University of Chicago leaders said Tuesday a yearslong effort to close a $288 million structural deficit is on track, with the gap expected to shrink to about $140 million by June.<\/p>\n
U. of C. President Paul Alivisatos, Provost Katherine Baicker and chief financial officer Ivan Samstein addressed faculty and staff at Ida Noyes Hall, 1212 E. 59th St., offering updates on the university\u2019s financial health amid uncertainty over federal research grants, a potential economic downturn<\/a> and a unionization drive announced the previous day by workers at the University of Chicago Press. Campus leaders also outlined plans to use artificial intelligence to trim administrative costs and said staff would see their first meaningful pay raises in years.<\/p>\n The administration projected the deficit would fall by about 20% from last year, from roughly $173 million in fiscal year 2025 to around $140 million by the close of fiscal year 2026.<\/p>\n \u201cWe\u2019ll have more than halved the deficit over two years into a four-year plan,\u201d Samstein said. \u201cWe feel very good about the trajectory.\u201d<\/p>\n The goal for fiscal year 2027 is to bring the deficit below $100 million, Baicker said. The university is sending budget targets to academic and support units with instructions to find roughly $50 million in additional savings and revenue gains.<\/p>\n \u201cThat is going to be an ambitious but achievable goal for everyone around campus,\u201d Baicker said.<\/p>\n But some faculty have questioned whether trimming the deficit at the same pace is sustainable<\/a>.<\/p>\n Early deficit reductions came heavily from restricting spending growth, including early retirement incentives for faculty, hundreds of<\/a> layoffs and a pause on doctoral admissions<\/a> for many graduate programs.\u00a0<\/p>\n The focus going forward, Baicker said, will shift toward growing revenues through expanded master\u2019s degree programs, executive education, summer enrollment and philanthropic donations, which are expanding, according to presentation slides. Alivisatos said the university is on track for another record fundraising year, following a record of more than $1.02 billion in fiscal year 2025.<\/p>\n \u201cWe\u2019re on track for an extremely strong year again in the development space,\u201d Alivisatos said.<\/p>\n Philanthropic giving tends to track the performance of financial markets, Samstein said, with donors giving more during economic booms<\/a> than busts. The S&P 500, a major U.S. stock index, has grown more than 40% in the past two years alone.<\/p>\n While the outlook is optimistic, the university is still grappling with an estimated $2 billion in deferred maintenance, concentrated largely in its historic quadrangle buildings, many more than a century old. Samstein said the figure reflects years of underinvestment in the university\u2019s oldest structures and that upcoming fundraising will focus heavily on addressing it.<\/p>\n After years of near-frozen compensation, university leaders said units will have room to give merit increases in the 2% to 3% range in the next budget cycle, which they view as important for staff retention.<\/p>\n \u201cWe\u2019ve been fortunate to have fantastic staff and have very low attrition,\u201d Samstein said.\u00a0<\/p>\n On the status of federal research grants \u2014 which make up about 14% of the university\u2019s revenue \u2014 Alivisatos said that while Congress has so far resisted the deep cuts proposed by the White House, uncertainty around the timing and priorities of the grantmaking agencies remains.<\/p>\n \u201cSteadfastly the Congress, both House and Senate, have restored\u201d funding levels, he said, although he acknowledged unresolved questions about whether appropriated funds would flow as expected.\u00a0<\/p>\n The Trump administration has tried to withhold<\/a> or delay billions in congressionally approved funding despite a court ruling ordering it to do so.<\/p>\n Baicker said the university\u2019s original plan had assumed 4% to 5% annual growth in National Institutes of Health and National Science Foundation (NSF) funding but has since revised those projections downward to \u201csomething that looks a little flatter than that.\u201d<\/p>\n The federal government shutdown earlier this year halted grant awards for several months, and Baicker said it remains unclear whether the backlog will be made up before the university\u2019s June 30 fiscal year ends. Last year, grant awards by the NSF were slow in the winter and spring months before picking up dramatically<\/a> mid-summer as the end of the federal fiscal year approached.<\/p>\n Samstein also pointed to artificial intelligence as a growing tool for trimming administrative costs without cutting headcount.\u00a0<\/p>\n \u201cThere are a lot of opportunities, some of which we\u2019ve begun to harness,\u201d he said.\u00a0<\/p>\n Samstein described a recently deployed system that monitors \u201cpayroll exceptions,\u201d cases where human error causes incorrect pay.<\/p>\n \u201cWe\u2019ve been using AI to teach it little by little each month to read these exceptions before they happen,\u201d he said. \u201cIf we can eliminate all that work and the displeasure for the person who was affected, all the better.\u201d<\/p>\n