Challenges in Higher Education

13th Avenue on the UO campus in Eugene
A Challenging Economic Forecast for Higher Education
Colleges and universities across the country are facing tough economic headwinds. The University of Oregon is no exception.

Like universities across the nation, the University of Oregon faces significant economic headwinds. These include declining high-school-aged population, competition from other colleges and universities, cost pressures from the federal government and state policy, and under-investment in higher education at the state level. Those challenges are particularly acute in Oregon, where the state’s budget stability has been shaken by the ripple effects of recent federal tax cuts. Economists now project that Oregon could face nearly a $1 billion loss in revenue, threatening already limited higher education funding.

Universities across the country also continue to assess the potential impact of a number of federal actions and executive orders. This includes federally awarded research grants and the entire research infrastructure that supports those grant-awarding entities. Universities across the country stand to lose billions in funding, and the ripple effects are expected to affect both universities and the broader local economies that depend on them. Many of our AAU peers and other universities across the country have already issued financial austerity measures in anticipation of the anticipated loss of revenue. Financial pressures are already reshaping campus life, with many universities cutting academic programs, reducing staff, and limiting student services in order to stay solvent.

 

Budget shortfalls are a national trend

Global management firm McKinsey estimates that 57% of private and 77% of public institutions are facing budget shortfalls across the nation.

The ratings agency Fitch recently came out with a report describing a “deteriorating outlook” for higher education, driven by uneven enrollment, rising competitive pressures, and continued margin pressures. “Sector consolidation is likely to rise in 2025 … Even public institutions, which have long been more insulated from sector pressures, may be forced to consider drastic budgetary decisions to remain sustainable.”

Partial list of Budget Reductions in Higher Education

Below is a partial list of budget reductions in higher education as reported by various news sources. This information was gathered from publicly available sources for comparative purposes and is not comprehensive. Some institutions may have made cuts before or after the timeframe reviewed. This list was published August 26, 2025.

Boston University (BU)

  • Number of Layoffs / Cuts: 120 staff + 120 vacant positions eliminated, 5% budget cut 
  • Programs Cut: PhD students not accepted in humanities and social science programs
  • Media Coverage: Inside Higher Ed , BU Today, Forbes

Brown University

  • Number of Layoffs / Cuts: Cost-cutting underway, layoffs possible (not specified) 
  • Programs Cut: Graduate admissions scaled back; others TBD 
  • Media Coverage: Higher Ed Dive

Cornell University

  • Number of Layoffs / Cuts: Workforce reductions expected in 2026 (exact numbers not yet specified)
  • Programs Cut / Changes: Restructuring planned, including elimination of duplicative decentralized operations
  • Budget Impact: Shift from a $23M operating surplus in 2023 to a $175.5M operating deficit in 2024
  • Media Coverage: Higher Ed Dive

George Washington University (GWU)

  • Number of Layoffs / Cuts: Hiring freeze + reductions likely, not yet quantified 
  • Media Coverage: GW Hatchet

Indiana University, Bloomington

  • Number of Layoffs / Cuts: About 35 faculty took voluntary buyouts
  • Media Coverage: Inside Higher Ed

Michigan State University

  • Number of Layoffs / Cuts: 9% cut over 2 years, including 6% in 2025–26 
  • Media Coverage: Yahoo News — includes positive mention of UO’s town halls and communication process

Northwestern University

  • Number of Layoffs / Cuts: ~425 staff (about half vacant positions)
  • Media Coverage: Inside Higher Ed

Portland State University (PSU)

Southern Oregon University (SOU)

Stanford University

  • Number of Layoffs / Cuts: Staff reductions likely (numbers not yet specified), $140M cut
  • Media Coverage: Stanford Daily

Temple University

  • Number of Layoffs / Cuts: ~50 staff (part of ~190 position reductions)
  • Media Coverage: Higher Ed Dive

University of California, Los Angeles

  • Number of Layoffs / Cuts: 23 layoffs in extension services, academic director contracts not renewed, paused hiring, 10% budget cut in administration, FY24 operating loss of $144.2M
  • Media Coverage: The Daily Bruin, Higher Ed Dive

University of California, Santa Barbara

University of Chicago

  • Number of Layoffs / Cuts:  Hiring freeze in effect. $288 million deficit. Reducing non-personnel spending by 10%.  
  • Programs Cut: 12+ programs. PhD admissions paused or reduced in arts and humanities and social science
  • Media Coverage: Hyde Park Herald, Inside Higher Ed

University of Colorado, Boulder

  • Number of Layoffs / Cuts: 25 researchers
  • Media Coverage: Brightgram

University of Connecticut (UConn)

  • Number of Layoffs / Cuts: Workforce reductions planned, starting with temp staff (numbers TBD)
  • Media Coverage: Higher Ed Dive

University of Kansas (KU)

  • Number of Layoffs / Cuts: Travel reductions and departmental budget cuts to address projected $20M deficit in FY 2026 
  • Programs Cut: Measures aimed at administrative and operating expenses 
  • Media Coverage: Chancellor KU, Lawrence Journal-World

University of Nebraska System

  • Number of Layoffs / Cuts: Voluntary separation packages likely to be offered (number not specified)
  • Programs Cut: Possible program eliminations or mergers under review
  • Media Coverage: Higher Ed Dive

University of North Carolina–Chapel Hill (UNC–CH)

  • Number of Layoffs / Cuts: Job consolidations expected; number not yet specified 
  • Programs Cut: ~$70M (2%) budget reduction; program changes TBD; paused $218M research facility 
  • Media Coverage: News & Observer

University of Southern California (USC)

University of Utah

  • Number of Layoffs / Cuts: Cuts through program eliminations 
  • Programs Cut: 81 programs/certificates/courses cut (largest in Humanities) 
  • Media Coverage: Salt Lake Tribune

  University of Wisconsin—Madison

  • Number of Layoffs / Cuts: 91 Extension employees. Announced cuts of up to 7%.
  • Media Coverage: Wisconsin Public Radio