Oregon is back under heavy financial pressure, with leaders moving to trim another $65 million from the budget as the university’s overall reductions for the year edge close to $100 million. The latest cut comes after months of falling out-of-state enrollment and weaker tuition revenue, deepening a problem the school has been trying to contain for some time.
University president Karl Scholz shared the update in an email sent to the whole university on May 14. He explained that fewer out-of-state students are joining the university, and that is hurting tuition income because those students pay much higher fees than in-state students.
Because of lower revenue, the university immediately stopped new hiring, paused “pay action” like raises or position changes, and limited unnecessary travel spending. The university is trying to save money quickly while it plans its next steps.
Scholz said the university did not want to keep making small budget cuts every single year. He explained that taking “smaller steps matching short-run expenses with revenues” could lead to another financial crisis next year. Instead, he wanted the university to focus on “clear, long-term solutions to address root causes.”
Their money problems became much worse compared to last year. In fall 2025, the university already cut $29.2 million from its budget, which makes it a total reduction of around $100 million. They also laid off 60 employees to save money for the 2025-26 school year. Later, three of those workers got their jobs back after the union challenged the layoffs through arbitration.
This problem arises because other universities are attracting more students, and Oregon is clearly failing to compete. Vice President for Enrollment Management Derek Kindle warned back in September that this year’s student recruitment process could be “one of the toughest” he had seen in more than 20 years. He explained that schools like California’s public university system were also competing hard for the same students.
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Right now, out-of-state students make up about 44% of undergraduate students at the university. But officials are worried those numbers could drop even more in the future, which would create bigger financial problems because out-of-state students pay much higher tuition. This budget cut announcement is already taking a massive hit on university staff.
Religious studies professor Jeff Schroeder called the news “extremely disturbing news” and said he feared “many more devastating layoffs.” On top of that, Schroeder also criticized university leaders for how they handled past budget problems. He said cutting academic programs and staff seemed to be their “first instinct” whenever money problems come, instead of looking at “administrative bloat.”
Now, the university is trying to take steps towards tackling the situation and making sure that they function properly.
Oregon takes a major step toward tackling budget issues
Karl Scholz said university leaders will spend the next six months working with the University Senate and other partners to find new ways to improve how the university operates. He said they want the university to stay “nimble, disciplined, and focused on strengths,” meaning they want the school to stay flexible, careful with money, and focused on the things it does best.
Scholz explained that two main goals will guide future decisions. First, the university plans to invest more money in its strongest research programs and hire people carefully so the school can become known for leadership and excellence in important research areas.
Second, the university wants to improve the overall student experience and make the University of Oregon a better and more attractive place for students to study. Scholz also said the university may ask donors and supporters for more financial help through its upcoming fundraising campaign. The next few months will show whether the university can slow the cuts and steady its finances.
