screen Design’s growth in the schools’ sector is a result of proactive marketing strategies and a keen focus on ROI-driven planning. “When the landscape feels uncertain, clients want to know their investments are making an impact,” Huglen asserts. “By helping clients track ROI and fine-tune their promotional product strategies, we’ve built trust – and often see education clients increasing their spend because they feel confident in the results.”

Proforma 3rd Degree Marketing (asi/490897) works with more than 20 colleges and universities, primarily along the East Coast. Steve Flaughers, owner and president of the distributorship, says that sales with such clients have increased and that he hasn’t heard concerns from them that federal actions could check their print and swag investments.

“By helping clients track ROI and fine-tune their promotional product strategies, we’ve built trust – and often see education clients increasing their spend because they feel confident in the results.” Kayla Huglen, Liquid Screen Design (asi/254663)

Flaughers shares that Proforma 3rd Degree has been marketing more to university clients through “chunky” direct mail packages that include merch, which seem to be having a positive effect on sales. “Most of our accounts in the education space are up,” says Flaughers.

It’s a similar story for California-headquartered Counselor Top 40 distributor PromoShop (asi/300446).

“We have not heard about any changes or shifts yet regarding marketing and merchandise with education/schools clients,” says PromoShop CEO Memo Kahan, a member of Counselor’s Power 50 list of promo’s most influential people. “We continue to work with some large institutions and have not seen a slowdown in their buying or engagement. Even as the world continues to be fickle, there has not been any real cause to stop messaging and spending on merch.”

Of course, it would be painting too rosy a picture to suggest distributors everywhere are humming along with sales to the education market. Some told ASI Media that business has dipped, with various factors potentially behind the drop.

Pullman, WA-based College Hill (asi/164578) started as a distributorship almost exclusively focused on the collegiate market. The firm has since greatly diversified, but still about 20% of its business comes from colleges and universities around the nation.

General Manager Gabi Gebauer-Lewis says that business with education clients is down compared to 2023 and nearly steady with 2024 – a tepid performance that College Hill expected. While Rector’s university clients may be looking to increase spend to capitalize on potential heightened enrollment interest, Gebauer-Lewis says clients College Hill works with have contended with declining enrollment, leading to budget cuts over the last year or so.

“We haven’t seen clients pull back specifically due to concerns related to federal issues,” says Gebauer-Lewis. “However, broader financial constraints within higher education – such as enrollment-driven budget cuts – are influencing spending decisions.”

Federal Actions

President Donald Trump’s administration has taken actions in the opening months of 2025 that have caused education industry leaders to fear losses in funding and support for research and programs. Given court entanglements and constitutional questions, it’s not clear what will hold and what long-term impacts educational institutions will feel. Still, the upheaval has unsettled education leaders. Here’s a breakdown of some of the developments. The administration has …

READ MORE

*Moved to abolish the U.S. Agency for International Development (USAID), which has provided billions in funding to colleges over the years for research and the like. U.S. District Judge Theodore Chuang this week ruled that the Department of Government Efficiency (DOGE) likely violated the constitution when it clamped down on USAID, though the Trump administration has promised to appeal. Chuang blocked DOGE and its head Elon Musk from additional USAID cuts, among other orders. However, Chuang’s ruling doesn’t reinstate previously axed USAID work, including humanitarian and development assistance programs. Furthermore, despite Chuang’s ruling on DOGE, Trump administration officials now in charge of USAID wouldn’t necessarily be running afoul of the constitution if they initiated more cuts in the organization, according to the Associated Press.

*Supported the National Institutes of Health move to cap reimbursements it pays for costs indirectly related to research at 15%, down from the average 28% – a measure that could cost colleges more than $4 billion in research-related funding. In early March, a federal judge ordered a preliminary injunction that prevents NIH from implementing its cap measure. The case must first be adjudicated, and only if NIH prevails could it institute the cap, given the current injunction.

*Pulled $400 million in federal grants and contracts from Columbia University. The administration warned that other universities could experience similar penalties as part of a stated crackdown on alleged anti-Semitism on campuses.

*Sought to shutter the U.S. Department of Education. Trump signed an executive order on March 20 that directs U.S. Education Secretary Linda McMahon “to take all necessary steps to facilitate the closure [of] the Department of Education and return education authority to the states,” according to the White House. However, eliminating the DOE may require an act of Congress. Still, about half of DOE staffers are already set to be out the door, with about 1,300 in line to soon have their jobs eliminated and nearly 600 having already resigned/retired this year. Federal dollars reportedly only make up 6% to 13% of public schools’ funding, but that money from Washington, D.C., is often used to provide assistance and support to students living in low-income communities and children with disabilities.

Shifting Practices & Preferences

In part due to emerging challenges, promo distributors said that some preferences and practices with education decision-makers have been changing to a degree.

“Our higher-ed partners are looking at more effective ways to promote their initiatives,” says Rector. “Recently, we’ve been asked by education clients to find more sustainable product options that will have longer staying power. We’ve also seen more focus on print solutions and less on promo.”

While Liquid Screen’s clients continue to spend on swag, Huglen says they’ve become more intentional about purchasing decisions.

“Recently, we’ve been asked by education clients to find more sustainable product options that will have longer staying power.” Tom Rector, Thumbprint (asi/305623)

“Clients are being extra thoughtful about ROI before they give the green light, and projects that might have been quickly approved in the past now go through a more careful review, meaning approval decisions are taking a little longer,” Huglen says. “By helping clients clearly see the value of their investments, we’re able to support their decision-making and keep projects moving forward.”

Huglen added that education clients are tracking federal issues, including possible tariff impacts, and that’s influencing how they view pricing. “While it hasn’t caused a major shift in purchasing just yet, clients are anticipating rising costs,” Huglen says. “This could lead to a pivot in product choices – for example, opting for budget-friendly notebooks instead of premium water bottles.”

Joana Glasscott, a senior sales executive with Counselor Top 40 distributor Stran Promotional Solutions (asi/337725), says one new wrinkle among her education buyers is that they’re eager to ensure they spend what they can now, given potential funding issues on the horizon. “A lot of departments are making sure they’re spending their budgets sooner than later since they are uncertain as to what changes might be coming and how they will be affected,” Glasscott says.

Mixed Outlook

Given the complex dynamics in play, merch pros' crystal balls are cloudy when it comes to predicting education market promotional products sales over the next 12 to 18 months, with some feeling a current of cautious optimism and others believing business will probably be down. Both K-12 school districts and higher education institutions often run on a July-to-end-of-June fiscal year, so there could be greater clarity in the early third quarter, distributors say.

For now, though, distributors are assessing the market as they go and adapting. Some see cause for tempered confidence. Rector notes many of Thumbprint’s university clients receive funding from the state of Indiana, which he says remains fiscally stable – perhaps a good sign. Still, Rector sounds a note of caution.

“We’re keeping a close eye on how federal policy changes could trickle down to the state level,” Rector says. “If broader budget constraints or tuition-related policies shift, we could see certain program budgets tighten. For now, demand is stable to slightly up, and we expect it to stay that way through the rest of the year.”

"Given ongoing budget cuts and financial pressures, we expect spending to remain conservative, with universities prioritizing essential expenditures over discretionary purchases.” Gabi Gebauer-Lewis, College Hill (asi/164578)

Liquid Screen Design anticipates that its education market sales will remain steady or increase over the course of 2025. “Clients seem more focused on effectiveness rather than slashing budgets,” Huglen says. “By guiding them toward ROI-driven solutions, we’re helping them make smarter, more impactful purchasing decisions – even if they’re being more selective. They want to maintain the same marketing power – just in a more cost-effective way.”

Glasscott notes that a university client has had layoffs in its athletic department, with which she works. While that’s certainly not a great bellwether for business, she says sales with other departments at the university could pick up. “I feel where one department may pull back, another will move forward with larger orders,” balancing things out, Glasscott says.

College Hill believes its business with colleges and universities will continue to decline relative to past performance. Gebauer-Lewis says many university departments are facing budget reductions of 1% to 10%, which is likely to negatively affect their merch spending.

“Given ongoing budget cuts and financial pressures, we expect spending to remain conservative, with universities prioritizing essential expenditures over discretionary purchases,” says Gebauer-Lewis. “Given these constraints, we understand the importance of making their limited budgets stretch further. Our focus is on providing high-quality products with strong perceived value, ensuring that whatever our education clients invest in has a significant impact.”