As financial outlook darkens, colleges cut staff, programs ahead of new school year

Howard University’s move to disenroll some 500 first-year students who had not met a tuition payment deadline weeks before the start of the fall semester is bringing renewed attention to colleges’ financial challenges and the decisions being taken to address them.Universities are facing a looming drop in enrollment due to declining birth rates, along with a decline in federal funding and the loss of many full-tuition-paying foreign students who are struggling to get visas. In response, they are cutting faculty and staff, eliminating majors, and pruning electives to control costs. They’re also focusing on the income side of the equation – including, as in Howard’s case, going after students who fail to pay tuition or meet financial aid deadlines.Howard’s interim president, Wayne Fredrick, said in a statement that the decision reflected “our responsibility to ensure that students begin their Howard experience with a documented and sustainable financial plan.” Without one, they were less likely to complete their degrees, he added. Eventually the school, based in Washington, D.C., reenrolled more than 200 of the students. Why We Wrote This Colleges are cutting programs and staff heading into a new school year. They are under pressure from falling enrollment, reduced federal support, and a loss of international students. Last week, Howard offered buyout packages to 16% of its faculty and staff, potentially hundreds of employees.The financial challenges are hitting colleges of all sizes, and at all levels of selectivity.In April, Syracuse University offered buyouts to about 175 faculty members. The University of Texas at Arlington saw 209 faculty and staff take buyouts in May. Last month, University of Texas at Tyler offered buyouts to nearly a quarter of its workforce. Even schools with billion-dollar endowments are making adjustments: The Harvard Crimson college newspaper reported that dozens of employees had been laid off last week at Harvard University’s Faculty of Arts and Sciences.“I think we’re in a period where a decent number of schools are going to be struggling financially and for a variety of reasons,” says Phillip Levine, a nonresident senior fellow at The Brookings Institution, and an economics professor at Wellesley College. “Enrolling students and generating enough revenue to cover their bills is something that many schools need to be concerned about in the coming years.”Building pressureA sharp drop in birth rates in the United States means there will be fewer high school graduates entering college each year, a phenomenon dubbed the “enrollment cliff.” The applicant pool is already shrinking for some, but not all, schools and it’s creating financial instability. Some tuition-dependent small schools have closed, while other, larger schools have announced revenue declines, leading to program cuts and layoffs.Additionally, efforts by the Trump administration to prevent international students from studying in the U.S. has wiped out a source of income – as most foreign students, unlike most Americans, generally pay full tuition. Cuts in federal funding and research have put additional strains on universities.Mr. Levine adds that it’s too soon to gauge the impact of the 2025 One Big Beautiful Bill Act, which made significant changes to financial aid. The bill capped federal loans that parents could take out for their children’s college education at $20,000 per year or $65,000 for lifetime borrowing. Previously parents were allowed to borrow the entire amount needed for their children to attend college. Likewise, loans used for graduate and professional schools, which previously had no ceiling on borrowing, were capped at $100,000 lifetime borrowing for nonprofessional programs, and $200,000 for professional programs such as dentistry, medical or law school.Howard mentioned changes in federal student aid as one of several reasons for the employee buyout offer. At HBCUs (historically Black colleges and universities), 70% of students are eligible for Pell Grants, the federal government’s need-based undergraduate financial aid.United Negro College Fund President and CEO Michael Lomax told NPR that both students and colleges are under pressure to meet their financial obligations. “The reality is that Howard, just like everybody else, has to pay their bills, and the people who attend the institution have to pay theirs,” said Dr. Lomax, who previously served as president of Dillard University, an HBCU in New Orleans.Tough road aheadExperts say higher education is entering a period of turbulence unlike any it has seen before.In addition to offering buyouts, Syracuse announced that it was cutting 93 of its academic programs, though the school said that was the result of a review of its offerings, not a cost-cutting measure.In July, Temple University laid off about 40 staff members as it tries to address an $85 million budget deficit for the 2026-27 school year. It was the second straight year of layoffs at the school. In 2025 it eliminated 190 positions. School leaders blame steady enrollment decline and a state appropriation that has stayed the same since 2018.The financial strains haven’t spared any schools, says Professor Levine – but that doesn’t mean the pinch will be felt equally across the board.Highly selective and wealthy Ivy League schools will be fine, he says. So will most mid-tier, or moderately selective schools like Syracuse.But lower-tier schools and smaller schools, he predicts, “will have difficulty surviving.”When Howard disenrolled its students, the school’s interim president said the school could no longer afford to let payments slide until students proved that they had the scholarships or grants to cover costs, as it used to do.“We have really allowed students to show up without paying us [and] to carry balances beyond what is appropriate,” Dr. Frederick told CNN.That leniency affected retention. Dr. Frederick said that Howard has a four-year graduation rate of 70% and that retention has dipped primarily because of students’ inability to pay.“Across higher education, students who enroll without a realistic plan to meet their educational expenses are significantly more likely to experience financial hardship, interrupt their studies, or leave college before earning a degree,” Dr. Frederick said. “We have a responsibility to help students persist, graduate, and thrive.”