The University System of Maryland (USM) is confronting a significant financial crisis, with leaders warning that employee layoffs may be necessary to offset hundreds of millions of dollars in state and federal funding reductions. University officials have appealed to state lawmakers for assistance, stating that previous budget cuts have already exhausted non-personnel spending options.
Chancellor Jay Perman addressed the Maryland General Assembly's House Appropriations Committee, outlining the combined impact of reduced state aid, the loss of federal research grants, and declining international student enrollment. The financial pressure is affecting all 12 public universities within the system, with some already forced to eliminate positions.
Key Takeaways
- The University System of Maryland has lost $233 million in state funds over the last two fiscal years.
- Universities in the system have lost a collective $120 million in research grants, largely due to language concerning diversity, equity, and inclusion.
- Coppin State University has already laid off three employees after losing a $3.2 million federal grant.
- University leaders warn that future cuts will directly impact personnel, as non-essential operational expenses have already been slashed.
A System-Wide Financial Strain
During a hearing with state lawmakers, USM Chancellor Jay Perman detailed the extent of the financial challenges. He reported that the system has lost a total of $233 million in state funds over the past two fiscal years alone. Since the 2024 fiscal year, the system's base budget has decreased by more than $210 million.
Perman emphasized that the universities have reached a critical point where further reductions cannot be absorbed by trimming operational costs. He explained that these funds are essential for maintaining the quality of education and research.
"Now, we're cutting dangerously close to the bone," Perman stated. "We've already slashed non-personnel operating expenses to address earlier state cuts, meaning future cuts would harm our people. Our universities would have to look at layoffs."
The chancellor made it clear that raising tuition is not considered a viable solution to the budget shortfall. Instead, he urged legislators to provide the necessary support to prevent staff reductions that could cripple university functions.
Financial Impact by the Numbers
- $233 Million: Total state funds lost over the last two fiscal years.
- $210 Million: Reduction in the base budget since fiscal year 2024.
- $120 Million: Loss in research grants across the system.
Impact on Individual Universities
The funding crisis is not an abstract problem; it is having tangible effects on individual campuses. Several university presidents have confirmed specific grant losses and the resulting consequences.
Coppin State University
Coppin State University President Anthony Jenkins reported that his institution has seen an 11% cut to its state-based budget over the last three years. This long-term reduction has been compounded by a recent, significant loss of federal funding.
The university lost a $3.2 million federal grant that supported The Center for Inclusive Excellence, a program designed to increase the number of Black and brown men working as teachers. As a direct result, the school had to eliminate the three employee positions funded by that grant.
While Jenkins confirmed that further layoffs or furloughs are not immediately planned, he noted that the university is operating on a "thin margin" and could be forced to take such measures if funding cuts continue.
University of Baltimore
The University of Baltimore has also been affected. President Kurt Schmoke confirmed the loss of a $250,000 federal grant. These funds were used to support a recruitment position and to conduct research, both of which are critical to the university's mission and growth.
The Role of Federal Grants
Federal grants are a crucial revenue source for universities, funding everything from scientific research to student support programs and faculty positions. The loss of these grants, particularly large, multi-year awards, can have an immediate and disruptive effect on university operations and staffing.
Multiple Factors Driving the Deficit
The financial problems facing the USM stem from several distinct issues that have converged to create what Chancellor Perman described as a "crippling" pressure on revenues.
Loss of Research Funding
One of the most significant blows has been the loss of $120 million in research grants. According to Perman, these losses are primarily linked to new language in federal funding opportunities related to diversity, equity, and inclusion (DEI) initiatives. This change has made it more difficult for Maryland universities to secure grants that have historically supported major research projects.
Declining International Enrollment
Changes in federal immigration policy are also contributing to the revenue decline. Maryland universities are projecting a 5% decrease in international student enrollment this fall, with further declines anticipated in subsequent years. Because international students typically pay higher tuition rates, this trend directly impacts university budgets.
Changes to Student Aid
Chancellor Perman also highlighted that alterations to federal grants and student loan programs are affecting thousands of students. These changes can reduce the amount of financial aid available, making it more difficult for students to afford their education and potentially leading to lower overall enrollment.
Students and Lawmakers Respond
The potential for layoffs and program cuts has caused concern among students, who rely on faculty and staff for their academic success. Many are already feeling the effects of reduced financial aid.
"There are many great professors here," said Tamera Stanley, a student at Coppin State. "They are amazing. They are always helping me, so to hear that that help might not be there anymore, it's just crazy."
Another student, Kenyae Torrey, noted the impact on her personal finances. "Plenty of grants that I should have received that I haven't, so I have to take out loans and stuff like that to pursue my career," she said.
State lawmakers have acknowledged the gravity of the situation. Maryland Delegate Ben Barnes, who chairs the House Appropriations Committee, recognized the need to fully fund higher education formulas. He indicated that the issue would be a central focus for the committee during the upcoming legislative session.
"To sustain the impact of our education, research, our innovation, we need your support," Perman urged lawmakers, summarizing the system's plea for state intervention.
The future of many programs and employees within the University System of Maryland now depends on the decisions that will be made in the state's capital in the coming months.