Dive Brief:
- The University of Nebraska-Lincoln plans to cut its budget by $5 million for the current fiscal year and extend its hiring freeze.
- In a Tuesday announcement, Chancellor Rodney Bennett cited uncertainty around the future of federal and state funding. The public land-grant institution may further eliminate another $10 million to $20 million from its budget in the next fiscal year, he said.
- The flagship institution, along with the entire University of Nebraska System, has faced structural budget deficits in recent years, spurred by the common higher ed refrain of declining enrollment and rising costs. Tuesday’s news comes after UNL announced two rounds of cuts in as many years — $12 million in January 2024 and $10.8 million in June 2023.
Dive Insight:
Bennett blamed the structural deficit on rising costs, declining net tuition revenue and potential decreases in state support.
On Tuesday, the chancellor laid out four areas the university’s leadership is focused on to address these challenges: growing enrollment, engaging donors, increasing state funding and convincing the federal government of the “full value” of its research.
UNL has made some progress with enrollment growth. In fall 2024, the university enrolled just under 24,000 students, up from 23,600 the year prior. UNL was the only university in the system that saw enrollment growth this fall. Still, the institution’s enrollment remains below the 25,390 students it had in fall 2019, just prior to the pandemic.
And the recent destabilization of federal funds poses an additional challenge to the university’s economic future.
Following President Donald Trump’s executive orders attempting to cut diversity, equity and inclusion efforts in the government and elsewhere, the U.S. Department of Education eliminated funding for UNL’s Project RAÍCES, a program designed to address the state’s teacher shortage and train future educators from diverse backgrounds.
More than 70 students in the program have lost access to scholarships and other resources, according to Nebraska Public Media. One student told The Daily Nebraskakan, the university’s student-led newspaper, that he had lost a full-ride scholarship and would be unable to continue his education.
The Education Department also issued guidance last month barring colleges from weighing race in any decision-making. The agency appeared to ease some of the strictest aspects of guidance last week. But it’s still facing lawsuits over the letter brought by two educators unions.
The Trump administration has also attempted to slash funding from the National Institutes of Health by capping the agency’s reimbursement rate for indirect research costs at 15%. A federal judge temporarily blocked enforcement of the policy in February before issuing an injunction against it on Wednesday.
But the uncertainty and chaos around federal funding has already prompted some colleges, like UNL, to tighten their budgets.
“We are closely working with our partners in Washington D.C. to fully understand and plan for proposed changes at the federal level,” Bennett said Tuesday.
The university is also facing budgetary challenges from state lawmakers less than a mile down the road in the state capital. Republican Gov. Jim Pillen has proposed a 2% cut, equaling $14.3 million, from the University of Nebraska System for the 2025-2027 budget.
The university’s DEI efforts are likewise under inspection at the state level.
The Nebraska Senate’s education committee is weighing a bill that would ban the state’s public colleges from having DEI offices or programs.
In response, Bennett said in January the university would work to continue to foster an inclusive environment, even if the legislation passed.
“Every person at UNL — every student, every faculty member, every staff member — matters,” he said shortly after the bill’s introduction. “Regardless of the outcome of this legislative proposal, we will remain committed to your success.”
