Michigan State University will need to make "hard decisions" to "adjust (its) financial path" amid financial troubles, University President Kevin Guskiewicz announced Monday.
Cuts to higher education funding by the federal government are "compounding” the university’s existing financial challenges, Guskiewicz wrote in a message to faculty and staff. Since January, the Trump administration has slashed tens of millions of dollars in federal funding for research and humanitarian aid projects at MSU. In April, the university announced it would reallocate $15 million from its restricted endowment to support some of that research.
Still, cuts have exacerbated ongoing financial challenges for MSU, such as the rising cost of health care for employees — something other universities and companies have struggled with in recent years, the president wrote.
"After careful deliberation, we have reached the difficult conclusion that we must adjust our financial path," Guskiewicz wrote.
In the coming days, deans and other unit leaders will be told actions they need to take to "put the university back on a healthy financial track." Guskiewicz wrote that campus leaders have been reviewing college and unit budgets, vacant positions, nonpersonnel expenses and enrollment trends for individual units.
"The next few months of financial planning will be demanding and difficult for some in our community, and we will need to make hard decisions that will impact people we care about," he wrote.
Campus leaders have also been evaluating options for the upcoming year’s budget set to be voted on in June.
The university operated on a budget of $3.6 billion during the 2024-2025 academic year. At the time, MSU Senior Vice President and Chief Financial Officer and Treasurer Lisa Frace characterized the budget as responsible and helping advance the university’s goals. More than half the university’s expenditures went toward employee salaries, wages and benefits.
Guskiewicz brought up the university’s finances in one of his first community letters as president in March 2024, writing that he was comprehensively assessing MSU’s financial health and how to best invest its resources to "achieve operational excellence."
In March 2025, MSU launched a $4 billion fundraising campaign, the university’s most ambitious campaign in its history, that is expected to conclude in 2032.
Budgetary concerns had been raised throughout this year regarding plans to construct a $150 million sports arena in South campus and news that the school’s athletic department has operated at a financial loss four out of the past five years.
At the meeting where he voted against the arena plans, Trustee Mike Balow raised concerns about the project’s funding coming from the university general fund, which he said already faced "significant stressors."
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