Monday, June 30, 2025
[Summary: This message provides an update on proposed federal actions that directly impact Yale and describes the magnitude of their potential financial implications. It outlines the steps the university is taking to prepare for these actions and announces a ninety-day pause on hiring.]
Dear Yale Faculty and Staff Colleagues,
In March, we shared an update on the university’s finances, noting potential budgetary challenges facing U.S. institutions of higher education. Much remains uncertain, though the timing and scale of federal actions that would impact Yale and other universities have come into sharper focus. In keeping with our commitment to update the community, we write to share more information about the magnitude of the challenges Yale may face and the decisions we are making now to minimize the impact on our community and our missions.
First, Congress is considering an increased university endowment tax. As outlined in President McInnis’s May 22 message, the U.S. House of Representatives passed legislation proposing to raise the tax from 1.4% to 21%. The latest news reports indicate that the U.S. Senate is deliberating on a new version of the bill that includes an 8% tax. It is unclear what the outcome will be; however, either of these increased tax rates would require Yale to pay the federal government hundreds of millions of dollars more per year, resulting in a significant gap in the funds that make up Yale’s budget.
Second, the federal administration has proposed drastic reductions to federally funded research. Drafts of the federal budget include sharp cuts to agencies that sponsor scientific research and support the arts and humanities at Yale and other U.S. institutions. In fiscal year 2024 alone, Yale faculty and students received approximately $900 million from the federal government to perform important work on behalf of the American public. The grants they were awarded supported, for instance, efforts to develop a quantum computer, advance medical breakthroughs that help infants with heart defects, and identify treatments that prevent diabetes, in addition to other critical endeavors. Deep cuts to federal agencies will limit the funds available to conduct this and other important work.
Additionally, Congress is considering legislation to modify facilities and administrative (F&A) rates. This is likely to result in fewer funds reimbursed to universities for the costs they bear for conducting federally sponsored research. You can read more about these proposals on the provost’s office website.
These and other federal actions under consideration pose substantial threats to the funds that support a wide variety of activities across the university. The funds that would be lost support our work to educate the next generation of leaders and conduct pioneering research and scholarship that benefit society.
Given the gravity of these potential changes, we have decided that it is prudent to implement measures that will afford us greater financial flexibility until we know more about the exact scale, scope, and impact of new federal legislation. To that end, we will implement a ninety-day hiring pause for positions across the university, effective immediately. We do not make this decision lightly, recognizing that recruiting and hiring exceptional faculty and staff play a critical role in advancing our mission. Due to the substantial uncertainties ahead, however, we must focus on supporting our current faculty, students, and staff. The hiring pause will position us to adapt when we fully understand the magnitude of the financial impact on the university.
During this hiring pause, staff positions that are posted as of today, June 30, may continue to move forward; however, unposted positions, including those in process, will be suspended. This action covers new, replacement, casual, and temporary positions. For faculty positions, the relevant dean and provost must approve any new searches initiated during the next ninety days. Grant-funded roles across the university and clinical positions in the School of Medicine are excluded from the hiring pause.
This additional measured action ensures the university remains as financially nimble as possible over the coming months. Other actions that have been included in the fiscal year 2026 budget approved by the board of trustees are:
- Implementation of a 5% reduction in non-salary expenses,
- Delay of several capital building projects, and
- Reduction in the merit pool for annual salary increases that impact faculty and managerial and professional (M&P) staff.
Depending on legislative outcomes, we may need to adjust the budget and take additional actions to further reduce spending. In the coming weeks and months, as the financial picture becomes clearer, we will review our decisions regularly and make changes as circumstances warrant.
Please be assured that as we prepare for these challenges, we are monitoring the legislative process closely. University leaders are vigorously advocating for higher education and Yale by engaging with lawmakers, filing public declarations and amicus briefs, and collaborating with other institutions and coalitions.
Though the historic partnership between institutions of higher education and the federal government is changing, we remain steadfast in our commitment to Yale’s mission. We are grateful for your dedication to the exceptional teaching, world-class research and scholarship, and cutting-edge practice that Yale offers for the benefit of our city, state, nation, and world. Your work improves lives, contributes to a vibrant culture, enhances civic life, and educates the next generation of leaders. Thank you for remaining focused on our shared mission. We pledge to keep you informed about federal activities and any additional actions we need to take.
Sincerely,
Scott Strobel
Provost and Henry Ford II Professor of Molecular Biophysics and Biochemistry
Jack Callahan, Jr.
Senior Vice President for Operations
Stephen Murphy
Vice President for Finance and Chief Financial Officer