News Summary
The University of Southern California (USC) has announced $140 million in budget cuts for the next fiscal year due to a budget deficit exceeding $200 million. Major federal support reductions for research and student aid and decreased fundraising efforts have worsened the financial situation. In addition to these cuts, USC plans to freeze hiring and restrict non-essential expenses, all while navigating an ongoing investigation over allegations of antisemitism. The university aims to secure its financial future without compromising education access for future generations.
Los Angeles, CA – The University of Southern California (USC) has announced a significant plan to implement $140 million in budget cuts for the next fiscal year due to mounting financial challenges. The university is grappling with a budget deficit that has soared to over $200 million for the fiscal year ending June 2024, an increase from $158 million the previous year. The interim president, Beong-Soo Kim, highlighted major shifts in federal support for research and student aid as leading factors contributing to this budget crisis.
In fiscal year 2024, USC will receive approximately $1.35 billion in federal funding, which comprises around $650 million designated for student financial aid and $569 million allocated to research initiatives. This decline in federal support comes amid a backdrop of decreased fundraising efforts at USC, which have further exacerbated the university’s financial strain. Over the last several years, fundraising has diminished, directly affecting USC’s overall financial stability.
Additionally, the university has incurred more than $1 billion in costs linked to a high-profile sexual assault scandal, which has further strained financial resources. As part of the university’s cost-cutting measures, there will be no merit pool raises for most employees in the upcoming fiscal year. Furthermore, USC is actively reviewing its capital projects to pause or eliminate them as a means of controlling its budget.
In its efforts to manage these financial constraints, USC plans to impose restrictions on non-essential business travel, conferences, and entertainment spending. A hiring freeze for staff will also be instituted, with very few critical exceptions for essential roles. In addition, faculty hiring will face significant reductions across all schools within USC.
The university is considering selling unused properties and streamlining operations to better manage expenses and alleviate the fiscal burden. Beong-Soo Kim emphasized that the university cannot rely on increasing tuition, drawing down its endowment, or incurring more debt to tackle the deficit without jeopardizing future generations’ access to quality education. This decision reflects a conscious effort to maintain long-term financial health.
USC is currently under investigation by the U.S. Department of Education concerning allegations related to antisemitism, which may expose the institution to additional pressures from federal authorities. The cost-cutting measures USC is implementing align with trends observed at other prominent research universities facing similar financial hurdles brought on by declining federal funding.
Many institutions of higher education have responded to this evolving landscape with layoffs and hiring freezes, reflecting broader economic uncertainties. Employees within USC have reported low morale as a result of the financial turmoil and the potential for job cuts, leading to an environment of anxiety among staff and faculty.
While the university has not disclosed the specific number of layoffs or which departments will be impacted, Kim expressed a commitment to navigat ethe challenges ahead. These difficult decisions are aimed at strengthening USC’s financial foundation and preserving its academic mission for the years to come.
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Additional Resources
- Higher Ed Dive
- Forbes
- Los Angeles Times
- USC Annenberg Media
- The Guardian
- Wikipedia: University of Southern California
- Google Search: University of Southern California budget cuts
- Google Scholar: University of Southern California financial issues
- Encyclopedia Britannica: University of Southern California
- Google News: University of Southern California budget deficit
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