Meeting the Challenges of a Shifting Landscape

Wednesday, August 20, 2025

Dear CMU Faculty and Staff:

In my message to campus on March 26, I wrote about the headwinds we face — political volatility, pressures on research funding, shifting enrollment dynamics and the challenges of a deeply divided national landscape. As we enter a new academic year during these uncertain times, I wish to update you on CMU’s financial outlook and how we are navigating these challenges while remaining grounded in our commitment to our people and our mission.

The steps we are taking, and the strategies we are advancing, are possible only because of the collective effort and dedication of so many across Carnegie Mellon. Provost Jim Garrett and I are deeply grateful for your resilience, commitment to our students and compassion for one another.

Here are four takeaways from this message:

  1. This spring and summer, the academic and administrative leadership team modeled different financial scenarios and prepared contingency plans. Based on this analysis and our current fall enrollment projections, we reduced expenses across the university by $33 million for the current academic year (FY26). We do not expect to run a deficit this year and we have no university-wide layoffs planned.
  2. The university is in a strong financial position but existential challenges and continued uncertainty require us to be both prudent with respect to our expenses in the short term and proactive with our strategic actions for the long term.
  3. With the support of academic and administrative leadership, we are taking deliberate steps to strengthen CMU's long-term resilience, such as diversifying research funding, strengthening partnerships, and adapting our academic programs and administrative services and support to meet future needs.
  4. I will host two town halls for faculty and staff on Sept. 4 and 10 to provide more details and answer questions. I also will convene the Student Senate and Graduate Student Assembly to share insights with our students.

Our Financial Position and Near-Term Steps

We are entering this year of challenge from a place of financial strength. We have not run a deficit for more than a decade and do not expect to run a deficit this year; however, we are facing significant constraints and unprecedented uncertainty. Let me share with you a few data points about our FY26 budget, which has been reviewed with the CMU Board of Trustees:

  • Our graduate tuition revenue is projected at $365 million — approximately $20 million below initial forecasts, driven primarily by lower-than-expected enrollment at this level.
  • We are already seeing signs of a marked decline in the pipeline of new federal research awards nationally and at Carnegie Mellon. We also expect a decline in university research support once Congress finalizes appropriations for U.S. science agencies including NSF, NIH and DOE. The positive news is that CMU is well-positioned: overall research support has grown by 24% since FY20, reaching more than $650 million in FY25. And our partnerships with industry remain very strong and growing.
  • There is ongoing discussion about the federal reimbursement rate for facilities and administrative (F&A) costs, the essential expenses that sustain the infrastructure and operations required for research. If a proposed 15% cap on these reimbursements were enacted — the worst-case scenario — it would create an additional $40 million annual shortfall for CMU. We are continuing our strong advocacy in Congress and have advanced several legal challenges to prevent this kind of cap, as it would undermine the very foundation of our world-class research — and, by extension, the pursuit of discoveries that advance knowledge and improve lives.

This spring and summer, the academic and administrative leadership team modeled different financial scenarios and prepared contingency plans. Based on this analysis and our current fall enrollment projections, we reduced expenses across the university by $33 million for the current academic year (FY26).

Several proactive measures have helped us manage this year’s challenges, including pausing merit increases, reducing non-essential expenditures, limiting new staff and faculty hiring to strategic needs and, in some units, pursuing voluntary retirement programs and targeted staff reductions. We do not have broad layoffs planned, and this remains a measure of last resort. Our focus is on taking steps now that minimize the likelihood of having to consider this in the future.

I know the decision to forego merit increases this year is deeply felt across our staff and faculty community. We made this short-term decision as part of our larger commitment to protecting as many jobs as we can over the long term. If conditions allow, one of my highest priorities this fall will be to revisit how we might recognize and reward the extraordinary contributions of our colleagues.

Headwinds Facing Higher Education

The long-term trends shaping research universities will require us to adapt with urgency and purpose.

Across the country, universities are contending with declining public trust, heightened political scrutiny and questions about the value of a college degree. At the same time, the long-standing research partnership between the federal government and universities — responsible for discoveries from the internet and artificial intelligence to life-saving medical breakthroughs — is under intense pressure. While isolated freezes on university funding may draw headlines, the deeper risk lies in the cumulative impact of a sustained reduction in federal support for research and creative endeavors. Over time, such erosion would diminish America’s capacity for discovery and innovation, with far-reaching consequences for our economic prosperity and societal well-being.

This environment poses particular risks for early-career researchers and faculty nationwide, and also impacts the broader Ph.D., postdoc and research staff community. As federal resources tighten, these colleagues face steeper hurdles in securing the grants and collaborations that fuel their societal impact. We are committed to engaging and supporting our early-career researchers so that these emerging scholars can continue to thrive and advance in their fields at CMU.

Demographic changes are reducing the number of college-age students nationally while intensifying global competition for talent. International student enrollment, critical for both our academic vibrancy and research mission, is increasingly subject to geopolitical forces and visa policy changes. The impact of this uncertainty on our international students and on our entire community is unsettling and deeply concerning. Although our domestic pool of applicants remains robust and exceptionally high-quality, the recent federal overhaul of financial aid is tightening student loan limits, restructuring Pell Grant eligibility and eliminating Grad PLUS loans — changes that may affect access and affordability for highly qualified students from diverse backgrounds.

Finally, the rapid evolution of technology, including generative AI, is redefining the skills and competencies students need and compelling institutions to adapt faster than ever before.

Long-Term Strategic Actions

As a top research university leading at the nexus of technology and society, CMU is well-positioned to seize opportunities in the years ahead. Guided by our strategic framework and with the support of the Board of Trustees, the academic and administrative leadership team has been advancing proactive strategies that will bolster CMU’s long-term strength:

  • We are continuing to build on the momentum of the Make Possible campaign by fundraising for the priorities it articulated — including support for scholarships and fellowships, student success initiatives, endowed professorships and other tools to recruit and retain top talent.
  • While federal research dollars are under pressure, we are doubling down on strategic partnerships with the private sector and philanthropic foundations, especially in areas critical to the nation where our expertise is unparalleled.
  • Under Vice President for Research Theresa Mayer's leadership, we are streamlining and enhancing research administration systems and processes — including contracting and IP policies — to enable our faculty to compete more effectively for external research funding and respond more swiftly to emerging opportunities.
  • Our advocacy in Washington, D.C., and our collaboration with peer institutions in the AAU will remain a top priority, both as an immediate imperative and as a long-term effort. We must continue to make the case for the extraordinary value that federal investment in research and education brings to our nation and its prosperity, security and global leadership.
  • We are undertaking a comprehensive review of our educational offerings, systems and operations. This effort, led by Provost Garrett and supported by our deans, is designed to optimize our portfolio of master’s programs by expanding access, advancing online graduate certificate opportunities and continuing to improve the student experience.
  • While we continue to attract the best and brightest students from around the world, we are examining our enrollment strategy — including the balance of international vs. domestic students and undergraduate vs. graduate students — to ensure long-term stability.
  • We also will be engaging the campus community in efforts to align our people, systems, training and organizational structures to enhance excellence and effectiveness.

Shaping the Future Together

This moment calls for us to come together as a community. In that spirit, I will host two in-person town halls for faculty and staff — one on Thursday, Sept. 4, at noon and another on Wednesday, Sept. 10, at 4 p.m., with an option for attendance via livestream. These forums will allow me and our leadership team to share more about the university’s short-term plans and long-term strategies, and to answer questions. More details on these town halls will be shared next week. (I also will convene the Student Senate and Graduate Student Assembly to share these insights with our students.)

The path forward will be guided by the voices of our community, ensuring that faculty, staff and students have a meaningful role in shaping what comes next for CMU. I invite you to share your ideas at excellence@andrew.cmu.edu, as it is your insights that will help us stay true to our mission and chart a path of excellence.

Carnegie Mellon is no stranger to times of uncertainty, and each time we have emerged stronger — not because the path was easy, but because we walked it together. As I said in my March 26 message, we are approaching this work grounded in three equally important and fundamental principles: maintaining academic and research excellence; supporting our people and our community; and securing the long-term sustainability of CMU to advance our mission. These guideposts allow us to evolve while preserving the strengths and values that make Carnegie Mellon a world leader.

When I came to this country over four decades ago, I was inspired by the spirit of creativity and innovation that has always defined the United States. That spirit has similarly fueled Carnegie Mellon’s mission since our founding, and it is what gives me confidence in our university and the important role we will play in inventing the future. I remain optimistic that Carnegie Mellon will not only navigate the present moment, but continue to shape the breakthrough discoveries of tomorrow and educate the leaders the world so urgently needs.

Warm regards,

Farnam Jahanian
President
Henry L. Hillman President’s Chair