College officials across the nation are instituting hiring freezes and spending cuts in response to President Trump’s widespread attacks on higher education, hoping to stave off even more drastic measures down the road, such as layoffs.
The budget cuts being implemented now could mean more overworked staff and larger class sizes this fall.
Many colleges were already facing financial pressures due to declining enrollment and increased skepticism about the value of a college degree. The Trump administration’s moves in recent weeks have threatened even the most elite institutions, including Ivy League universities and state flagships, which had previously been left largely unscathed. The Johns Hopkins University, for example, announced it would lay off more than 2,200 workers and furlough more than 100 others after losing more than $800 million in grants from the U.S. Agency for International Development (USAID). Over the past couple of weeks, the University of Washington, Harvard University, the University of Pennsylvania, Brown University, Princeton University, and the University of California system announced they are limiting faculty or staff hiring.
College leaders have watched anxiously as the federal government has cut or threatened their funding through a variety of avenues — including a proposed cap on indirect costs for grants from the National Institutes of Health, slashing funding to USAID, and targeting diversity, equity, and inclusion programs — although many of the measures are being challenged in court. The U.S. Department of Education’s Office for Civil Rights has opened investigations into more than 50 colleges for potential racial discrimination and 60 colleges for antisemitic discrimination and harassment.
Campus officials fear those investigations could lead the federal government to cut funding, as with Columbia University, where the administration announced it would cancel $400 million in grants over allegations the university allowed Jewish students to be harassed. (Columbia officials announced last week the university would largely comply with the federal government’s demands.) Similarly, the federal government paused and then unpaused $100 million in funding to the University of Maine over transgender athletes and threatened $175 million in funding to the University of Pennsylvania over the same issue.
Even before the government threatened to pull the $175 million, Penn had announced a freeze on most staff hiring and mid-year raises for staff, restrictions on faculty hiring, and a review of capital spending, citing the proposed cap on indirect costs for NIH grants and possible changes to federal student loans and the endowment tax as things that could significantly reduce the university’s operating budget.
“Although the extent and final impact of these policies will not be known for several months, the direction is clear, and we are already experiencing reduced funding,” Penn’s John L. Jackson Jr., provost, and Craig R. Carnaroli, senior executive vice president, wrote in a message to the community.
A possible increase in the endowment tax would affect the wealthiest colleges, while changes to financial aid, or a national recession, could cause more widespread damage. Some colleges are also facing threats to state funding.
“In this time of crisis, conservatively, a chief financial officer has to prepare for the worst,” said Dean O. Smith, a former administrator at institutions including the University of Alabama at Huntsville and the University of Hawaii. “That’s in their genes.”
In addition to hiring freezes (and their less-restrictive cousins, hiring pauses and chills); tighter reins on discretionary spending, such as travel; and delaying capital projects, colleges might dip into reserve funds or refinance loans to free up cash, Smith said. Several institutions, including the University of Wisconsin at Madison, Iowa State University, and the University of Massachusetts Chan Medical School, have also reduced or even rescinded graduate-school-admissions offers.
Lee M. Smith, managing director of strategy and operations at Huron Consulting Group, said that Research-1, or R1, universities have redirected strategic funds toward more-immediate needs. Another strategy, Smith said, is to shop for better deals on items such as photocopiers and laptops.
On the revenue side, Smith said, larger institutions, including R1 universities and a number of flagship universities, are considering admitting more first-year students this fall because college leaders “understand that if some of the financial predictions for their campuses come true … expense reduction in and of itself is not going to fully close any budget gap that they have.”
Smith is advising college leaders not to wait on the sidelines to see exactly what the financial impacts are — the federal directives that have been announced have been fairly clear and consistent over time, he said. “You may not know exactly to the penny how your campus is going to be impacted, but you have a fairly good idea of what types of programs, what types of revenues are going to be impacted, and you have enough information to move forward with some due diligence and plan accordingly.”
Robert Kelchen, a professor and head of the department of educational leadership and policy studies at the University of Tennessee at Knoxville, who predicted widespread budget freezes across higher education a month ago, said the financial uncertainties facing higher education now remind him of the early days of the Covid pandemic. But this time around, so many college leaders have now lived through another once-in-a-lifetime crisis that they have “a little bit more of a playbook” on what to do.
While the federal government’s $76 billion in emergency aid to higher education from 2020 to 2022 helped colleges get through the Covid financial crisis, research universities may be facing an even more significant financial threat this time around, Kelchen said.
And while colleges leaders are focused on safeguarding the long-term viability of their institutions, the hiring freezes are unwelcome news for faculty members and staff who already feel overworked. At the University of Pittsburgh, for example, which announced a faculty and staff hiring freeze at least through the end of the current fiscal year, about 6,000 staff members formed a union last fall in part over concerns about chronic understaffing and job creep, according to Jennifer Goeckeler-Fried, the staff union’s bargaining-committee chair and a lab manager at the university.
Goeckeler-Fried said many people are already doing the jobs of multiple people, because it often takes a long time to refill positions after employees leave. With a hiring freeze, she said, things will get even worse. “I think it’s going to be devastating,” Goeckeler-Fried said. “People are already panicking.”
The union started negotiating for the staff members’ first contract in January, Goeckeler-Fried said, and wanted to ensure that people receive overtime if they are asked — and agree — to work extra hours. But the financial uncertainty hanging over the university will make it a lot harder for the staff to reach an agreement with the university on their first contract, she said.
In the meantime, employees are struggling to move forward with their lives. “People can’t make decisions,” Goeckeler-Fried said. “People can’t buy houses. They don’t want to buy new vehicles. They’re struggling to figure out how they’re going to pay the bills if something happens to their job.”
