In an email to faculty and staff on Tuesday, Northwestern University announced it would implement several cost-cutting measures, including a hiring freeze and budget cuts, due to rising costs and uncertainty at the federal level.
The university faces serious financial pressure following the Trump administration freezing $790 million in federal funding in April. Northwestern has reached a moment where these measures are necessary to ensure the university’s fiscal stability now and “into an uncertain future,” University leadership said in the email.
Pointing to potential federal changes like increased endowment tax, inability to enroll international students and reduction in federal research funding, the university faces “serious financial impacts that must be addressed immediately.”
The cost cutting measures include administrative and academic department budget cuts which Northwestern said “are likely” to include staff reductions, changes to their health insurance program; “modest” changes to the tuition benefit for employees’ dependents and non-personnel budget cuts to the university’s capital expenditures for buildings and systems which could impact service, according to the email.
The news comes at a time when the university has been forced to shell out more than $10 million a week to keep vital research afloat while continuing to pay graduate workers and scientists.
The recently announced cost-cutting measures expand upon the university’s February announcement, which implemented a 10% cut to non-personnel budgets and required review of all personnel actions, including hiring and raises.
“We continue to fight in myriad ways to get our federal funding restored, and to minimize the impact on our community,” Northwestern leadership wrote in the email. “We hope and are reasonably optimistic that these efforts to restore our federal funding will bear fruit, but we have asked our deans and other academic leaders to work with us to plan for a variety of scenarios in case they do not.”
More information is set to be released over the next couple of days and weeks, according to the announcement.
Carole LaBonne, a professor of molecular biosciences at Northwestern, said she fully expected various cost-cutting measures to offset the damage of the federal funding freeze, as administrators have been transparent about recent financial struggles. She did not however expect changes to benefits or non-personnel budget reductions.
“In retrospect, it’s not surprising,” LaBonne told the Tribune Tuesday. “We have been living in existential dread.”
LaBonne also said she understands the decision to pause hiring at the faculty level, but the reality is that it will limit job opportunities for postdocs and researchers, which can have detrimental consequences for the academic community.
“It breaks my heart to agree, because the more universities that end up having to do that, and there are quite a few that are piling up – the fewer jobs that are going to be available for the fantastic post doctoral scholars who are coming up for the job market and are the future of research in this country,” Labonne said. “I have one of those postdocs who’s going to be looking for jobs in the fall, and the jobs are few and far between.”
The federal funding freeze has already gravely impacted early-career scientists at Northwestern. With all of Northwestern’s National Institutes of Health funding frozen, research labs have to limit how many new doctoral students they take in to train, which means fewer students will get the opportunity to study and work at the university’s elite research facilities, LaBonne said.
In an email to the Weinberg College of Arts & Sciences, the college’s dean Adrian Randolph offered a silver lining to Northwestern’s decision not to offer salary increases this year, except to those who have already received a contractual commitment.
“This step, while disappointing, will help us limit other cuts,” Randolph said in the email. “I want to reassure all faculty and staff members that we will include this year’s review of activities and achievements in any future evaluations linked to salary merit increases.”
Randolph also suggested “some very difficult decisions” will need to be made regarding the size of the college’s workforce.
“Vacant positions will, for the most part, remain unfilled. I want to acknowledge the hard work that went into developing faculty hiring plans and, while we cannot act on them now, they will continue to be valuable as we imagine how best to position the College in the coming years,” he said.
Randolph said the goal is to minimize layoffs.
Jackie Stevens, a political science professor at Northwestern University, said she’s particularly concerned about the impact on academic units and criticized school leaders for prioritizing administrative expenses over education.
Stevens cited Northwestern’s $43.5 million settlement with the Department of Justice in 2022 to settle the claim that it drove up the cost of attendance for students on financial aid. The administration could have used those funds – and other funds that have been used in legal fees – to mitigate budget shortfalls, Stevens said.
“I mean this statement is what one would expect of the CEO of Disney and not the president of a nonprofit university with a $14 billion endowment,” Stevens said. “To me, the board and the administration are refusing to invest in the education of the students, but they’ll draw down funds to compensate for their poor management.”
Stevens said she’s hanging on to the part in Schill’s letter that alludes to “reductions in administrative and academic unit permanent budgets.”
“It’s quite alarming and not justifiable,” she said. “They really do need to be prioritizing the academic units. That’s the point of the university.”
University endowment funds typically follow a strict set of long-term guidelines that dictate how assets are used and only a limited amount of the endowment is liquid, LaBonne explained.
“Most of it is directed towards particular donor wishes. You cannot just go into the endowment to do anything you want with it,” she said. “And remember that (Northwestern) is currently covering research to the tune of $40 million a month. There are only two places that can come from – the endowment and borrowing, and I imagine that we’re already doing a bit of both.”