To the University of Oregon community,
I am sharing some important news today.
Last year, we took the painful but necessary step of implementing nearly $30 million in budget cuts across our university. As we discussed then, roughly 80 percent of our Education & General Fund budget comes from tuition revenue. Of that, the biggest contributor is tuition paid by out-of-state students and families, which means a gap in our out-of-state enrollment has a disproportionate effect on our operations.
May brought the first information about next year’s enrollment numbers as admitted students submitted deposits to attend the UO. With these now in hand, we project significantly lower incoming out-of-state first-year enrollment and, as a result, lower tuition revenue. There are many causes, including demographic shifts; the political environment that affects international enrollments; increased competition from peer- and near-peer institutions; declining trust in all public institutions, including higher education; and the effects of economic uncertainty on families. These dynamics are not affecting just the University of Oregon: they represent a changing reality across higher education.
Based on our new numbers, we will need to cut around $65 million from our budget to avoid an ongoing annual budget deficit in the coming years.
I believe we are now at a crossroads. We could take smaller steps matching short-run expenses with revenues. But with smaller actions, we would have little confidence that we would not have to make another round of cuts next year. The university community has gone through budget cuts multiple times in recent years. That is a dynamic that produces a great deal of pain while failing to produce clear, long-term solutions to address root causes.
This is the moment to take a different path.
We need to take this opportunity to refocus the UO on how to deliver on our mission differently and put us on a path to be a stronger, more competitive, and more resilient university. To do that, we will need resources and time to consider different ways to support our teaching, elevate our research, and make good on our promise to give students an outstanding undergraduate and graduate experience.
I am putting forward two principles which will guide our decisions, and which I believe will set the University of Oregon on a path to meet this moment and to secure a more promising future.
- We will elevate and invest in research strengths that can meet the needs of our communities and industry, attract the best talent, and differentiate this university. We will hire strategically, with a view to make the UO known for leadership and excellence in specific areas of research.
- We will invest in the quality of the student experience and make the University of Oregon a destination of choice for more students.
Over the next six months, we will work with the University Senate, along with other key university partners, and will make no final decisions over the summer. We will explore academic and administrative approaches that allow us to be nimble, disciplined, and focused on strengths. We will also have opportunities in the upcoming capital campaign to seek philanthropic support for these principles and to enlist our donor community in helping us succeed.
To conserve resources while we do this planning, I am instituting a hiring and pay action freeze, effective immediately, as well as limits to non-essential travel. We will move forward with the September pay increases for faculty and staff to which we have already committed. More details will be coming from Human Resources in the next few days.
To keep the UO community apprised of our progress, I will provide updates in mid-summer, mid-fall and toward the end of fall term.
As we approach our 150th anniversary, we must create a strong future to honor the generations of students, faculty and staff who have pursued knowledge and built community at the University of Oregon. The work ahead will not be easy, but it is the work to which I am committed. I am confident in the creativity, resolve, and resourcefulness of this community and how we will meet this moment.
Sincerely,
Karl Scholz
President