University of Oregon To Cut $65M From Its Budget Amid Declining Out-Of-State Student Enrollment

University of Oregon

The University of Oregon will cut about $65 million from its budget over the next several years as it confronts a projected drop in out-of-state student enrollment and related tuition revenue.

In a May 14 message to faculty and staff, President Karl Scholz said new enrollment projections show "significantly lower" numbers of first-year nonresident students for the coming academic year, forcing the university to act to avoid an ongoing structural deficit.

Nonresident undergraduates pay substantially higher tuition than Oregon residents and have historically subsidized in-state students, making their enrollment a key driver of the school's finances, according to the Daily Emerald.

University officials describe the situation as one of the most difficult financial periods the institution has faced in years, with enrollment pressure compounding other budget challenges.

To close the gap, the university has imposed an immediate freeze on most hiring and pay increases and is capping nonessential travel across campus.

Scholz said the measures are designed to stabilize the budget while leadership identifies longer-term cuts and investments that can be phased in without abrupt disruptions to academic programs. Some already-committed raises will still go forward, but new commitments are being tightly constrained.

The shortfall is also being linked to rising operating costs and reductions in some research grants, according to discussions at a recent Board of Trustees meeting. Trustees were briefed that factors, including lost grant funding and general cost inflation are worsening the impact of weaker nonresident enrollment.

A previous internal projection pegged the deficit at about $25.7 million, but updated enrollment numbers and cost estimates led to the larger $65 million target, KVAL reported.

Campus housing will not be spared from the retrenchment. As part of its cost-cutting effort, the university has decided to close Barnhart Residence Hall, Barnhart Dining Hall, and Riley Hall for the 2026–27 academic year, moves administrators say reflect excess capacity as enrollment softens.

Officials have not yet detailed how students living in those facilities will be reassigned, but said they aim to minimize disruptions to housing and student services.

Despite the austerity measures, Scholz has emphasized that the university will continue to prioritize its research strengths and student experience as it adjusts. Leadership plans to provide more specifics on additional reductions and any potential program changes in a series of updates expected later this summer and fall.

The Board of Trustees is scheduled to take up key pieces of the budget plan at upcoming meetings as the institution works to rebalance its finances in time for future academic years, as per KLCC.