Navigating Financial Headwinds

Dear faculty and staff,

We face unprecedented challenges across higher education. The University of Minnesota—our university—is not immune to those challenges.

The challenges are multiple and complex.

Funding from the State of Minnesota is uncertain and historically trending downward.

We have experienced significant cuts in federal research funding, and there is ongoing uncertainty in the future of federal funding and international student enrollment. Inside the University, some have seen their employment end as a result of cuts in federal funding. Further, some key areas that determine our long-term success have been historically underinvested in.

Our best response to meeting these challenges is continuing to come together in support of the University of Minnesota's mission. We must do so with a focus on financial sustainability and strategic investment.

Thank you for your commitment, hard work and partnership throughout the academic year to ensure that the University continues to serve our students, our state, the nation and world.

Thank you to the academic leaders, chancellors and their impacted units and communities who have answered the call this winter to take steps to limit expenses and manage the budget, making difficult decisions on program and scope reductions to meet current budget needs. It is inevitable that the difficult, yet necessary decisions made by deans and unit leaders to balance their budgets will further reduce our workforce over the coming year.

There’s more work to do. Now, more than ever, it’s essential that we double down on our efforts to ensure the University maintains its financial sustainability. Late next week, we will present the Board of Regents with our recommendations for a FY’26 budget. The recommendations acknowledge the very real challenges we face today, while positioning the University for future excellence and to best support you and your work.

Maintaining the status quo is not an option. To ensure the University is on a path to short- and long-term financial sustainability, our response to this historic time will continue to be multifaceted.

We need to remain diligent in efforts to limit expenses and be thoughtful in formulating new strategies that prioritize our core mission, and assess our assets to best position our institution for success.

Advancing our mission in this climate will mean making thoughtful, targeted investments to best serve our students. Supporting our workforce is essential. Over the years, our salary increases have not kept pace with inflation. In early May, the Office of Human Resources shared its recommendation for a three percent merit pool increase that will be included in the FY’26 budget recommendation to the Board of Regents. How this merit pool is distributed will be decided by each campus, college, or administrative unit. Further, we recognize the financial sustainability measures we’re taking will, over time, mean a smaller University workforce. We remain strongly committed to supporting our people as they carry out our daily mission.

We must also take proactive steps to build a shared philosophy and protocol relative to hiring of new faculty and staff across the University. We will continue to hire some new faculty and staff, but with renewed prioritization in areas of key mission and strategic focus. We will share more details on this hiring protocol in the coming weeks.

At the same time, we will have to be even more focused on growing new revenue streams. The University of Minnesota Foundation is identifying broad-based and targeted philanthropic strategies to raise funds to help bridge funding gaps for critical initiatives and support our faculty facing abrupt fiscal challenges. We will continue to seek out external partners with common research goals.

While we are strongly committed to keeping a University of Minnesota education affordable, including efforts to minimize student debt, we should expect that in this environment, tuition will increase next year. We will continue to prioritize financial aid and scholarships to students and families with the greatest need as we remain focused on providing an affordable, accessible world-class education.

For nearly a thousand years, universities have brought together scholars and teachers to challenge assumptions, exchange ideas, and share knowledge with the world. The University of Minnesota has thrived for 170 years. We are here for the long run and with a laser focus on innovation in advancing our core mission, we will emerge from these challenging times stronger.

With your continued dedication and partnership, we will continue to grow in excellence, serving Minnesota, our nation and the world for many generations to come.

Sincerely,

Rebecca Cunningham
President