Dive Brief:

• The University of Connecticut is expanding some budget measures as it looks to close an estimated $29.2 million fiscal 2027 deficit across its main and regional campuses, and another $54.3 million gap at its healthcare center, the public institution said last week. 
• UConn plans to use unrestricted funds to fill in fiscal gaps in addition to limiting hiring of nonessential positions and streamlining operations “where appropriate,” among other moves.
• At the same time, the university said in a news post that it will hold tuition flat and increase institutional aid for students while renovating some of its buildings. UConn’s board approved a $1.9 billion budget for its academic campuses last Wednesday.

Dive Insight:

This time last year, UConn was facing an even larger budget shortfall to the tune of $134 million across the entire system — roughly $50 million more than the combined fiscal 2027 gap. It addressed that hole last year in part by reducing its workforce through slowed hiring and combing through its temporary positions. 

Last week, the university pointed to persistent budget pressures from “inflationary pressures, rising operating costs, federal research grant reductions, and other factors.” — hence UConn’s continued budget austerity measures that began last year. 

Along with hiring restrictions and operations changes, it plans to adjust some contracts to save costs. 

Additionally, the university is looking to grow its revenue, including by focusing on student retention to boost tuition intake, and by expanding sports sponsorships. 

At the same time, UConn’s board stuck to its commitment to keep tuition flat, a plan it passed late last year. Moreover, the university's new budget includes nearly $229.9 million in institution-funded student aid, a 5.4% increase from the current fiscal year. About four-fifths of UConn’s first-time, full-time undergraduate students receive institutional aid or scholarships, according to the latest federal data.

Adding to the fiscal pressure on UConn is state support comprising a shrinking share of the university’s revenue. Across the university's academic campuses, 28% of its revenue came from state support a decade ago, compared to 14% in the upcoming fiscal year. 

However, Connecticut legislators promised UConn and its health system an extra $35 million outside of its state block grant to make up for federal research cuts enacted since President Donald Trump and Republicans gained control of Congress.

That money is just a fraction of what the university estimates it has lost since the Trump administration took over. Last June, UConn said in a news post it faced “$95 million in reduced, slowed, and terminated federal research awards” under federal policies enacted since January. “There are no indicators that the funding will rebound in the near future,” it added.

Despite the austerity measures, the university is also making investments through its renovation campaign, which is largely financed through state-issued bonds and user fees. Projects include renovations of a sports pavilion and science facility complex. For the 2027 fiscal year, UConn’s capital budget is $475 million, per the plan approved last week.

The combination of rising costs, destabilized federal research support and state funding shortfalls has caused financial pain across many public universities nationwide. 

Among them, Ohio’s Kent State University, Maryland’s Bowie State University and Colorado State University have all recently announced layoffs as they cope with budget woes.