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Stanford University announced more than $100 million in cuts to its annual budget as well as staff reductions ahead of the 2025-26 academic year. The announcement came in the form of an open letter from university officials on Thursday.
The university’s updated budget plans cut $140 million from its general fund; this does not include the School of Medicine, which will detail its reductions later this summer, university officials said in Thursday’s letter.
The current plan is designed to retain support for need-based financial aid and five-year doctoral student funding, among other university priorities. It comes months after a hiring freeze was implemented in response to growing concerns of federal funding cuts from the Trump administration.
“There is significant uncertainty about how federal support for universities will evolve, but it is clear that the status quo has changed,” President Jonathan Levin and Provost Jenny Martinez wrote in a statement released on Thursday, June 26.
Earlier this year, the Trump administration proposed significant cuts to the National Institutes of Health in its 2026 budget — a move that would imperil billions of dollars in medical research funding allocated by the agency to research institutions nationwide.
The Trump administration also proposed capping at 15% NIH research funding for “indirect costs,” such as the maintenance of buildings, equipment and administrative costs. In February, a Massachusetts federal judge temporarily blocked these policy changes after 22 states, including California, filed a lawsuit.
In addition to the NIH funding cuts, universities face a congressional bill that would raise the endowment tax from 1.4% to 21%. As of last August, Stanford’s endowment was $37.6 billion, $1.8 billion of which was paid out “to support vital academic programs and financial aid during the fiscal year.”
The endowment is the largest source of funding for student financial aid. It also supports research, faculty salaries, libraries, and more, according to a university fact sheet.
If the endowment tax were raised to 21%, Stanford says it would result in an estimated $637 million blow to its annual budget.
As universities attempt to navigate the ever-changing policy landscape, the Trump administration threatens additional cuts in federal contracts and grants to educational institutions that refuse to comply with its agenda.
In April, the Trump administration cut billions of dollars in federal funding to Harvard University. In response, Harvard filed a lawsuit. Several universities, including Stanford, supported that effort in an amicus brief filed earlier this month.
Stanford currently receives $2.2 billion in federal research funding.
As the university weathers the storm ahead, its budget group, composed of faculty and administration, looks to the lessons of the 2008 financial crisis, when the endowment was cut by 25% over two years and the general fund fell by 15%.
“The cuts in the 2008 crisis were extremely painful, but by acting swiftly and decisively, Stanford was able to put itself in a strong position going forward,” Martinez said at a faculty senate meeting on June 12.
“As difficult as this moment is, I am confident Stanford will navigate these challenges in a way that ensures continued excellence in research and education,” Martinez said at the time.
