The University System of Maryland is facing significant financial pressure that could lead to employee layoffs, according to its chancellor. In a recent address to a state legislative committee, Chancellor Jay Perman stated that a combination of state budget reductions and federal grant cancellations has created a “crippling” financial situation for the state's public universities.
Over the past two years, the university system has seen its state funding reduced by $233 million. This issue is compounded by a sharp decline in federal research funding that is also impacting private institutions like Johns Hopkins University, which has extended its hiring freeze in response.
Key Takeaways
- The University System of Maryland has experienced $233 million in state budget cuts over the last two years.
- Federal actions have led to widespread cancellation of research grants, with projected system-wide losses of $70 million to $150 million annually.
- Johns Hopkins University reports a 50% decline in research funding and has continued a university-wide hiring freeze.
- Both public and private universities in Maryland are seeing a decline in international student enrollment, adding to financial strain.
- University officials have warned that future budget cuts will likely impact personnel, potentially leading to layoffs.
State and Federal Pressures Mount on University Budgets
University System of Maryland (USM) Chancellor Jay Perman delivered a stark message to state lawmakers on Monday, outlining the severe financial challenges confronting the state's public higher education institutions. The system, which operates with a total budget of nearly $8 billion, has absorbed $233 million in state funding reductions over a 24-month period.
Perman explained that these cuts have been made worse by policy changes at the federal level. Reductions in federal grants, financial aid, and support for international students have created a dual financial threat. He told legislators that the university system has already made significant cuts to its operational expenses to manage previous budget shortfalls.
“We’ve already slashed nonpersonnel operating expenses to address earlier state cuts, meaning future cuts would harm our people,” Perman stated. “We don’t want to do it and we know you don’t want it either, but pressure on our revenue is real and it’s crippling.”
The uncertainty has made financial planning difficult. Ellen Herbst, the system’s vice chancellor for administration and finance, noted that the budget for the upcoming fiscal year has not been finalized. “There’s so much uncertainty right now,” Herbst said, citing concerns with both the broader economy and the federal administration.
Widespread Cancellation of Federal Research Grants
The financial strain is not limited to state funding. Both public and private universities in Maryland are reporting a substantial loss of federal research grants, a critical source of revenue and support for academic programs. According to Perman, the cancellation of these grants has impacted multiple campuses within the USM.
Grant Cancellations by Campus
- University of Maryland, Baltimore: Lost 37 grants valued at $48 million.
- University of Maryland, College Park: Lost 60 grants valued at $30 million.
- University of Maryland, Baltimore County (UMBC): Lost 30 grants valued at $22 million.
Perman added that some universities are experiencing drops of up to 54% in the awarding of grant continuations. In total, the system projects annual losses ranging from $70 million to $150 million, depending on final reimbursement rates. This puts the positions of approximately 2,200 graduate research assistants at risk. “This will do real damage to our pipeline of the next generation of researchers,” Perman warned.
Johns Hopkins University Faces Similar Challenges
The issue extends beyond the public university system. In a communication to the campus community, Johns Hopkins University President Ron Daniels announced the continuation of a hiring freeze that began in June. He cited a “significant decline in the number of new research awards across all federal agencies” as a primary reason.
From January through mid-September, Johns Hopkins received 40% fewer research awards compared to the same period in 2024, which represents a funding decline of about 50%. The total value of the university's federal research grant portfolio has decreased by more than $500 million compared to the previous year. This figure does not include an additional $800 million lost from USAID cuts.
Impact on Students and Programs
The budget shortfalls are expected to have a direct impact on students and specialized academic programs throughout Maryland. The U.S. Department of Education recently announced the cancellation of discretionary grants for minority-serving institutions. This decision directly affects several Maryland universities, including UMBC, the University of Maryland Global Campus, and the University of Baltimore, which may face additional staff reductions.
Declining International Enrollment
A decline in international students is another factor contributing to the financial squeeze. The University System of Maryland reported a 5% decrease this fall among its approximately 12,000 international students. Chancellor Perman anticipates this trend will worsen, predicting “a dramatic drop in international enrollment” next year.
Johns Hopkins, which enrolls the largest number of international students in the state, is also seeing a downturn. According to President Daniels, the university has experienced an 8% decline in the enrollment of new international graduate students across all its programs.
As university leaders navigate these financial difficulties, the focus remains on mitigating the impact on students and staff. However, with significant revenue streams under pressure from both state and federal sources, officials caution that difficult decisions, including potential layoffs, may become unavoidable in the coming months.
