New Measures to Protect GW’s Financial Stability

 Dear Colleagues,

Today, we write first to thank you for your thoughtful engagement as we have continued preparing our FY26 budget. In light of the continuously changing landscape of recent weeks, we want to provide you with an update on GW’s financial state and to review our next steps. Since our April 30 communication regarding initial steps we were implementing to address budget challenges, we regret to report that the financial outlook for FY26 continues to deteriorate for GW and for higher education more broadly.

The Current Situation
Like so many of our peers, we are facing strong political, economic, and demographic headwinds. We know the challenges facing GW are unsettling, even more so because new ones keep emerging. Potential threats include:

• continued reductions in indirect cost recoveries on federal research grants;
• significant changes in the overall federal research landscape;
• constraints on our ability to enroll international students, including recently announced travel bans and slowdowns in visa processing; and
• limitations on federal financial aid and loan programs.

We share your concerns about these policies and the risks they present for GW. We are not alone in dealing with these circumstances. We are personally engaged with colleagues at other universities and in higher education associations to advocate for the reconsideration of these measures. In the meantime, however, we must prepare for a potentially significant financial impact. This is why GW – like many of our peers – is acting now to protect our academic and research enterprise.

Even before these challenges, GW has also had a growing structural deficit in our budget. In recent years, despite our best efforts to increase revenue and contain costs, our expenses have been growing at a faster rate than our revenues, creating a significant gap. From FY22 to FY24, revenue growth has averaged 6.1% while expenses grew at a rate of 6.8%. While this difference might not seem significant, its cumulative effect is an unsustainable compounding deficit.  

These circumstances are driven by challenges within our higher education market sector. Master’s degree enrollments and revenue have been declining for many years, in part due to decreases in international student enrollments, and at this point can no longer be viewed as temporary. We are also seeing real financial uncertainty impact the enrollment decisions of our domestic students and the amount of financial aid they require. This is especially acute here in the DMV, which has experienced drastic reductions in the federal workforce and industry sectors that rely on business with the federal government. At the same time, our expenses have been driven upward by inflation, which has greatly increased our non-compensation expenses such as IT, facilities maintenance, security, energy, food services, and supplies. The cost of efforts to resolve the continuing financial challenges of the MFA is also having an impact. For FY26, we do not see a path forward to closing the gap between revenue and expenses other than to reduce expenses.

Achieving the FY26 Budget
This is a rapidly evolving situation, and thus the measures announced in our April 30 communication will not be sufficient to balance the FY26 budget and to assure the sustainability of the university. In addition to not awarding FY26 merit raises at this time, and implementing the other measures announced in April, effective immediately, we will implement the following measures:

• further reducing administrative and academic unit FY26 budgets, which we recognize will likely lead to some reductions in the number of staff and certain faculty positions, a step we have tried to avoid but cannot any longer;
• a hiring freeze for all staff and faculty positions supported by operational funds until at least October 1, 2025;
• a review by the executive vice president and chief financial officer of all procurement contracts supported by operational funds of $50,000 or more, and a review of our current contracting to identify opportunities to improve efficiency and reduce spending;
• limiting non-essential discretionary expenses such as travel, events, and entertainment;
• reducing planned capital expenditures for buildings and systems; and
• implementing a voluntary temporary salary reduction for the university’s leadership team, including the officers, vice presidents, academic deans, and vice provosts.

Please note that these measures do not apply to positions or expenses funded at least 75% from external grants or from endowed or current-use gift funds, subject to validation of fund availability. Please see the guidance notes at the end of this message for additional information on the hiring freeze.

We recognize with immense gratitude the incredible work being done by faculty and staff at all levels across GW, often under already austere circumstances, in pursuit of our core mission of education, research, patient care, and service. School and unit leaders will work with their teams to ensure that these mission-critical activities are supported while identifying what activities, investments, and discretionary expenses can be deferred given our present circumstances.

We have started to work with school and unit leaders on further revising their FY26 budgets. Our hope is to review the consolidated university budget with school and unit leaders in early August and present a final FY26 budget to the full Board for its approval in early September.

Possibilities for the Future
Despite these present challenges, we have an opportunity to design what we want GW’s future to be. To begin imagining those possibilities, we will engage academic and administrative leaders, governance partners, and colleagues throughout GW to ensure our program offerings and staffing are aligned with institutional priorities, identify ways to improve processes and workflows at GW, modernize operations, and reduce long-term costs. All parts of the university will participate in this evaluation, including schools, other academic units, and administrative divisions.

Importantly, we do not anticipate a significant downsizing of staff or faculty, but equally, we cannot depend on substantial growth in personnel to meet our needs. To be sure workloads are manageable and sustainable, and we are able to capitalize on important opportunities, we need to rethink how we fulfill our education, research, and service responsibilities. We will also explore new revenue streams and partnerships, both at the unit level and across the university, to produce new opportunities for GW. This is a process that will necessarily evolve over the next few years.

While this work will be challenging, it will position us more strongly for the future. In line with our new strategic framework, we will keep looking for ways to work together across the university to improve student success and to expand the scale and impact of our research enterprise. We will find new opportunities to fully leverage the distinct advantages our location in DC provides. We will develop new and better ways to tell the story of GW and its impact on the world, which in turn will help attract the best and brightest to our university, as well as new supporters and partners. Continuing with this work, along with as many annual traditions and celebrations as possible, is important as eventually we will emerge on the other side of this and be even better positioned as a world-class institution of higher education.

Moving Forward Together
Messages like this are not easy to receive – or to deliver. But by collectively pursuing our shared aspirations, we know we can make substantial progress toward stabilizing our financial health and reinforcing our educational foundation. We ask for your patience as we work through these issues. We promise that as we do so, we will work to minimize impacts on colleagues to the extent possible, and we will treat impacted individuals with respect and regard for their privacy and need for support.

Our confidence that we will get through this – and come out better on the other side – is rooted in our belief in you, our colleagues, the faculty, and staff of GW. We cannot adequately express our gratitude and appreciation for your dedication to GW, to our students, and to each other. Together we will keep GW moving forward, bravely and proudly, into its third century.

Sincerely,

Ellen M. Granberg
President

John Lach
Interim Provost and Executive Vice President for Academic Affairs
Professor of Electrical and Computer Engineering

Bruno Fernandes
Executive Vice President, Chief Financial Officer, and Treasurer

Scott M. Mory
Senior Vice President and Chief of Staff

Guidance Notes on the Hiring Freeze

Effective immediately, there is a hiring freeze for all staff and faculty positions supported by operational funds until at least October 1, 2025.

• This freeze does not apply to:
  • pending offers to fill currently posted vacant positions, but other posted positions, approved through the prior Position Management Review process, will be reassessed using that same process;
  • positions funded at least 75% from external grants or from endowed or current-use gift funds, subject to validation of fund availability; and
  • the normal hiring of student employees, although school and unit leaders should be careful to monitor student hiring to avoid a significant increase in hiring of student employees to account for staff reductions.
• This freeze applies to:
  • promotions that involve an increase in salary and to performance-based bonuses unless there is documentation they have already been approved and offered; and
  • the hiring of external temporary staff.

This freeze is not meant to preclude school and unit leaders from implementing reorganizations or restructurings that include the hiring of new positions or the promotion of current employees, so long as they still reduce overall compensation expenses.

With the exception of reviewing prior approved positions in the context of the hiring freeze, the Position Management Review process ended on June 30, 2025. We expect there will be very limited exceptions to the hiring freeze.

School and unit leaders should be in touch with their HR partners with questions or for additional information.