Amid the ongoing federal funding cuts, policy reversals and the growing anxiety about the Trump administration’s plans for higher education, several major research universities have begun to tighten their budget belts.
In the past week alone, at least four prominent universities — both public and private — have introduced new cutbacks as they try to anticipate how much their bottom line might be harmed by the sea change in higher education policy and research funding taking place at the federal level.
Hiring freezes, spending limits, and more aggressive budget oversight are become the new watchwords at more and more institutions. Here are four examples.
Northwestern University
In a February 12 message to the campus, Northwestern University President Michael Schill, Provost Kathleen Hagerty, and VP/chief financial officer Amanda Distel wrote that the university was taking three immediate measures “to protect Northwestern and to best position the institution amid these myriad challenges.”
- All personnel actions, including hiring, raises, additional payments and related actions will be reviewed centrally to ensure they’re “necessary to the operation of the University and the pursuit of our mission of teaching and research.”
- Current spending will be limited by reducing non-personnel expense budgets by 10%.
- Expenditures or financial commitments greater than $25,000 will require pre-approval by the Vice President and Chief Financial Officer.
The administrators’s message cited constraints on tuition and endowment revenue in addition to increased expenses involving labor contracts and employee benefits as reasons for the actions. But it also pointed to concerns over the recent NIH decision to cap research grant payments and the possibility of increased taxes on its endowment as other justifications.
The memo acknowledged that the budget measures would “impact almost every part of our University in some way. We regret that some of the plans and aspirations of members of our community may be constrained, at least for now. While we are doing all we can to advocate for and protect our community, we feel it is necessary to take these steps until further notice to help ensure Northwestern is best positioned to navigate this period of uncertainty without permanent damage to our operations or mission.”
North Carolina State University
North Carolina State University Executive Vice Chancellor and Provost Warwick Arden sent a February 14 memo to deans and other administrators informing them that he was putting in place a “pause on all hiring activities… including faulty and staff searches” as a result of developments at the federal level.
“Given the uncertain impacts of the presidential administration’s Executive Orders and guidance, the potential shut down of the federal government on March 14, and financial challenges that the state government is dealing with, leadership is becoming increasingly concerned with our budgets over the next year or two,” Arden wrote.
Massachusetts Institute of Technology
Last week the Massachusetts Institute of Technology informed faculty members that it was anticipating a loss of federal funding in excess of $100 million. As a result, according to WGBH news, MIT was placing a freeze on hiring of all non-faculty positions until further notice.
“Faculty will not be impacted by this freeze, and there is a process for exceptions for essential personnel,” said spokesperson Kimberly Allen.
Washington State University
At Washington State University, Provost T. Chris Riley-Tillman announced that the university’s leadership would begin to review the budget “with a focus on scenario planning for near-term futures where reductions are necessary.”
Citing the NIH indirect cost cap and the possibility of reduced state funding, Riley-Tillman said, “our scenarios will encompass a range of possibilities, including potential hiring freezes, travel freezes, carry-forward reductions, and permanent reductions to core funding. All options need to be discussed to ensure WSU’s ability to respond quickly and with agility.”
Promising to “be as transparent as possible,” Riley-Tillman added, “we believe that scenario planning in advance of a time when fiscal realities may require contraction is the best way to engage our community in thinking about choices that may need to be made.”
These four examples are almost certainly just the beginning. Look for many more universities to take similar cost-cutting actions in the weeks ahead. At a minimum they will begin limiting investigators from obligating new expenditures from their NIH grants.
Across the nation, leading research universities are calculating the damage that the NIH cap alone could cause were it to remain in place. (Currently, that cap is being blocked by Federal District Judge Angel Kelley, who issued a nationwide temporary restraining order against it in response to a lawsuit filed by university associations and major research centers.)
At the University of Iowa, the hit would be more than $33 million. For universities and other research organizations in Missouri, the total would be about $100 million. The cumulative losses from the new NIH policy would be more than $300 million for Texas institutions, about $170 million for Ohio universities and research centers, and more than $120 million in Florida. And these figures don’t include funding cuts associated with the dismantling of other federal agencies like the U.S. Agency for International Development.
Higher ed finance expert, Robert Kelchen, head of the Department of Educational Leadership and Policy Studies at the University of Tennessee, wrote in a blog post last week that, given the federal funding costs, he “would be shocked if research universities in particular are not having serious conversations about freezing unnecessary spending.”
Kelchen added that even as universities begin to plan for budget cuts, they’re likely to “stay behind the scenes due to the fear of potential political retribution.” He undoubtedly is correct, but the consequences of those cuts — for the institutions, their students, and the public — won’t stay hidden for long.