University System of Maryland Approves 7% Smaller Fiscal 2026 Budget

Strategic Insights -

The University System of Maryland's Board of Regents approved a fiscal 2026 budget that is 7% smaller than last year's allocation, alongside tuition increases of up to 5% and fee hikes of up to 10%. This move aims to trim operating costs and increase revenue to make up for $155 million in reduced funding. The almost $8 billion budget will lead to difficult decisions for the universities, with the Chancellor, Jay Perman, saying that they must make "some difficult decisions as they close their budget gaps." While the system will first seek to generate new revenue and protect employees from cuts, personnel actions cannot be taken off the table due to the sheer size of the cut.

Key Takeaways:

  • The University System of Maryland's fiscal 2026 budget is 7% smaller than last year's allocation, totaling almost $8 billion.
  • The budget reduction follows an almost 4% cut to the University System last year and will make up for $155 million in reduced funding.
  • The system aims to increase revenue to offset losses, including a 2-4% tuition increase for in-state residents, with the University of Maryland, College Park seeing the highest increase of 4%.
  • The system estimates that federal government cuts to research grants and contracts could cost up to $150 million across its campuses.
  • Staff across the University System are drawing up contingency plans for budget scenarios such as lower-than-expected enrollment, further federal funding cuts, or changes to eligibility for federal financial aid.
  • The system receives 29% of its funding from state appropriations, 27% from tuition and fees, and 24% from restricted funds.
  • The regents also voted to approve extending the University of Maryland Global Campus's contract with UMGC Ventures for 18 months while it works to reintegrate the subsidiary back into the university.
  • The system has over 58,000 students receive some form of federal student aid, and any significant eligibility changes could potentially impact enrollment numbers.
  • The system's largest source of financial aid is Pell Grants, covering more than $204 million in aid for about 45,000 students in fiscal 2024.

Statistics:

  • The University System of Maryland's fiscal 2026 budget is 7% smaller than last year's allocation, totaling almost $8 billion.
  • The budget reduction follows an almost 4% cut to the University System last year.
  • The system aims to increase revenue to offset losses, including a 2-4% tuition increase for in-state residents.
  • The system estimates that federal government cuts to research grants and contracts could cost up to $150 million across its campuses.
  • The system receives 29% of its funding from state appropriations, 27% from tuition and fees, and 24% from restricted funds.
  • The system has over 58,000 students receive some form of federal student aid.
  • The system's largest source of financial aid is Pell Grants, covering more than $204 million in aid for about 45,000 students in fiscal 2024.

Sources:

  • "Universities told they should brace for the coming year's 7% budget cut" - Maryland Matters
  • "Regents committee calls for OK of $69 million for time to pull back spun-off businesses" - Maryland Matters
  • "Faculty and university senates must be involved in making these difficult budgetary decisions" - Katherine Wasdin, American Association of University Professors chapter
  • Video message from University System Chancellor Jay Perman to more than 40,000 faculty and staff members, shared with the board on Friday