The University of Minnesota will reduce its budget by $225 million over two years and adopt a two-year budgeting cycle to address long-term enrollment shifts, unstable public funding, and rising costs. The plan spans all five campuses and follows a June proposal that relied on $98.6 million in savings and proposed eliminating 165 academic and 64 support roles. Leaders said the process will be collaborative but warned that difficult decisions lie ahead.
University of Minnesota Announces $225M Cost-Cutting Plan, Moves to Two-Year Budgeting
Higher Ed Dive, an Industry Dive publication
The University of Minnesota will cut $225 million from its budget over the next two years and transition from an annual to a two-year budgeting cycle, senior leaders announced Thursday. The initiative is a response to long-term shifts in enrollment, uncertain state and federal funding, and rising operating costs and will span all five UMN campuses.
Why the Cuts?
University leaders described the measures as a strategic response to persistent sector trends rather than a short-term correction. "This is not a temporary change — this is an institutional inflection point that asks us to think about our work in new and bolder ways," the message said, signaling a sustained effort to realign resources and reduce redundancy across academic and administrative portfolios.
What’s Already Happened
In June, the University of Minnesota Board approved a fiscal 2027 balancing plan that relies on $98.6 million in savings and alternative revenues. That plan included proposals to eliminate 165 academic positions and cut 64 support staff roles. Under current scenarios, the institution expects a total of about 229 job eliminations.
By the Numbers
- $225 million in planned reductions over two years (about 15% of allocated operating revenue).
- 229 job eliminations expected under current budgeting scenarios.
- 72,010 students enrolled in fall 2025—up 7.8% from five years earlier—though Duluth and Morris campuses saw net declines over that period.
- Operating loss widened by $76.9 million (4.9%) between FY2024 and FY2025 to $1.7 billion; when nonoperating revenue such as state and federal appropriations and gifts is included, the university reported modest surpluses that grew in that period.
Leadership Response and Next Steps
President Rebecca Cunningham and Provost Gretchen Ritter said the university has not yet specified whether the new savings push will include further layoffs. They emphasized that the process should be collaborative: administrators intend to solicit more input and engagement from faculty and staff as they develop concrete proposals.
"This next phase requires deliberate choices about how to reduce expenses and redundancy while we simplify and focus how we work across both our administrative and academic portfolios," the leaders wrote, adding that difficult decisions and conversations lie ahead.
Context
Earlier steps to address budget pressure included a 6.5% tuition increase at the flagship campus in 2025 and a 7% cut to programmatic budgets. The university plans to involve campus leaders, shared governance groups, and staff in the budget-planning process as it moves to a two-year cadence.
What To Watch: How UMN balances deeper structural savings with commitments to academic programs and student support, and whether the institution can stabilize finances while avoiding widespread layoffs.
Help us improve.
