Stanford University has implemented a staff hiring freeze due to uncertainties in federal funding and potential tax hikes on university endowments.
Many of the nation’s top schools have also temporarily paused hiring including MIT, University of California, Harvard, Notre Dame, University of Pennsylvania, Cornell, Notre Dame, University of Washington and more.
The National Institutes of Health is looking to dramatically reduce the payments it makes to universities for the indirect costs associated with research. Though this is currently under review by the courts, a cut of this magnitude would have a significant negative budget impact at Stanford. There is also uncertainty about the level of direct federal funding for scientific research as agencies like NIH and NSF face cuts.
There are also Congressional proposals to expand the current endowment tax paid by universities including Stanford. This too would negatively affect Stanford’s finances, because the annual payout from the endowment forms a crucial part of the school’s yearly budget. In particular, the endowment supports roughly two-thirds of the budget for undergraduate and graduate financial aid, as well as a significant portion of faculty salaries, research, and key programs like libraries and student services. Taken together, these are very significant risks to the university.
Stanford’s total endowment was $42.8 billion as of June 30, 2024, with an 8.4% return over the past year.
Stanford says critically needed positions may still be approved by the dean, vice president, or vice provost, though these situations should be limited. Similarly, hiring may continue for positions that are fully funded through externally-sponsored research awards. The freeze does not apply to faculty positions, contingent employees (temporary and casual), or student workers.
