UD, facing a $20 million to $40 million budget gap, freezes hiring, halts pay reviews, curbs capital projects

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The University of Delaware has taken steps to reduce costs, including staff hiring, a pay freeze, and curbs on capital spending as it deals with a budget shortfall.

“Recently, however, despite meeting our enrollment targets for FY24, further increases in scholarship needs and education delivery costs, especially escalating health care expenditures, have accelerated budget pressures,” UD President Dennis Assanis wrote in a letter to the university community. In the letter, Assanis cited a proposed double-digit increase in state healthcare premiums as a concern. The shortfall is estimated to be between $20 million and $40 million.

UD has operating revenues of $1.2 billion and a nearly $1.8 billion endowment. Employment is nearly 5,000.

UD issued the following statement in response to an inquiry on the shortfall.

“Higher education institutions across the country are having to navigate both near- and long-term financial challenges. In a message to University faculty and staff, President Assanis articulated the significance of proactive control measures that the University of Delaware is implementing in order to best contain these challenges, while supporting sustained excellence in academics and operations. These steps represent a strategic approach toward balancing, conserving and growing University resources as we continue to provide the high-quality education that our students expect from UD both now and into the future.”

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Communications resulting from the austerity measures cautioned those hiring faculty to take care in making an offer. If the first candidate turns down the position and the second choice is not as good a fit, the hiring process should be paused during the fiscal year. Temporary faculty hires will not be authorized unless the position is tied to revenue.

The letter also suggested that offers of employment should list a start date of July 1, 2024, with offers taken back for those who have not yet accepted.

Staff reviews for those not covered under contracts are put on hold. The letter advised administrators and staff to delay travel beyond the fiscal year.

Capital spending will be curbed with deferred projects and no new vehicle purchases. Development activities will continue but with careful planning and ties to outcomes considered, the letter indicated.

Cost-cutting measures at universities typically lead to calls to tap into the endowment. However, tapping the endowment is seen as a last-ditch effort since donors do not want to see their contributions used to plug budget gaps in operating expenses.

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