Nick began his career with Nottingham Trent University in the UK working in international student recruitment, before going on to a wide range of leadership and consultancy roles in the private sector. He joined The PIE in 2021 and is a key commentator on the current trends in the global higher education industry. He curates content for our PIE Live conferences and is the co-host of the Tales from the Departure Lounge podcast. Get in touch with Nick at [email protected]
This week on the podcast we examine how Budget 2025 reshapes the university funding model – from the international levy and modest new maintenance grants, to confirmed tuition fee uplifts and changes to pension tax arrangements that will affect institutional costs.
We discuss what the package tells us about the government’s approach to public finances, the politics of international recruitment, and the sustainability of cross-subsidy in a tight fiscal environment for higher education.
Plus we discuss research and innovation announcements and get across debate in Holyrood on the Tertiary Education and Training (Funding and Governance) (Scotland) Bill.
With Ken Sloan, Vice-Chancellor and CEO at Harper Adams University, Debbie McVitty, Editor at Wonkhe, David Kernohan, Deputy Editor at Wonkhe and presented by Jim Dickinson, Associate Editor at Wonkhe.
Budget 2025 for universities and students
Universities now need to be much clearer about the total cost of a course
Student finance changes in the budget – Director’s cut
Reclassification ghosts and jam tomorrow at stage 2 of Scotland’s tertiary bill
A government running out of road still sets the economic weather for higher education
A change in approach means research may never be the same again
You can subscribe to the podcast on Apple Podcasts, YouTube Music, Spotify, Acast, Amazon Music, Deezer, RadioPublic, Podchaser, Castbox, Player FM, Stitcher, TuneIn, Luminary or via your favourite app with the RSS feed.
There’s not generally a lot for higher education in the chancellor of the exchequer’s annual budget statement – but this year marks an exception.
We were expecting further details of two policies first announced earlier this year – a levy on international student fee income, and the promised return of maintenance grants for students from deprived backgrounds studying priority subjects.
Though the return of grants (even in a very limited form) was welcomed by students and the sector, the levy has been the focus of sustained lobbying from providers struggling to balance their books with the one area of income that has sustainably grown over recent years.
The budget also provides a few other unwelcome surprises – thresholds and interest rates have been frozen for plan 2 loan repayments (those made by the majority of recent graduates) until 2029-30, meaning that graduates will pay more. A tweak to pension salary sacrifices may make it even more expensive for some providers to employ staff. And the looming threat of a mammoth schools SEND debt being covered by departmental expenditure means that every area of education spending is likely to face pressure from 2027-28.
But it is the fee uplift for the next two years that is likely to get most attention.
The higher rate for tuition fee loan caps will rise, as announced, in both of the next two academic years – to £9,790 a year in 2026-27 and up to £10,050 for 2027-28, with other statutory caps (including for classroom-based foundation years) rising in lockstep. These are expected to be the final two rises that apply to all providers – primary legislation will be laid that means future fee cap rises will be linked to the Office for Students’ revised teaching excellence framework.
It should also be noted that these are per year amounts, not the per credit amounts that the (as-yet unenacted) Lifelong Learning (Higher Education Fee Limits) Act allows the government to set – this is interesting as the entire funding system is due to move to a per credit basis (to allow for the Lifelong Learning Entitlement’s modular approach to study) from 2026.
While this decision has been widely trailed by the minister as evidence of her department addressing the financial problems faced by universities, it should be noted that both increases are (as usual) by OBR projections of interest rates which may differ from the actual interest rates. The rise of what is widely seen as the default tuition fee to north of £10,000 in 2027-28 is likely to trigger widespread commentary – if you believe the stories from the coalition years the original £9,000 figure was chosen precisely to avoid being above what was seen as a psychologically important £10,000 sticker price.
Here’s how that breaks down for all of the common fee caps:
| Fee caps | 2025-26 | 2026-27 | 2027-28 |
|---|---|---|---|
| With TEF and APP (FT) | £9,535 | £9,790 | £10,050 |
| With TEF and APP (PT) | £7,145 | £7,335 | £7,530 |
| With TEF and APP (Accel) | £11,440 | £11,750 | £12,060 |
| With APP only (FT) | £9,275 | £9,525 | £9,780 |
| With TEF only (FT | £6,355 | £6,525 | £6,695 |
| With neither TEF nor APP (FT) | £6,185 | £6,350 | £6,520 |
We were expecting details of the international fee levy first announced in the immigration white paper – and these arrived via a consultation with a closing date of 18 February 2026.
The proposal is that from August 2028, the levy on international student fee income has been set at a flat rate of £925 per student (rising by inflation in following years), with the first 220 students entirely exempt. It is estimated that this will generate around £445m in 2028-29, equivalent to around 4.5 per cent of total international fee income across the sector. However DfE estimates that the sector would lose £270m for that year (equivalent to around 3 per cent of international fee income), suggesting that more than half of the cost of the levy would be passed on to students, given that the same estimates suggest 14,000 less students would come to the UK to study in that year.
Importantly, “international students” are defined as those who are registered for study during the year in question (excepting those who leave during the contractually protected first two weeks of study). Transnational provision, and provision at further education colleges below level 3, will not be in scope. And the system will be run by the Office for Students – there’s even an option to pay the levy quarterly by direct debit.
The impact analysis notes that the levy will – unsurprisingly – reduce the ability of the sector to cross subsidise domestic teaching or research from international fee, but we are reminded that this is before accounting for any reinvestment of the levy in the sector, and before accounting for the rise in domestic tuition fees (though as fee rises are linked, nominally at least, to inflation that last one is a little disingenuous.
The effect of a flat fee, as opposed to the blanket 6 per cent of international fee income levy first proposed in the annex to the immigration white paper, is to decrease the impact on providers who are able to charge higher fees per student. The “free” 220 students will keep many smaller specialist providers out of the levy entirely, meaning that proportionally more costs will fall on providers who attract large numbers of international students with lower fees.
While the University of Suffolk will lose nearly 14 per cent of international fee income to the levy(on 750 students) and the University of Huddersfield will lose 9.3 per cent, the University of Cambridge will lose just 2.69 per cent (on 7,315 students). The practical impact of the proposal will be that providers that are more likely to be drawing substantial parts of their operating income from international fees (and those more likely to be enrolling students with disadvantaged backgrounds) will be hit hardest. The charts in this article will help you compare this outcome with proportional models like the initial 6 per cent proposal.
We are not given a rationale for this change of approach, but it is fair to assume an active policy decision – to minimise the impact on those that make the most from international fees – based on soft power and international standing. It is a form of specialisation, perhaps.
Pretty much confirming that the policy on maintenance loans was back-of-a-fag-packet for Conference stuff, the documents collectively hide how much of the levy will be spent on the new maintenance grants. What we do know is that they’re coming in 2028-29, will be available to both new students and those already studying, and will be paid on top of maintenance loans.
The amounts will be means-tested – students from households earning at or below £25,000 will get the maximum (£1,000 in years one and two, £750 from year three onwards), tapering to £500/£375 for those with household incomes up to £30,000. The higher amounts in early years are designed to help with “access and initial progression”, but in reality it’s a cliff edge that hits students from care-experienced backgrounds particularly hard.
That doesn’t give us a total – grants will only be available for certain subjects aligned with the government’s economic priorities and Industrial Strategy. How many students there are left on a residual household income of 25k or less by 2018 is also not outlined. The eligible subject list hasn’t been confirmed – it’ll be informed by Skills England’s work on skills needs and may align with LLE priority funding categories. And students will need to be studying at least 120 credits per year (or full-time under current arrangements) to be eligible.
As (maximum) UG fees rise by projected inflation, so does maximum maintenance (and the PG loan schemes) by the OBR projection for Q1 2027 of 2.7 per cent. Of course the OBR has been wrong before, and may be wrong again – this year’s 3.1 per cent increase (based on Q1 2026) now shows up as 4.1 per cent in revised OBR forecasts, an error that nobody goes on to fix and so compounds in its impact over time.
In addition, there’s no sign of that parental (residual household) income threshold for parents chipping in changing either – and now that the minimum wage is firmly over £25,000, will almost certainly mean a collapse off a cliff in the number of students able to access the maximum. This year DfE’s own estimates reckon that a maximum loan increase of 3.1 per cent will only result in an average loan increase of 2.6 per cent – expect (much) more of that by the end of the Parliament.
While we’re on parental contributions, buried in the documents is another nasty sting. Right now, if you have two kids at university at the same time, the system recognises that your money has to stretch, and works out a “parental contribution” based on your household income, then splits that between the two students. So if the calculation says “this family can afford to put in £2,000”, and you have two undergrads, the system assumes roughly £1,000 per child – and each student’s maintenance loan is a bit higher to reflect that you are not magically doubling your contribution.
It turns out that the LLE change will mean the SLC stops doing that split for people on the new LLE-style maintenance – each young person’s maintenance will be worked out on the household income as if they were the only one studying. So using the same example, the system would effectively assume you can contribute £2,000 to Child A and £2,000 to Child B. It’s “simpler” because in a modular, on-off, part-time LLE world the SLC will no longer have to track who else in the family is studying and constantly recalculate the split.
But for a “traditional” family with two young full-time undergrads at the same time, it quietly removes a small protection you currently get when more than one child is in higher education.
You might remember, back in the Summer of 2023, when Bridget Phillipson was touring the studios to declare that graduates will pay less under a Labour government:
Reworking the present system gives scope for a month-on-month tax cut for graduates, putting money back in people’s pockets when they most need it. For young graduates this will give them breathing space at the start of their working lives and as they bring up families. This is a choice that the Tories could be making now to deliver a better, fairer system for our graduates and for our universities…. Labour will not be increasing government spending on this.
There was never a detailed explanation of how that magic trick would be pulled off – although it was likely to have been based on London Economics’ stepped repayment modelling, which depended in part on the reintroduction of real interest rates post-graduation (between 0 per cent and 2 per cent) for graduates with earnings between £27,571 and £57,570.
Either way – at least for Plan 2 borrowers – the budget very much breaks that pledge. For anyone who started a degree between 2012 and 2022, the repayment threshold will be frozen at £29,385 in cash terms for three years from April 2027. Instead of that threshold rising with prices or earnings, it just sits there while wages (hopefully) go up – which means more graduates crossing the line into repayment sooner, and those already repaying handing over a bigger slice of their real income than they would have done otherwise.
It’s very much a stealth extra tax on graduates layered on top of already frozen income tax and National Insurance thresholds, and it shifts (even) more of the cost of the system away from the state and onto a cohort who have already endured one round of threshold suppression under Michelle Donelan’s “fairer sharing of the burden” reforms, have watched the “deal” they signed up to being repeatedly tweaked after the fact, and had been led to expect a “month-on-month tax cut” rather than another quiet squeeze.
The Treasury’s justification consciously echoes Donelan’s line about graduate earnings premiums and fairness to non-graduates, but in practice this looks less like a principled reset of student finance and more like a return to the same playbook – using Plan 2 borrowers as a handy, captive tax base until the reality shows up on their payslips. For Reeves, it generates £285m in 2025-26, a big £5,915m “gain” in 2026-27 (that’s mainly the accounting revaluation of the loan book, not cash), then £255m in 2027-28, £290m in 2028-29, £355m in 2029-30 and £380m in 2030-31.
Rising National Living Wage and youth rates mean a substantial chunk of full-time students working in hospitality, retail and care will see higher hourly pay, although given the volume of jobs lost in these sectors in recent years (with similar warnings from those industries overnight), they’ll need to find a job first.
The creation of a “Fair Work Agency” with explicit focus on enforcement in “high-risk” sectors is also, if successful, is likely to impact on international student incomes in a way that few like to talk about, but pretty much everybody knows (working more than 20 hours a week, cash in hand, with no rights).
Extending the £3 bus fare cap will help, holding prescription charges steady all keep day-to-day pressure in shared student houses and commuter budgets a little lower than it would otherwise be, and taking around £150 off the average energy bill by shifting decarbonisation costs off bills and onto general spending won’t matter much given “all-inclusive” bills in halls and HMOs.
Free emergency contraception in pharmacies closes an obvious gap in sexual health provision for a very student-heavy age group, while the cap on ticket resale prices cuts straight across the live events market some students use.
Add all the measures up, and you might expect student poverty to show up in the annual release of the distributional impact on households analysis that gets produced to accompany budget day – but alas it remains the case that tuition fee loans show up as household income in the DWP’s Households below average income (HBAI) statistics, which means that the increase in maximum fees will see an HMO with 5 students in it looking 50k better off than they really are.
The chancellor capped national insurance contribution exemptions for salary sacrifice into pensions at £2,000 – employees who pay more than this amount each year into pensions will need to account for employer national insurance contributions on additional amounts. A note from sector employers association UCEA before the budget reminded the Treasury that this approach is widely used by universities, and calculated that a cap could cost individual USS institutions an additional £1-3m each year with a total cost to the sector north of £50m – and there are going to be impacts relating to other pension schemes too.
One of the biggest current issues with the wider education budget, and one that has pushed many local councils towards bankruptcy, is the rapidly rising cost of school provision and other support for pupils with special educational needs (SEND). Currently the costs of this provision are nominally covered by local councils, but are subject to a statutory override which means that the sums involved are not included within council deficit calculations. The budget confirms the June announcement that this arrangement will end from 2027-28, with costs (due to hit around £5bn) covered from that point within departmental expenditure limits.
This has a clear impact on other areas of government spending, and if the Department for Education is to be made responsible it is likely that at least some of this funding will have to be found via cuts to other budgets, including for tertiary education.
Key points:
The U.K.’s Information Commissioner’s Office (ICO) recently warned of a surge in cyberattacks from “insider threats”–student hackers motivated by dares and challenges–leading to breaches across schools. While this trend is unfolding overseas, it underscores a risk that is just as real for the U.S. education sector. Every day, teachers and students here in the U.S. access enormous volumes of sensitive information, creating opportunities for both mistakes and deliberate misuse. These vulnerabilities are further amplified by resource constraints and the growing sophistication of cyberattacks.
When schools fall victim to a cyberattack, the disruption extends far beyond academics. Students may also lose access to meals, safe spaces, and support services that families depend on every day. Cyberattacks are no longer isolated IT problems–they are operational risks that threaten entire communities.
In today’s post-breach world, the challenge is not whether an attack will occur, but when. The risks are real. According to a recent study, desktops and laptops remain the most compromised devices (50 percent), with phishing and Remote Desktop Protocol (RDP) cited as top entry points for ransomware. Once inside, most attacks spread laterally across networks to infect other devices. In over half of these cases (52 percent), attackers exploited unpatched systems to move laterally and escalate system privileges.
That reality demands moving beyond traditional perimeter defenses to strategies that contain and minimize damage once a breach occurs. With the school year underway, districts must adopt strategies that proactively manage risk and minimize disruption. This starts with an “assume breach” mindset–accepting that prevention alone is not enough. From there, applying Zero Trust principles, clearly defining the ‘protect surface’ (i.e. identifying what needs protection), and reinforcing strong cyber hygiene become essential next steps. Together, these strategies create layered resilience, ensuring that even if attackers gain entry, their ability to move laterally and cause widespread harm is significantly reduced.
Assume breach: Shifting from prevention to resilience
Even in districts with limited staff and funding, schools can take important steps toward stronger security. The first step is adopting an assume breach mindset, which shifts the focus from preventing every attack to ensuring resilience when one occurs. This approach acknowledges that attackers may already have access to parts of the network and reframes the question from “How do we keep them out?” to “How do we contain them once they are in?” or “How do we minimize the damage once they are in?”
An assume breach mindset emphasizes strengthening internal defenses so that breaches don’t become cyber disasters. It prioritizes safeguarding sensitive data, detecting anomalies quickly, and enabling rapid responses that keep classrooms open even during an active incident.
Zero Trust and seatbelts: Both bracing for the worst
Zero Trust builds directly on the assume breach mindset with its guiding principle of “never trust, always verify.” Unlike traditional security models that rely on perimeter defenses, Zero Trust continuously verifies every user, device, and connection, whether internal or external.
Schools often function as open transit hubs, offering broad internet access to students and staff. In these environments, once malware finds its way in, it can spread quickly if unchecked. Perimeter-only defenses leave too many blind spots and do little to stop insider threats. Zero Trust closes those gaps by treating every request as potentially hostile and requiring ongoing verification at every step.
A fundamental truth of Zero Trust is that cyberattacks will happen. That means building controls that don’t just alert us but act–before and during a network intrusion. The critical step is containment: limiting damage the moment a breach is successful.
Assume breach accepts that a breach will happen, and Zero Trust ensures it doesn’t become a disaster that shuts down operations. Like seatbelts in a car–prevention matters. Strong brakes are essential, but seatbelts and airbags minimize the harm when prevention fails. Zero Trust works the same way, containing threats and limiting damage so that even if an attacker gets in, they can’t turn an incident into a full-scale disaster.
Zero Trust does not require an overnight overhaul. Schools can start by defining their protect surface – the vital data, systems, and operations that matter most. This typically includes Social Security numbers, financial data, and administrative services that keep classrooms functioning. By securing this protect surface first, districts reduce the complexity of Zero Trust implementation, allowing them to focus their limited resources on where they are needed most.
With this approach, Zero Trust policies can be layered gradually across systems, making adoption realistic for districts of any size. Instead of treating it as a massive, one-time overhaul, IT leaders can approach Zero Trust as an ongoing journey–a process of steadily improving security and resilience over time. By tightening access controls, verifying every connection, and isolating threats early, schools can contain incidents before they escalate, all without rebuilding their entire network in one sweep.
Cyber awareness starts in the classroom
Technology alone isn’t enough. Because some insider threats stem from student curiosity or misuse, cyber awareness must start in classrooms. Integrating security education into the learning environment ensures students and staff understand their role in protecting sensitive information. Training should cover phishing awareness, strong password practices, the use of multifactor authentication (MFA), and the importance of keeping systems patched.
Building cyber awareness does not require costly programs. Short, recurring training sessions for students and staff keep security top of mind and help build a culture of vigilance that reduces both accidental and intentional insider threats.
Breaches are inevitable, but disasters are optional
Breaches are inevitable. Disasters are not. The difference lies in preparation. For resource-strapped districts, stronger cybersecurity doesn’t require sweeping overhauls. It requires a shift in mindset:
When schools take this approach, cyberattacks become manageable incidents. Classrooms remain open, students continue learning, and communities continue receiving the vital support schools provide – even in the face of disruption. Like seatbelts in a car, these measures won’t prevent every crash – but they ensure schools can continue to function even when prevention fails.
This is hypothetical, but the concept it’s illustrating is real.
Let’s say you’re in charge of a college budget, and there’s money for a new staff position. You have multiple requests for positions, so you need to pick the winner.
For the sake of the example, let’s stipulate that the salaries are close enough that they don’t tip the balance and that the relative staffing levels in each area are about equally suboptimal.
The contenders are:
Which do you choose? And, more to the point, why?
I hear a lot about “data-based” or “evidence-based” decision-making. But it’s not clear to me what data or evidence would settle the question. How would you know which one is the best choice?
I assume that any of the four would make a positive difference in student outcomes. Students who fail math are much likelier to drop out than students who don’t, and tutors help students pass. Librarians are crucial for students to learn to do research, especially in the age of AI. Academic advisers help students avoid wasting time on courses that won’t help them. Financial aid staffers enable students to get the money they need to go to college. They’re all helpful, and they’re all important. But how do you weigh one against the others?
In baseball, people with too much time on their hands came up with a single statistic to rule them all: wins above replacement. A player’s WAR score—seriously, that’s what they call it—indicates how many more (or fewer) games a team would expect to win in a given season if they used this player, as opposed to an average player at the same position. That way, a team could measure the value of a particular pitcher against the value of a particular outfielder.
We don’t have a number like that. How much more, or less, would a new tutor affect our graduation rate than a new adviser? And how would we know?
Any ambitious and quantitatively minded students in higher education administration graduate programs, you can have this research question pro bono. I’d love to see empirical evidence.
Until the dissertations come rolling in, though, I’d love to hear from my wise and worldly readers. Is there a good way to weigh these positions against each other? If anyone comes up with something good, I’ll be happy to share it in a subsequent column. As always, send your thoughtful responses to deandad (at) gmail (dot) com. Thanks!
Michigan State University has cut 99 positions as part of a comprehensive cost-reduction strategy aimed at addressing mounting financial pressures, President Kevin Guskiewicz announced in a recent letter to campus stakeholders.
The elimination of positions—spanning executive roles, support staff, faculty, and academic staff—represents the first phase of an $85 million budget reduction plan the institution unveiled in May. The cuts do not include non-renewed fixed-term appointments.
The predominantly white institution in East Lansing is targeting a 6% spending reduction this fiscal year, totaling $50 million, with plans to cut an additional $35 million—or 3%—in the following fiscal year.
Departments were directed to minimize personnel reductions during the initial year of cuts. Nearly two-thirds of this year’s $50 million reduction came from non-personnel expenses, including supplies and services, though layoffs proved unavoidable.
Beyond internal budget constraints, federal funding cuts eliminated an additional 83 positions at the university. In late July, 94 MSU Extension staff members lost their positions following the discontinuation of the Supplemental Nutrition Assistance Program-Education (SNAP-Ed), which provided nutrition and physical activity programming to low-income families.
Combined, the reductions have impacted 1.3% of MSU’s workforce since March 1.
Guskiewicz attributed the budget crisis to multiple factors: double-digit increases in employee healthcare costs, federal funding reductions, and accumulated general fund deficits from previous years.
The financial challenges persist despite MSU reporting its second-largest fall enrollment of 51,838 students and receiving a modest 2.1% increase in state appropriations, totaling approximately $333.8 million.
“We have taken the first difficult and necessary steps to assure the university’s financial sustainability,” Guskiewicz wrote, thanking faculty and staff for their commitment to the institution’s mission.
The university will launch its next budgeting cycle shortly, with request letters scheduled for early November and submissions due Jan. 23. Guskiewicz pledged to share additional information as the fiscal year concludes.
MSU is providing outplacement services to eligible individuals affected by the cuts. The president acknowledged that some reductions continue to unfold through union and Human Resources processes.
“I appreciate the compassion our teams are showing one another during this period, as well as your patience in understanding that we are trying to share information transparently and in a timely manner,” he stated.
The university operates on a nearly $3.7 billion budget, with $1.7 billion allocated to the general fund.
Creating a budget each year will help guide your chapter’s financial decisions and ensure you are using resources responsibly.
A budget provides a clear picture of expected income and expenses, aligns your spending with the chapter’s goals, and helps you plan events and initiatives with confidence. Tracking your real expenses and income against your budget helps identify trends and may help you better prepare for future years.
The University of Chicago will move to cut $100 million from its budget, citing “profound federal policy changes” and multi-year deficits. Paul Alivisatos, president of the private institution, said that goal would require staff reductions.
Number of the week:
15%
“The First Amendment doesn’t set when the sun goes down. University students have expressive freedom whether it’s midnight or midday, and Texas can’t just legislate those constitutional protections out of existence.”
That was JT Morris, senior supervising attorney at the Foundation for Individual Rights and Expression, in a statement Wednesday. FIRE sued the University of Texas system on behalf of students over a new state law that directs public colleges to prohibit “any speech or expressive conduct protected by the First Amendment” on campuses from 10 p.m. to 8 a.m.
Like many other higher education institutions, the University of Nebraska System has sought to lower its expenses amid myriad financial headwinds, including rising labor costs and state and federal funding challenges. In June, system leaders approved plans to cut $20 million from its budget for the 2025-26 fiscal year and raise tuition by an average of 5%.
Those moves come after system leaders slashed $11.8 million from the most recent budget and $30 million from two years prior. The system has also offered several waves of buyouts over the past 15 years, though the payouts have decreased, according to the Lincoln Journal Star.
In this case, those taking the buyouts will receive 70% of their annual base salary in a lump sum payment. In 2019, eligible faculty who took buyouts got 80% of their annual salary and in 2014 they received 90%, the Journal Star reported. In 2010, eligible faculty received 100% of their salary.
Faculty members who take the latest buyouts will separate from the university next summer.
However, not all faculty members who apply will automatically be approved. While the system plans to allow as many interested employees to participate as possible, an FAQ said “each campus reserves the right to limit the total number of participants in order to preserve the viability of programs and services, as well as to remain fiscally responsible.”
The news comes as the University of Nebraska-Lincoln, the system’s flagship campus, plans to slash $27.5 million from its own budget by the end of the year to remedy a structural deficit. The cuts could include eliminating or merging academic programs.
Earlier this month, UNL President Rodney Bennett said will review a planning committee’s recommendations for cuts and present final budget recommendations to Gold in October.
UNL officials also plan to grow extramural grants and contracts and boost revenue through higher enrollment and retention. They also hope to see increased revenue from the system’s tuition hike, which raised in-state undergraduate tuition from $277 to $291 per credit hour.
The other institutions in the Nebraska system are the University of Nebraska at Kearney, the University of Nebraska at Omaha and the University of Nebraska Medical Center.
A planning committee composed of administrators, faculty and student representatives plans to discuss potential budget cuts this week. Bennett will then take the committee’s recommendations and propose a final budget plan to the head of the University of Nebraska system by the end of October, he said.
The plan may recommend degree program cuts or mergers that will allow UNL to capitalize on its “existing strengths,” the chancellor said.
Moving forward, the university will prioritize growing extramural grants and contracts and increasing tuition revenue through higher enrollment and student retention, he said.
UNL officials also hope to see additional revenue from a tuition hike approved by the University of Nebraska system’s board in June.
In-state undergraduate tuition at UNL will increase from $277 to $291 per credit hour for the 2025-26 academic year. For out-of-state students, the cost will rise from $888 to $932.
In the same vote approving the tuition increase, the system board cut more than $20 million from its budget.
Like Bennett, the system board cited “a legislative session in which the university received modest funding increases that do not fully cover inflationary pressures, rising employee benefit costs or strategic investments.”
The University of Nebraska relies heavily on state funding. In the fiscal 2024-25 year, a fifth of the system’s operating budget — just under $700 million — came from state appropriations.
However, recent increases to the state’s higher education funding have been nominal and have not kept pace with inflation.
Earlier this year, Nebraska’s Legislature raised the University of Nebraska’s state funding by 1.25% over the next two years. The bump fell well short of inflation and the system’s requested increase of 3.5%.
But that’s still a significant improvement over Nebraska Gov. Jim Pillen’s initial proposal. Pillen, who served as a system regent for a decade, sought to cut the system’s funding by 2%, which would have amounted to a loss of $14.3 million.
On Wednesday, Bennett referenced the series of austerity measures the university has undertaken in recent years and expressed hope that the next round of cuts could help UNL achieve operational stability.
“I want to realize a future for UNL in which faculty and staff are not repeatedly asked to do the same quality and amount of work with fewer resources — but rather are provided the support and opportunity to excel beyond current levels of success,” he said