MSU eyes $85 million in cuts, fewer staff over federal funding reductions

• MSU wants to cut its budget by $85 million over the next two years
• The belt-tightening is partly in response to federal research funding cuts
• The budget cuts won’t affect student financial aid

Michigan State University is girding for potential hiring reductions and elimination of academic programs, due in part to cuts in federal funding support from the administration of President Donald Trump.

Leadership at the public university has ordered academic departments to cut 6% from their budgets for the upcoming 2025-2026 budget, and another 3% in the following year. In total, MSU aims to trim $85 million over the two-year span from a general fund budget of more than $1.7 billion.

“Federal changes are compounding our existing financial challenges, including our ongoing efforts to balance the university’s budget,” MSU President Kevin Guskiewicz wrote to staff and faculty May 5.

“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.

The move is an initial but expected response to cuts to research funding and program support from the federal government, with the economic ripples impacting all corners of research universities such as MSU, the University of Michigan and Wayne State University.

Citizens Research Council, projects a more than $200 million direct loss for Michigan universities as a result of research grants cuts since Trump took office in January

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The cuts are part of government-wide funding decreases the Trump administration has championed as a way of trimming the federal budget.

MSU has lost more than $80 million in federal research funding so far, out of a total of about $474 million.

The proposed budget cuts will not impact financial aid, according to spokesperson Amber McCann, as well as “items that, if cut, would harm the core mission of the university, pose legal or regulatory issues, or otherwise do more damage than the targeted cut would ultimately produce.”

In the College of Social Science, Dean Brent Donnellan told staff and faculty that new hiring would be slowed or in some cases halted. 

“All new hires (regardless of funding sources) will be closely monitored by Central Administrative Offices and we expect additional oversight of hires and associated delays,” Donnellan wrote. “I wish the financial picture was more optimistic.”

Some of the cuts are likely to come from “permanently ending underperforming programs, services, or activities,“ according to Donnellan. Cutting underperforming programs typically means eliminating academic majors and graduate student programs with small enrollments.

McCann told Bridge Michigan the federal cuts are not the only reason for the belt-tightening, citing rising health care costs.

“Michigan State University has faced financial challenges in the past, and we remain confident in our ability to overcome the challenges ahead,” McCann said.