
Frequently Asked Questions
The University of Oregon faces a significant structural deficit in its Education & General (E&G) fund budget.
This page answers frequently asked questions and reflects current information about our financial outlook, planning process, and priorities.
Last updated June 10, 2025
What’s Driving the Budget Shortfall?
- Q1: What is driving the university’s current budget shortfall?
- Q2: How much will different areas be expected to reduce their budgets?
- Q3. If non-resident new student enrollment will be down, does this mean the university will have fewer students enrolled overall this coming year?
How Will Budget Decisions Be Made?
- Q4: How will decisions about budget reductions be made?
- Q5: What is the timeline? When will we know which positions (or searches) might be impacted?
- Q6. Is there an approximate number of positions that equate to each percentage by which the budget is reduced?
- Q7. Will auxiliaries (i.e., self-sustaining units) need to make cuts also?
- Q8. What are the university-wide tactics being considered for reductions, such as work-share, early-retirement incentive, hiring freezes, etc.?
How Will This Affect Jobs and Pay?
- Q9: Will there be layoffs?
- Q10: Will executives take pay cuts to offset the budget deficit?
- Q11. Will salary increase commitments to faculty, classified staff, OA, and other labor groups be reversed?
How Are We Responding and Communicating?
- Q12: How can I share cost-saving or revenue-generating ideas?
- Q13: How will the university keep the community informed?
- Q14: What efforts are being made in the enrollment space to attract more out-of-state/international students in the future?
- Q15. Will budget reductions affect the implementation of Oregon Rising?
What Else Should We Know?
What’s Driving the Budget Shortfall?
Q1: What is driving the university’s current budget shortfall?
The university faces a $25–30 million structural deficit in its Education and General fund (E&G) budget beginning in the 2025-26 fiscal year (FY26). This shortfall is because expenses are growing more rapidly than revenue. During the 2024-25 fiscal year (FY25), the E&G fund was balanced; revenue was sufficient to cover expenses. Going forward, however, net tuition revenue, which represents almost 80% of all E&G fund revenue, is growing at only 2.5%, while compensation costs, which represent nearly 80% of the E&G fund expenses, are increasing at 7.1%.
Some of the factors contributing to this situation include:
- Non-resident enrollment is falling short of targets, affecting tuition revenue.
- State support is increasing only modestly (2.8%), far below the rate of cost growth.
- Costs tied to compensation and retirement programs continue to rise.
- Reductions in federal funding increasing budgetary issues.
- Federal executive actions have created uncertainty around international student enrollment.
Pre-existing budget challenges in some units compound these issues.
Q2: How much will different areas be expected to reduce their budgets?
At this time, the university anticipates average budget reductions of:
- 4% for administrative units
- 2.5% for schools and colleges
These reductions are in addition to any internal measures already underway in units with pre-existing shortfalls.
Importantly, these are not across-the-board cuts. Reductions will be made strategically and thoughtfully. Some units may see smaller or larger adjustments depending on a range of factors.
We are still in the planning phase, and no decisions have been made about specific budgets. Unit leaders will be engaged throughout the summer to help look at different options.
Q3. If non-resident new student enrollment will be down, does this mean the university will have fewer students enrolled overall this coming year?
Not necessarily. While we are currently projecting a decline in new non-resident student enrollment, which has a significant financial impact due to higher tuition rates, we expect a record number of Oregon resident students to enroll this fall. The final total enrollment figure will depend on “summer melt” (when a student who provides an enrollment deposit doesn’t matriculate in the fall for classes), continuing student retention, and other variables. However, it’s important to note that our budget challenge is not just about headcount; it’s about the balance of revenue associated with different student populations.
How Will Budget Decisions Be Made?
Q4: How will decisions about budget reductions be made?
Budget planning will occur over the summer through close consultation between the president, provost and our academic and administrative leaders. We will explore various options and weigh them carefully against:
- The UO’s long-term goals and strategic plans, specifically Oregon Rising
- Legal and contractual obligations
- Impacts on our academic mission, students, and employees
Final plans will be shaped by a principled approach, prioritizing fiscal responsibility, community well-being, and institutional resilience. We expect to begin implementation by the start of fall term.
Q5: What is the timeline? When will we know which positions (or searches) might be impacted?
We understand that uncertainty about positions and searches is stressful, and we’re committed to providing clarity as soon as possible. Right now, we are still in the planning phase, working closely with academic and administrative leaders across the university to model different budget scenarios and assess impacts at the unit level.
Because each unit’s budget, staffing structure, and needs are different, scenario planning will occur throughout the summer. We expect decisions to be made and communicated sometime in fall term.
Any decisions that affect positions or searches will be made with great care, in accordance with university policy and, when applicable, our collective bargaining agreements. Our goal is to support our students, employees, and extended university community while minimizing disruption to university operations and supporting our employees through whatever changes may come.
Q6. Is there an approximate number of positions that equate to each percentage by which the budget is reduced?
There is no simple formula to translate a budget percentage reduction into a specific number of positions. Budgets vary significantly across units in how funds are allocated. Some areas are more personnel-heavy, while others may have larger non-personnel expenses. In many cases, unit leaders will look at a mix of strategies to meet their targets, which may include reducing operational costs, holding vacant positions open, or restructuring programs. We know people are concerned, and we are working to minimize impacts to positions wherever possible.
Q7. Will auxiliaries (i.e., self-sustaining units) need to make cuts also?
Auxiliary units, such as Housing, Dining, and Athletics, are financially self-sustaining and not directly funded by the E&G (Education & General) budget, where the $25–30 million deficit exists. However, many auxiliaries are already managing their own financial pressures due to changing demand, inflation, and rising labor costs. While they are not subject to the same reduction targets as E&G-funded units, they are actively reviewing their budgets and may make adjustments to maintain long-term sustainability.
Q8. What are the university-wide tactics being considered for reductions, such as work-share, early-retirement incentive, hiring freezes, etc.?
We are taking the summer to develop plans with local academic and administrative leaders regarding the budget cuts. We are not implementing measures such as hiring freezes or travel freezes across the board as they only result in temporary cost savings, and we need to make structural, recurring changes to our budget. Individual units may take actions like this to mitigate individual unit issues.
Workshare is not a solution to our situation. The last time the University used this program, there were pandemic-related Federal funds available to supplement employee payments. Those no longer exist. Additionally, the University is a reimbursing employer, which means we directly pay the state for the cost of unemployment insurance benefits granted to our employees. Under the workshare program, the University also continues to pay for a participating employee’s normal benefits. The combination of these factors means any savings are minimal, and participating employees would experience a greater disruption than the last time the program was administered at the University.
The University is currently assessing other university-wide tactics that could be used to achieve cost savings.
How Will This Affect Jobs and Pay?
Q9: Will there be layoffs?
Given the magnitude of the budget gap ($25 million - $30 million) and the fact that personnel costs make up 79% of the E&G fund expenditures, we anticipate that it will be necessary to reduce positions to balance the budget on a recurring basis.
Any changes will be handled with clarity, compassion, and adherence to labor agreements and policies.
Q10: Will executives take pay cuts to offset the budget deficit?
This is a fair and important question. Executive compensation is based on national benchmarks and is designed to attract and retain leaders with the skills to navigate institutions through complex challenges such as those we are facing now. We do not intend to reduce compensation for any of our employees, including those with negotiated pay increases or announced salary programs.
Q11. Will salary increase commitments to faculty, classified staff, OA, and other labor groups be reversed?
The university intends to honor the commitments it has made regarding salary increases for faculty and officers of administration this October, to classified staff in the existing collective bargaining agreement, and with other labor groups such as GEs and student workers. These increases are part of multi-year agreements and equity efforts.
How Are We Responding and Communicating?
Q12: How can I share cost-saving or revenue-generating ideas?
Ideas are welcome and encouraged. The university will solicit ideas for cost savings and revenue generation via a form that will be available soon. All form submissions will be reviewed by institutional leadership. You may also share ideas specific to your own work area directly with your unit leader or supervisor for consideration.
Q13: How will the university keep the community informed?
We are committed to regular updates. A university-wide town hall was held on June 9, and updates will continue in the fall through school/college/division-specific meetings, public board meetings, and the StrengtheningUO website.
Q14: What efforts are being made in the enrollment space to attract more out-of-state/international students in the future?
Out-of-state and international students are vital to our academic community and crucial to our tuition-driven financial model. Our team in Enrollment Management, including the Office of Admissions, works diligently year-round to recruit an outstanding class from across Oregon, the U.S., and the world. We are actively investing in strategies to enhance recruitment and yield in specific areas, including:
- Targeted recruitment campaigns in key domestic and international markets, informed by data and trends.
- Increased use of financial aid and scholarships to remain competitive in an increasingly cost-sensitive national landscape.
- Strategic partnerships with high schools, counselors, and community-based organizations outside Oregon to build awareness of the UO brand earlier in the student pipeline.
- Evolving and outstanding campus visit and virtual tour experiences that highlight the academic excellence, campus culture, and unique opportunities available at Oregon.
- Closer collaboration between Enrollment Management and University Communications to launch a brand awareness and advertising campaign in key markets across the U.S. in alignment with Enrollment Management’s out-of-state recruitment targets.
We know this is a long-term effort, and we’re committed to doing this work strategically and persistently. The goal is not just to increase headcount, but to attract talented students who will thrive here. Our athletic excellence and membership in the Big Ten Conference are also powerful drivers of national visibility, helping to elevate the University of Oregon’s profile among prospective students across the country and around the world.
Q15. Will budget reductions affect the implementation of Oregon Rising?
Oregon Rising will be a driving force in determining how we navigate this moment. While it won’t be the sole guide for every decision, it offers a shared framework to inform where we invest, what we protect, and how we prioritize. As a tuition-driven university, our future depends on attracting and supporting students. That means we must always be focused on what best serves our students, including timely graduation, career-connected education, and meaningful academic and co-curricular experiences that help build flourishing students. Oregon Rising helps us stay centered on those goals, even as we make difficult choices.
What Else Should We Know?
Q16. Why are we messaging about the deficit now? Has something changed?
We have been discussing long-term financial challenges with senior leadership, in UO Board of Trustees meetings and during labor negotiations over the last few years. However, there are many factors that have been uncertain (e.g., enrollment, state appropriation, and federal actions). The UO is heavily dependent on tuition as a source of revenue, and predicting the size of each year’s incoming class is complex. May 1 is the national deposit deadline for next year’s entering class. Over the last few weeks, both our enrollment picture and likely state appropriation levels have become clearer, which explains the timing of our recent budget messages.
Q17. Why doesn’t the UO Athletics Department provide funds to the university?
The UO Athletics Department is one of only a handful of programs in the U.S. that is self-sufficient, receiving no funding from tuition or any state general funds and, in fact, pays an overhead assessment of over $4 million per year to the university. They also cover the full cost of all scholarships for student athletes. Athletic Department revenues and expenditures equal each other and do not generate a surplus.
Q18. How are we preventing this issue in the future?
Given all of the challenges facing higher education, it is not possible to guarantee that we will avoid budget cuts in the future.However, we are doing everything we can to monitor challenges (e.g., enrollment, federal cuts, state funding levels), invest in revenue-generating activities, and keep a close eye on departmental budgets and expenditures.
Q19. Can we utilize the endowment to help offset the deficit?
The university is fortunate to have wonderful alumni and donors who contribute to the institution’s endowment. Endowments have a specific legal structure and a host of restrictions regarding what they can and cannot be used for. University spending of donor money must be consistent with the donors’ intentions, which are often targeted at specific projects or scholarships for students rather than operating expenses.