\n<\/p>\n
Economic uncertainty\u2014the kind that dominated headlines for the first half of 2025\u2014makes long-term financial planning difficult. But nearly two in three college and university chief business officers say that uncertainty surrounding federal policy for higher education is hindering their ability to conduct even basic financial planning. That\u2019s according to Inside Higher Ed<\/em>\u2019s forthcoming annual survey of CBOs with Hanover Research.<\/p>\n \u201cHigher education has not faced this level of financial uncertainty in generations,\u201d said Robert Kelchen, chair of educational leadership and policy studies at the University of Tennessee at Knoxville, who reviewed preliminary survey data.<\/p>\n While recent history offers one comparison\u2014the early days of the pandemic, when uncertainty was similarly \u201coff the charts\u201d\u2014the federal government at that time \u201cquickly stepped in to provide support,\u201d Kelchen continued. Today, by contrast, the federal government \u201cis causing the uncertainty.\u201d<\/p>\n According to the survey, federal policy uncertainty under the second Trump administration is moderately impacting basic financial planning at 49\u00a0percent of institutions represented, meaning that challenges have arisen but CBOs and their colleagues have managed to adapt. Another 14\u00a0percent of institutions are severely impacted, meaning basic financial planning has been extremely difficult, leading to major disruptions. This is consistent across sectors.<\/p>\n<\/p>\n The survey was fielded in April and May, with CBOs from 169 institutions, public and private nonprofit, associate to doctoral degree\u2013granting, responding. The full 2025 Survey of College and University Chief Business Officers will be released later this month. It includes additional findings on the second Trump administration\u2019s impact on institutional finances so far, mergers and acquisitions, value and affordability, and more.<\/p>\n CBOs see federal student aid policy changes as a major risk, with 68\u00a0percent citing this as a top federal policy concern from a longer list of options. A distant second: research funding levels, cited by 24\u00a0percent of all CBOs. Public institution CBOs are relatively more concerned about research funding, at 36\u00a0percent versus 9\u00a0percent of private nonprofit peers.<\/p>\n Questions about the future of federal student aid come on top of last year\u2019s Free Application for Federal Student Aid fiasco. And nearly four in 10 surveyed CBOs (38\u00a0percent) report having already experienced significant to severe disruptions related to that FAFSA rollout.<\/p>\n<\/p>\n In Kelchen\u2019s assessment, there\u2019s no guarantee that the federal financial aid system will work as intended this fall\u2014especially for colleges that require additional oversight before receiving funds, given recent mass layoffs at the U.S. Education Department. Congress also last week passed what he described as the largest set of changes to federal higher education policy in decades, via the Trump-backed One Big Beautiful Bill Act, with potential \u201cdownstream effects for state budgets due to cuts to federal benefits.\u201d <\/p>\n Throw in cuts to federal research funding and big changes for international students, and colleges\u2019 budgets \u201care highly uncertain,\u201d Kelchen said.<\/p>\n Case in point: Michigan State University president Kevin Guskiewicz recently announced a plan to cut spending, including faculty and staff positions. He blamed expectations that the university will receive \u201cless money from the federal government due to research cuts and restrictions on international enrollments, although the magnitude of those impacts is uncertain.\u201d Also at play: increasing operating costs and state budget concerns.<\/p>\n In another example of uncertainty in action, Val Smith, president of Swarthmore College, announced in late May that the institution\u2019s Board of Managers had been unable to carry out \u201cone of its primary fiduciary responsibilities: approving the college\u2019s operating budget,\u201d at least as usual. Given the \u201cconfluence of uncertainties we currently face,\u201d she said at the time, the board moved forward with an interim operating budget for the first three months of the new fiscal year. It plans to revisit and adopt a full operating budget in the fall, \u201cwhen we expect to have more clarity.\u201d<\/p>\n To Kelchen, interim budgets such as Swarthmore\u2019s can make sense if revenues are \u201chighly volatile.\u201d So he said he wouldn\u2019t be surprised if other institutions were quietly making similar moves.<\/p>\n In an additional expression of uncertainty, most surveyed CBOs describe the impact of the second Trump administration\u2019s policies on their institution\u2019s financial outlook\u2014both current and over the next 12 months\u2014as somewhat or very negative.<\/p>\n<\/p>\n Most CBOs report minimal federal funding cuts under Trump so far. A handful do indicate that their funding has been reduced significantly, by more than 10\u00a0percent. An additional 11\u00a0percent report that funding has been reduced by 5 to 10\u00a0percent. And about as many aren\u2019t sure. But the rest say funding has decreased by less than 5\u00a0percent or stayed consistent.<\/p>\n<\/p>\n While the ultimate impact of federal policy changes remains to be seen\u2014and will look different at different institutions\u2014strategist Rebeka Mazzone advised frequent collaboration and communication between CBOs and other cabinet-level leaders, \u201cso that you always know what\u2019s happening on a more real-time basis.\u201d <\/p>\n Also critical: forecasting, or \u201chaving a tool that allows you to constantly update the dollars you have so that you understand the impact.\u201d Mazzone, founder of FuturED Finance, said that this real-time process is underused and very different from typical budgeting, in a which a yearlong spending plan is developed based on a particular moment in time. But the \u201csmaller and the more cash-strapped the institution is, the more important the forecast becomes.\u201d<\/p>\n Fancy software isn\u2019t necessary, she said, as forecasting can happen on a spreadsheet. What matters is \u201ccapturing changes and overlaying them on the budget so that you understand where you\u2019re going to end the year, and that helps you to more proactively manage the outcomes.\u201d<\/p>\n Another important tool? Five-year projections. \u201cIf you have lower enrollment this year, that is going to affect you also for the next three years. If you have a higher discount rate this year, that is going to affect you also for the next three years.\u201d So when institutions \u201csuddenly\u201d close, Mazzone said, \u201cit\u2019s not so sudden. They just weren\u2019t using these tools to really understand how bad things were\u2014and how quickly things were heading in the wrong direction.\u201d<\/p>\n To Mazzone\u2019s point, while federal policy uncertainty is challenging short-term planning, many institutions now making budget cuts have significant underlying issues.<\/p>\n What\u2019s Kelchen\u2019s advice for colleges and universities struggling with present uncertainty\u2014including those navigating longer-term financial woes? Prepare multiple budget scenarios \u201cranging from something close to business as usual to the possibility of losing most federal funding.\u201d<\/p>\n Institutions will get \u201csome answers on what actual revenues look like as the start of a new academic year draws nearer, but this will take time,\u201d he said. Those in stronger positions can \u201coperate more at business as usual and absorb losses if needed. But if there is underlying weakness, colleges need to budget for the worst right now and hope for something better.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" Economic uncertainty\u2014the kind that dominated headlines for the first half of 2025\u2014makes long-term financial planning difficult. But nearly two in three college and university chief business officers say that uncertainty surrounding federal policy for higher education is hindering their ability to conduct even basic financial planning. That\u2019s according to Inside Higher Ed\u2019s forthcoming annual survey<\/p>\n","protected":false},"author":1,"featured_media":10711,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[57],"tags":[3792,535,319,3791,328,3785],"class_list":{"0":"post-10710","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-education","8":"tag-budgeting","9":"tag-college","10":"tag-federal","11":"tag-impacting","12":"tag-policy","13":"tag-uncertainty"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/10710","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10710"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/10710\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/10711"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10710"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10710"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10710"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}