Dear Faculty and Staff,
In the days following our previous message on Oct. 15 and the town hall meetings with Faculty Council and Staff Council, we have received many questions. We appreciate the ongoing opportunity to discuss the budget situation with our university community members and are committed to remaining transparent.
The university is navigating an extraordinarily difficult moment. Every area across our university is making staff and operational cuts. We recognize the enormous amount of stress this process is creating across our community, and we are making every effort to remain grounded in our Catholic, Vincentian values, leading with compassion and care for the individual.
To uphold our commitment to transparency, we would like to share additional details about the reductions to the FY26 budget.
Budget reduction overview
In the town hall meetings, we shared numbers that help explain where things stand financially. Right now, we are projecting a $12.6 million shortfall compared to the budget the Board of Trustees approved for FY26.
In addition to closing that gap, the university needs to maintain a positive balance to ensure we have enough cash on hand to pay our bills, including regular expenses such as salaries and daily operations. We are aiming for a 2.5% operating margin, or about $14.8 million.
When you combine the projected shortfall ($12.6 million) with the 2.5% margin ($14.8 million) we need to achieve, it means we must reduce spending by a total of $27.4 million.
Sustainable operating margin
Our 2.5% operating margin target remains below DePaul’s long-term sustainable goal of 4.0%. This goal represents the levels of surplus needed for the university to stay financially strong – not only to pay our bills, but also to reinvest in the institution and respond to new opportunities and challenges.
Recognizing that it would be difficult to make significant adjustments mid-year, the Board of Trustees agrees with focusing on achieving this pragmatic 2.5% margin. While this falls short of the university’s long-term 4.0% sustainability target, it reflects a balanced approach to maintaining operational stability while addressing immediate financial realities.
Because we have not achieved a sufficient operating margin over the past several years, the university has depleted its cash balances and now relies heavily on its available credit lines to manage monthly cash needs. Using these lines also increases interest expense, further constraining our financial flexibility.
A breakdown of the budget reductions
Of the $27.4 million that we need to cut, we will achieve $11.4 million in savings through university-wide measures that include eliminating the FY26 merit increase for faculty and staff, reducing the 403(b) contribution from 10% to 8%, instituting a staff hiring freeze, and reducing pay for executive officers, vice presidents, and deans. These steps were created through the painstaking deliberations of SRAC.
The remaining $16.0 million will be achieved through operating expense reductions and staff eliminations. The president’s area is expected to reach $8.6 million in reductions; the executive vice president’s area is expected to reach $3.0 million in reductions; and the provost’s area is expected to reach $4.4 million in reductions.
Our approach to allocating these cuts is to first make sure we found as many university-wide reductions as possible. Then, where we need to find additional cuts, we are prioritizing ensuring that the pieces of the university that directly affect the educational experiences of our students are not included.
The weight of each unit’s reduction is based on the relative size of their budgets. In the case of Academic Affairs, we asked each dean to work through their shared governance processes to identify operating expense reductions contributing to the $16.0 million in total cuts.
You can find the full presentation that we shared at Faculty Council and Staff Council on the Budget Blueprint website. While we are happy to share this information with our internal audiences, please understand that it is not final and subject to change.
Thank you for your continued care and dedication to our university community. We will continue to make ourselves available to meet with areas across our university as we navigate this extremely difficult process.
Sincerely,
Robert L. Manuel
President
Salma Ghanem
Provost
Sherri Sidler
Executive Vice President & CFO