Financial Sustainability to Protect and Grow our Mission

Dear faculty and staff,

Over the past few weeks, you’ve heard from us several times about the massive disruptions reshaping higher education and the need for both immediate and long-term changes in how we manage our University budget. In follow-up to the Board‘s approval of the FY26 budget, your leadership will share details on the changes that will result.

This year’s balanced budget reflects a new mindset and strategy to navigate the profound financial challenges facing higher education. Standing still is not an option. We extend continued gratitude for the shared sacrifices that will allow us to navigate the challenges ahead. Protecting our mission-critical activities will require very hard, and in some cases painful changes. These changes are possible because of the strong foundation that all of you have built together.

Like other leading universities around the country, we face challenges to the major sources of support for our teaching, research, and outreach. The State of Minnesota now projects a $7 billion deficit, which threatens not only future appropriations but could also result in mid-year changes to our FY26 funding. At the federal level, we are affected by a range of forces, including canceled research grants, cuts in indirect cost reimbursements, barriers to international student enrollment, and proposed changes that impact Pell grants and student loans. All of this is made more difficult by a high level of uncertainty. This means we need enough flexibility in our budget to respond to developments, while still investing in our people, infrastructure, and priorities that emerge as part of our strategic plan.

Amidst all of these stressors, we recognize and remain firmly committed to you, our faculty and staff, who are the core of our excellence and essential to everything we do. We have also been moved by calls from the University senate and our faculty and staff who have felt the impacts of soaring inflation. In response to those calls, while other institutions have cut or frozen salaries and benefits, we made the important decision to invest in our people by allocating a significant pool for salary increases.

The shifting challenges we face are profound, and we haven’t yet solved the puzzle. Together, we move forward with both caution and confidence. We are optimistic about the future because we know the University will emerge with even greater agility, prioritization, and ability to lead and to serve Minnesota, our nation, and the world.

The University of Minnesota regularly takes on the biggest issues of our society and offers solutions that transform the world. We will turn that energy inward to find the right actions to meet this moment of unprecedented challenge with an even greater sense of purpose and optimism for the future.

In partnership,

Rebecca Cunningham
President

Gregg Goldman
Executive Vice President for Finance and Operations and CFO