An update on our Fiscal Year 2026 financial plan

Colleagues,

Throughout the spring, I have shared that our university faces budget challenges for the upcoming fiscal year. These challenges largely are due to external factors such as disruptions to federal funding, the lack of new state funding, rising costs associated with facilities construction and operations, and the projected nationwide decline in college enrollment.

In addition to these external factors, our Fiscal Year 2026 budget requires important internal commitments to market pay plans on the Lawrence and KU Medical Center campuses to ensure employees are compensated appropriately and competitively, and to the KU Cancer Center and Wichita Biomedical Campus.

Overall, KU continues to be on solid financial ground. But for the reasons mentioned above, we currently forecast a budget shortfall by the end of FY26 if we don’t proactively take corrective action. Specifically, we project a $22.3 million deficit in Lawrence for FY 2026 unless we make immediate adjustments. At KU Medical Center, we project a $4 million deficit for FY 2026 and a $31 million deficit for FY 2027 without corrective action. As a result, we need to begin implementing strategies to reduce costs and generate revenues to achieve a balanced budget in the year ahead.

With this in mind, I invite you to view a video presentation of our FY 2026 financial plan featuring Chief Financial Officer Jeff DeWitt. In his presentation, Jeff summarizes our budget strategies for Lawrence and KU Medical Center, developed in consultation with Executive Vice Chancellors Barbara Bichelmeyer and Steve Stites. In addition to the video, you can view a PowerPoint presentation of the financial plan.

These budget imbalances will require hard decisions in the months ahead. That said, by acting now, we are positioned to act strategically while limiting the impact on core functions.

The big picture

While our immediate concern is FY 2026, we will use this moment to continue addressing long-term challenges facing KU and most other universities. The reality is, higher education is at a crossroads, and universities must develop new financial models for the new world we are in. Universities that do this proactively will have the luxury of developing thoughtful strategies that have the best chance of success.

Despite our challenges, our financial fundamentals are strong, thanks to the hard work we’ve done in recent years to become a more fiscally sound university. Additionally, we are benefitting from a new One KU leadership structure that enables us to address challenges in a more holistic way, and we continue to have terrific partnerships with donors, alumni and lawmakers who believe in our mission.

Most important, we have Jayhawks like you who make this university special through your teaching, service and research. Together, we will address these challenges and emerge a stronger KU.

Respectfully,

Doug

Douglas A. Girod
Chancellor