The Case Against R2/D2
(Unless You're Moving Up or Down)
So... I think I'm developing a theory.
And like most of my theories, it's less "fully-formed argument" and more "huh, this feels true - help me test it."
Here it is…
No university should settle into being R2 for research or D2 for athletics.
If you're R2 (high research activity) or Division II (D2) today, you should either be:
Aggressively investing to move up to R1/D1 or
Strategically shifting down to R3*/D3
(*Note: There actually isn’t an R3, so in this case “R3” just refers to institutions that aren’t R1 or R2)
Otherwise? You're stuck in a very expensive, very awkward middle.
The "Squeezed Middle" Problem
Here's how I see it…
R1/D1 schools get the glory - the NIH grants, the elite researchers, the ESPN coverage, the March Madness runs.
R3/D3 schools get the community - small classes, teaching-first missions, low-overhead athletics that actually fit the student experience.
R2/D2 schools? They pay a lot of the costs... without a lot of the upside.
At least that’s the early thesis. But what does the data say?
Data Check: Athletics
While there are a myriad of factors at play, it’s interesting to see that D2 institutions are experiencing the sharpest declines in enrollment over the past ten years; with D2 enrollment declining 8.75% compared to D3’s 5.79%.
In addition to enrollment declines, D2 athletics programs have also experienced significant financial challenges over the past decade, both in terms of operating losses and rate of decline. And while D1 programs still incur the highest absolute loss, D2 institutions appear to have experienced the most significant relative increase in financial deficits.
Over a 10-year period from 2013 to 2022, D2 schools without football experienced a 31% growth in generated revenue, but a 61% increase in total expenses. Consequently, the median negative net revenue grew from $3.7 million in 2013 to over $6.1 million in 2022, representing a 66% increase in net losses.
And while D3 programs don’t offer student scholarships, D2 programs do offer partial athletic scholarships, which come with compliance overhead and recruiting obligations; all while not coming away with the media revenue that top D1 programs benefit from.
Data Check: Research
R1 universities dominate federal research funding - and the gap isn’t subtle.
75% of all federal research funding - as of 2022 - went to R1 institutions. To qualify as R1, institutions need 10 times the research spend of R2s (at least $50 million vs. $5 million annually), but only about 3 times the number of doctoral graduates (70 vs. 20). That means R2s carry a significant portion of the academic infrastructure burden without anywhere near the funding firepower.Public awareness of "R2" schools? While students and families seek out "research universities," in my own experience, I’ve observed that R2 is only a value prop when you're competing against schools without any research classification at all. Against R1? There’s no clear benefit at all.
So if the brand premium isn't there - and the financial engine isn't either - why are we paying the freight?
Why the Middle Hurts You
Brand Confusion: Students want elite research - or personalized teaching. "Pretty good at research" isn't a sell.
Cost Structure: Scholarships. Travel. Compliance. Research infrastructure. You’re paying serious money to play in leagues that don’t come with the exposure of a leading D1 division.
Mission Drift: Institutions try to be all things to all people. It muddles identity. It confuses recruitment. It hurts fundraising. Is R2/D2 actually where we want to be, or is it where we’ve settled in an effort to appease all parties?
When R2/D2 Might Make Sense…
There’s a couple obvious arguments I see for R2/D2 status…
You're on your way to R1/D1 and building toward critical mass.
You're a regional monopoly - the best or only game in town - and it’s candidly all you need.
You have a niche specialization that commands national attention despite your classification.
But even then, it's a tough road…
Where I Might Be Wrong
Maybe "good enough" is actually good enough for some institutions to grow?
Maybe the prestige gap between R1 and R2 isn't as visible to 17-year-olds as it is to me?
Maybe some institutions can pull off the middle model sustainably with smart management?
Maybe I’m overestimating the cost burden associated with R2/D2 status?
A lot of my emerging argument is an economic one; essentially posing the question:
Do the costs associated with maintaining R2/D2 statuses outweigh the benefits that come from being distinctly R2/D2?
The benefits from a recruitment and brand perspective feel more clear to me at an R1 or D1 level; and I’ve seen many successful institutions embrace D3 and recruit just fine without an R1 or R2 distinction.
So it begs the question:
Does being R2 and/or D2 provide an institution a competitive advantage when it comes to recruitment? If it does, is it worth the cost to maintain it?
Closing Thought: Pick a Lane.
Purely from a growth perspective - whether we’re talking enrollment or brand - I’d argue that if you’re R2 and/or D2 today, you’ve got two options:
🔼 Invest significantly to move up, or
🔽 Recenter your mission and move down with intention
Because sitting in the middle means shouldering the costs of ambition without reaping the rewards of prestige or the efficiency of restraint.
And the longer I watch this space, the more I wonder:
How many schools are stuck in the middle not by design - but because no one wants to have the hard conversation about moving down?
- Seth
About The Author
Seth is the founder and CEO of Kanahoma, a San Diego-based performance marketing agency on a mission to build a better agency for organizations building a better world.
You can learn more about who we are and what we do at www.Kanahoma.com.