Dear Faculty and Staff,
Late last month, we shared details about the financial realities facing DePaul in this current year. As promised, we are following up with next steps about how we will move forward together.
As we said in our
last communication,
we are facing financial challenges in our FY26 budget that were not anticipated and are caused by unexpected changes in federal policy. The severe decrease in international students, accompanied by the need to offer higher financial aid to new students, and to cover rising benefits costs are all now driving a projected operating deficit in FY26. To maintain the university’s financial strength, we must act swiftly to reduce current-year spending.
As we move through these next few months and face extremely difficult decisions, we want you to know we are prioritizing ensuring that we can continue to invest in the parts of our university that are directly responsible for our students’ progress. We will also center our care for our community, stewardship of our resources, and a commitment to the public good. These principles remind us to act with compassion while making the choices needed to secure our future.
Cost-saving measures to be implemented
Over the past few weeks, we have worked in close collaboration with the Strategic Resource Allocation Committee, vice presidents, and deans to understand the scope of DePaul’s financial challenges and identify responsible solutions that will strengthen our university’s long-term future. Upholding our commitment to shared governance, we have had multiple discussions with leadership in Faculty Council, Staff Council, and the Student Government Association. We also spoke at the Faculty Council and Staff Council town halls today.
After careful consideration, we will move forward with several measures to avoid an operating deficit this fiscal year. Implementing these measures will allow us to complete the year in a positive financial position and will be made through consultation with all the academic and staff leaders at the university.
On Oct. 4, SRAC unanimously endorsed a series of recommendations to balance the FY26 budget. In support of these recommendations, we will pursue the following measures to be made effective on Jan. 1, 2026:
- We will enact pay cuts for executive officers, vice presidents, and deans.
- We will need to make staff and administration workforce reductions. Each area will independently determine these reductions, which we expect to complete by early December.
- We will not be able to award merit increases for faculty, staff, or the administration this year.
- To minimize the number of staff and administrative reductions, we will change the university’s 403(b) match contribution for members in our community from 10% to 8%. As soon as the university’s budget situation improves, it will be a high priority to review reinstating the 10% match contribution.
In addition to the above changes, we will need to implement the following reductions immediately:
- We will need to begin a university-wide staff hiring freeze and a faculty hiring slowdown. We also will eliminate most open positions.
- We will also need to reduce discretionary spending (e.g., professional services, events), as well as restrict capital and technology investments to only the most essential needs.
Please know that each academic and administrative unit will be engaged in the decisions listed above, and we will begin that work immediately. We recognize the profound impact these measures have on our colleagues and community. We are committed to approaching each step with empathy, respect, and transparency.
Overcoming the widespread challenges facing higher education
As we have emphasized previously, external factors have placed unprecedented strain on colleges and universities nationwide. Institutions everywhere are navigating strong headwinds. These forces, many beyond our control, have directly affected DePaul’s revenues. These include:
- Declining undergraduate enrollment due to the demographic cliff. The Chronicle of Higher Education has an explainer video on the forces driving the drop in college-aged students in the U.S., as well as the opportunities to work with, rather than against, current demographic trends.
- Shifting federal policies on international students: The New York Times reports the number of international students arriving in the U.S. this August fell by 19% compared with last year — the largest decline outside the pandemic.
- Rising healthcare and benefit costs: DePaul has experienced a $23 million increase in benefit costs over the past five years. We are not alone, as a survey of 1,700 employers shows they anticipate a sharp rise in medical costs driven by higher drug costs and demand for care.
- A significant increase in the need for student financial aid: The cost of providing financial aid is now projected to be roughly $7 million above budgeted levels for the current fiscal year. Looking ahead, the elimination of Grad PLUS loans and the caps on Parent PLUS loans will place further strain on students and families.
We strongly believe that our Designing DePaul strategic plan will position us to overcome these headwinds. The elements in the plan allow us to invest in essential work and create revenue streams to sustain our Catholic, Vincentian mission, all while creating space to reinvest in our people. We are grateful for the many faculty and staff who have volunteered to serve on the strategic plan subcommittees and will share more details about next steps soon.
In addition, Joint Council has been tasked with creating a long-range plan that accounts for the level of volatility created by these ongoing headwinds. This long-range planning work will focus on both our mission and our financial stability over the long term.
Thank you for your continued care, collaboration, and commitment to our students and to one another. It is through that shared care and our Catholic, Vincentian values that we will continue to move forward, together.
Sincerely,
Robert L. Manuel
President
Salma Ghanem
Provost
Sherri Sidler
Executive Vice President and CFO