A seismic shift in federal spending priorities.
Mounting deficits threatening critical state funding.
An ongoing recovery from the COVID-19 pandemic.
Any one of these challenges would unsettle leaders at a public research university. Washington State University faces all three simultaneously.
“In my 29-year career in higher education, this is possibly the most challenging I think that I’ve seen because of the uncertainty of not knowing what’s going to happen at the state level and federal level,” Leslie Brunelli, executive vice president for Finance and Administration and chief financial officer, told members of the WSU Board of Regents in February. “It’s pretty severe.”
It demands that difficult decisions be made to ensure WSU can continue to fulfill its historic mission of teaching, research, and service to the state and its communities.
In the weeks ahead, WSU Insider will examine the challenges facing not only WSU, but higher education broadly. The series will also share the steps being taken at WSU to prepare for and mitigate the impact of declining state and federal support. This at a time when the university cannot rest on its thin financial reserves or delay in acting decisively.
Anticipating financial stresses
At a special meeting of the WSU Board of Regents on Feb. 17, university leaders laid out the scale of the financial stresses potentially impacting the institution.
WSU stands to lose nearly $5 million per year if a proposed 15% cap on indirect cost reimbursements from National Institutes of Health grants goes into effect. If similar caps are enacted across other federal agencies, the annual loss could swell to an estimated at $23.5 million.
Proposed changes in federal higher education policy, along with a pending budget shortfall in the Pell Grant program, have also led to concerns about the stability of federal financial aid. Forty percent of WSU students are eligible for the Pell Grant program and nearly half of WSU undergraduates receive federal student loans.
In addition, a pause in U.S. Department of Agriculture (USDA) research funding and federal employee terminations threatens work in WSU labs done in collaboration with our agricultural stakeholders. Washington State University is one of the top recipients of USDA research grants in the country.
Financial pressures are also affecting the state of Washington, which is facing a projected $15 billion shortfall over the next four years. While the exact reduction in state support for higher ed is not yet set, university leaders are already preparing to be without millions of dollars of appropriations from the legislature each of the next two years.
Financial pressures are also affecting the state of Washington, which is facing a projected $15 billion shortfall over the next four years.
These forecasted reductions cannot simply be absorbed. Several colleges, campuses, and units are operating with current core fund structural deficits that must be remedied to ensure that the university has the working capital required to manage operations.
While the university is actively looking at how to optimize the academic enterprise, the timeline for that work is likely to accelerate due to mounting financial pressure. This will include an examination of doctoral and other programs on offer at WSU, Provost and Executive Vice President Chris Riley-Tillman recently told members of the WSU Board of Regents.
Several reviews of administrative functions are underway across the WSU system as well.
“I do think that this crisis will be one that will force us to make some extremely difficult decisions that we probably should have been making, but we need to be prepared and understand the fiscal situation going in and why immediacy is going to be critical,” Riley-Tillman said.
Freezes to purchasing, hiring, and travel, as well as taxing unit carryforward dollars, are among the initial measures under consideration. Existing restrictions on spending carryforward also remain in place.
Units across the WSU system are being asked to prepare core fund budgets with reductions of between 1% and 10% for fiscal year 2026. Budget hearings are scheduled to take place April 21 to May 2, with Regents expected to review and approve the institution’s FY26 budget in May.
In a message to the university community Wednesday, President Kirk Schulz and Incoming President Elizabeth Cantwell vowed to keep the university community informed as leadership considers their options.
“We are committed to providing timely information, but the sheer pace of change means that uncertainty will persist,” Schulz wrote. “In the face of this uncertainty, our mission remains unchanged: WSU exists to create opportunity for all Washingtonians, and we will continue educating students from all backgrounds, driving research that matters, and serving our communities.”
This article is part of a series focused on the extraordinary challenges facing the university system. WSU Insider, in the weeks and months to come, will continue to examine the headwinds and how the university is preparing.
