Stanford faces $140M budget cut amid changing federal funding landscape
Stanford University is preparing for major budget cuts, reducing its general fund by $140 million in the upcoming year. In a message to faculty and staff, university leaders linked the decision to shifting federal policies, which are putting new strain on higher education funding.
Federal policy shifts lead to major budget shortfall
On June 26, Provost Jenny Martinez and President Jon Levin said the shortfall would impact key areas, including research and endowment support. They also confirmed that job losses are likely, though the university plans to offer compensation and transition resources for affected employees.
“At the same time, we need to be realistic about the current landscape and its consequences. There is significant uncertainty about how federal support for universities will evolve, but it is clear that the status quo has changed,” the letter stated.
Stanford is among the universities feeling the impact of proposed federal cuts to the National Institutes of Health and the National Science Foundation. The NIH’s base funding would drop nearly 40% to $27 billion, while the NSF faces a 56% cut to $3.9 billion. The budget also expects to fund just 7% of competitive grant applications, a move the Association of American Universities said could seriously hurt thousands of researchers.
In March, the Department of Education launched an investigation into whether Stanford and dozens of other schools are following federal civil rights laws. The department’s letter to Stanford highlighted the enforcement of Title VI of the Civil Rights Act, with a special focus on protecting Jewish students on campus. Since colleges and universities receive taxpayer dollars, Secretary of Education Linda McMahon emphasized that this funding is a privilege that can be revoked if institutions fail to follow anti-discriminatory practices.
Stanford outlines priorities and spending cuts
Stanford said its schools and departments have been asked to shape their budgets around four guiding principles: protect the university’s core mission of education and research, preserve need-based aid and graduate support, simplify administrative processes to cut costs and build lasting financial resilience. However, the School of Medicine will not be impacted by budget cuts.
According to Stanford, general funds are used for a wide range of expenses, which will impact every school or unit differently. Other revenue streams, such as endowment payouts, research grants, gifts and program fees, will also determine how individual departments manage the cuts.
Additional measures include continuing the hiring freeze for staff and limiting construction projects to only those deemed essential or externally funded. Faculty hiring will move forward, but at a much slower pace.
“Though the budget reductions in the period ahead will be painful, we are confident that by acting now to put Stanford on stronger and more resilient financial footing, we will be better positioned to pursue excellence and new opportunities going forward,” Levin and Martinez said.
Previous budget shows reliance on funding
During the 2024-25 academic year, Stanford allocated $9.7 billion to support its operations, including teaching, research and programming. The largest share of funding came from health care services at 24%, followed by endowment income at 20% and sponsored research at 17%.
Ella Rae Greene, Editor In Chief
