UO faces $65 million budget cut, freezes hiring amid enrollment decline

Hiring at the University of Oregon has been frozen, most pay increases are on hold, and President Karl Scholz says the campus now needs to cut about $65 million to avoid an ongoing annual budget deficit. The pressure is being driven by enrollment, with Scholz warning that the university expects significantly fewer incoming out-of-state freshmen next year.

Scholz said in a May 14 message to the campus community that roughly 80% of the university’s Education & General Fund budget comes from tuition revenue, and that out-of-state students and families are the biggest contributor. That makes gaps in nonresident enrollment especially painful, because those dollars help support the cost of educating in-state students and keep day-to-day operations moving across the University of Oregon campus.

The immediate response reached beyond accounting lines. Hiring was frozen, most pay increases were paused, and only raises that had already been committed will continue. Scholz said the university will spend the next six months working with the University Senate, students, faculty and other partners, and that no final decisions will be made over the summer. Updates are expected mid-summer, mid-fall and near the end of fall term, leaving departments and employees in Eugene with months of uncertainty before the full impact is clear.

The cuts also come with real local consequences. Service Employees International Union represents about 1,500 classified staff at UO, including workers in health care, facilities, administrative support, dining services and information technology. Those jobs anchor student services on campus and also feed into the broader Eugene economy through rent, groceries, gas and downtown spending. Classified staff have already said a prolonged wage freeze would make it harder to keep up with Lane County living costs.

This is not the first round of belt-tightening. UO’s September 2025 reduction package totaled $29.2 million in recurring savings and eliminated 176 positions, including 59 vacant jobs and 117 filled positions. At the same board meeting, trustees were told net tuition revenue made up almost 76.5% of Education & General Fund revenue, while compensation costs accounted for 79.1% of expenses and were rising 6.9%. The University of Oregon Board of Trustees later approved a $1.54 billion operating budget for fiscal year 2026.

Scholz has framed the latest round as a structural correction, not a one-year squeeze. In a May 2025 message, he and Provost Christopher P. Long had already pointed to federal research-funding disruptions, limited state support, compensation costs, PERS costs and shortfalls in nonresident enrollment projections. Oregon legislators later warned that proposed cuts could damage UO’s reputation and make it harder to recruit academic talent, while a University Senate open letter with more than 600 signatures described an information vacuum and a veil of secrecy.