Brown University is taking out a $500 million loan as it faces a prolonged federal funding freeze and braces for other changes to federal policy, Bloomberg reported.
The university previously borrowed $300 million in April after the Trump administration said it was freezing about $510 million in federal grants and contracts at the Ivy League institution.
“Given recent volatility in capital markets and uncertainty related to evolving federal policy related to higher education, research and other important priorities of Brown, the university is fortunate to have a number of sources of liquidity,” a Brown spokesperson told Bloomberg.
Other universities have turned to loans or bonds to get immediate cash amid federal funding freezes.
In a June message that warned of the potential for “significant cost-cutting” measures, Brown administrators pointed to numerous challenges such as federal research grant cuts, the increasing tax on university endowments and threats to international students. Administrators were considering, among other measures, service reductions as well as changes to staffing levels and graduate student admissions. Brown was already grappling with a $46 million deficit before President Trump took office in January, and the university implemented a hiring freeze in March.
“All these losses represent an ongoing threat to Brown’s financial sustainability and, consequently, our ability to fulfill our mission,” university officials wrote of the federal policy changes. “We are doing everything possible to minimize the impact, and we are proud of the response of this community in making important changes to operations to reduce expenses over the past year. Unfortunately, the level of savings to date is not enough to counter the deep financial losses Brown is experiencing and must prepare for in the coming year.”
