Office of the President
June 30, 2025
Tags Community Messages

Financial Steps Responding to Federal Actions

From the President

As we approach the end of the 2025 fiscal year, we feel it is important to provide an update on the deep financial challenges facing the University and to prepare our community for difficult decisions we may have to make in the coming weeks and months. We have done important work as a campus over the past several months to slow expense growth and make strategic decisions about spending. Unfortunately, these measures are not enough to offset the rapid pace of funding losses as Brown navigates federal headwinds.

Our first priority, in this challenging environment, is to protect the University’s mission of education and research, recognizing that the two elements of this mission are inseparable. Across the humanities and social, biological and physical sciences, scholars at Brown have a dual obligation to educate and pursue new paths of discovery. The University's role in advancing this mission means retaining dedicated and talented faculty and staff members; continuing to offer financial aid packages that meet full financial need; and maintaining the infrastructure and services that are essential to our teaching and learning community. In today's shifting funding landscape, advancing our dual mission also means protecting research and discovery across all disciplines by having the capacity to fund as large a portion of high-impact research and scholarship as possible in ways that do not rely on federal grants. 

There is tremendous uncertainty in the political climate for higher education, and a strong plan to protect research and scholarship — and the faculty, students and staff who produce and learn from their participation in this work — is essential if we are to maintain our standing as a leading university for education and research in the liberal arts and sciences. We are developing plans for a range of scenarios. All these scenarios will rely on supporting education and research through the use of debt (backed by the endowment), increasing our focus on current-use philanthropy, and making a concerted effort to identify new non-federal sources of research funding. 

Unfortunately, all these plans also necessarily include significant cost-cutting. We need to take steps beyond the deficit-reduction measures we announced in December 2024 and the staff hiring freeze and limits to non-essential travel and expenses we announced in March 2025. Over the course of the summer, as the financial picture becomes clearer, we expect to announce campus-wide actions in the following areas:

  • Changes to faculty and staff hiring and staff levels
  • Reductions in spending for services and support, including in benefits and other areas of operations
  • Further changes to graduate student admissions
  • Scaling back plans for capital investments

For now, the staff hiring freeze announced in the spring is being extended at least through the end of this summer. Leaving positions vacant should help reduce the number of staffing reductions needed to manage expenses. The savings from this effort come in addition to the salary freeze announced in the spring for members of the President’s Cabinet, who will receive no compensation increases for FY26 (in addition to other highly compensated individuals who volunteered to forgo increases), while each of the three of us will also take a 10% salary cut. In May, we announced an extension of the freeze on non-essential travel through Sept. 1, 2025, and that also remains in place. We will, however, move ahead with the increases in compensation for non-Cabinet staff that were approved by the Corporation of Brown University in February, in accordance with our commitment to ensuring that Brown employees are fairly compensated for their work. 

These difficult choices are being made in consultation with faculty and staff. Throughout the spring, the Provost has led a working group of administrative staff and faculty members that meets twice a week to track and respond to federal actions. The Academic Priorities Committee has been involved in assessing possible cost-cutting measures that affect academic programs, and work teams for Brown's Financial Health Initiative have been focused on several areas of opportunity to drive cost savings and operational efficiencies. In addition, we have formed a new group of senior faculty members that includes representatives from the Faculty Executive Committee, the Academic Priorities Committee, and the University Resources Committee, that will provide advice over the summer on how to prioritize among various possible measures to reduce expenses. 

Threats to Brown’s finances

Multiple federal actions affecting institutions across the country continue to threaten the financial model that supports Brown’s core mission. This has included the termination of research grants across all areas for colleges and universities, from the sciences to the humanities, and threatened reductions in indirect cost recovery rates on federal research grants. In addition, both the House and Senate versions of the budget bill under consideration include significant increases in the tax on university endowment gains, substantial reductions in the budgets of grant-making agencies, reductions in the generosity of Pell awards (which support our lowest-income students), and reductions in the ability of graduate and medical students to obtain federal financial aid. 

Beyond this, Brown and several other institutions are experiencing a large-scale freeze of hundreds of millions of dollars of federal research funding. Since April 3, the government has (with no formal explanation) ceased paying bills on existing Brown grants from the National Institutes of Health (NIH), which represent over 70% of the University's federal research funding. These lost funds total $45 million as of June 30 (the number is increasing by about $3.5 million per week), which is about double Brown's budget for salary increases in the coming year and more than three times our budgeted increase in student financial aid and support in the coming year. In addition, the NIH has made no new grant awards to Brown and issued no routine annual grant renewals.

Currently, the University is fully bridging funding gaps from non-payment of NIH bills and is working closely to support faculty who are experiencing grant cancellations, non-renewals or delays in the issuance of new awards. We are continuing to assess the needs of our research community and will be providing substantial bridging funds to our faculty in FY26. 

The picture becomes more sobering as we brace for the impact of multiple Congressional actions. To give just a few examples, the tax that Brown pays on investment income could result in a loss of tens of millions of dollars of funding per year. Changes to Pell grants, the Federal Work-Study Program and Student Educational Opportunity Grants would result in annual losses of about $8.8 million. And threats to international student enrollment have implications for tens of millions of dollars of the University's budget, even as they heighten anxiety for our international students, faculty and staff. These actions are expected to reduce Brown resources available for financial aid and student support, professorships, academic programs, research, libraries, lectures, student activities and other areas that enable us to fulfill our mission. 

In addition, although we do not know how much federal rates for covering universities' indirect costs will ultimately be reduced, any reduction will have large financial implications for Brown. For example, cutting them in half would reduce our ability to cover our research costs by about $31 million per year.

All these losses represent an ongoing threat to Brown’s financial sustainability and, consequently, our ability to fulfill our mission. We are doing everything possible to minimize the impact, and we are proud of the response of this community in making important changes to operations to reduce expenses over the past year. Unfortunately, the level of savings to date is not enough to counter the deep financial losses Brown is experiencing and must prepare for in the coming year. 

Steps taken by Brown to safeguard funding resources

Brown is addressing the ongoing challenges on many fronts. In addition to working closely with our legal team to implement the best strategy to resolve the NIH funding situation, we continue to appeal the termination of research grants. We also have participated in several legal actions opposing funding cuts, and we will continue considering litigation options when prudent and appropriate. In addition, we are coordinating strategies across government relations, communications and constituency engagement, as well as working in close collaboration with our educational associations and peer institutions on joint advocacy efforts.

We have secured a $300 million term loan to help the University manage its finances and priorities as we plan for a wide range of scenarios, and we are currently assessing other debt options to increase our liquidity even further. The new Research Resilience Fund recently launched by Advancement is helping us build fundraising capacity for donors who want to support research. Brown continues to work closely with the deans to identify research that is at risk of serious disruption — and to examine new grant proposals that federal agencies are not reviewing — to determine how the University can bridge federal funding gaps with Brown sources of financial support. 

As we address the complex issues we are facing, Brown has been and will continue to be unwavering in demonstrating its full compliance with the law. The University has been diligent in participating in multiple government reviews of our compliance related to laws dealing with discrimination and harassment, as well as federal inquiries into our admissions process and processes for determining financial aid. We have consistently and publicly stated Brown's commitment to meeting its legal obligations, as well as our willingness to understand any valid concerns the government may have about the way the University effectively fulfills them. 

Just as important, we have continued to stand by our core values of advancing knowledge and understanding and protecting academic freedom in a diverse, thriving community. In this volatile and uncertain environment, we want to express our gratitude to all members of our community for the work you do to support Brown's mission every day. 

We thank you for your professional commitment, dedication and persistence as we work together to continue our work in service to our students, our communities and the world. 

Sincerely,

Christina H. Paxson, President

Francis J. Doyle III, Provost

Sarah Latham, Executive Vice President for Finance and Administration