Isabela Pacheco

The University suffers under growing financial pressure as costs have increased dramatically in recent decades to compete with universities with larger endowments. In 2023, the University’s budget deficit reached $239 million—8 percent of the University’s $3.14 billion operating expenses. The Maroon has put together an overview of significant events concerning the University’s financial issues over the course of the last year.

November 2023: Professor Raises the Alarm

At a Chicago Center for Contemporary Theory event in November 2023, Classics professor Clifford Ando outlined the findings of a paper he published claiming that the University had abandoned its core focus on liberal arts in an attempt to increase revenues. The event was a discussion between Ando and history professor Jonathan Levy.

“I think we’ve gone far down the road in which the only fields that matter are ones that are essentially isomorphic with particular occupations,” Ando said at the event.

Ando also claimed that mounting debt meant the University was spending nearly $200 million a year paying interest on a debt bill of more than $5.8 billion.

“Any tuition-paying parent at the University of Chicago should ask themselves, ‘Am I one of those parents whose tuition is going to pay for my child’s education? Or am I one of those parents whose tuition is just paying for debt?’ Maybe that will change our admissions,” Ando said.

In response to these financial problems, Ando alleged that the University had limited research spending, froze hiring, and cut departmental budgets. He claimed that this practice has led to a decrease in the number of College classes taught by tenure-track research faculty.

Ando also objected to what he viewed as an emphasis on lucrative pre-professional programs at the expense of humanities and social sciences divisions.

“The goal at UChicago appears to be the transformation of the University into a gleaming network of professional schools with a disfavored and somewhat shabby teaching unit at its heart: the abandonment, in other words, of the idea of the research university that was current at its foundation and which UChicago itself did so much to cement in the national consciousness,” Ando’s report reads.

December 2023: Boyer Responds

In an op-ed in the Maroon, former Dean of the College and current Senior Advisor to the President John Boyer defended the University leadership’s work over the past decades and objected to some of Ando’s claims.

Boyer pointed to an explosion in undergraduate enrollment in recent decades and an improvement of the University’s reputation as primary reasons to be optimistic about the University’s future.

“These structural changes have also allowed the College to strengthen financial aid, to add additional instructional staff, and to contribute powerfully to the financial stability of the University,” Boyer wrote.

Boyer wrote that the University has a long history of pre-professional training and that the expansion of these programs does not contradict the University’s core values. He claimed these programs also allow College students to take advantage of expertise that exist within these schools in their third and fourth years in the College.

While he did acknowledge that this progress has been “very costly from a financial perspective,” Boyer argued that the growth of the undergraduate population should help solve these issues, as alumni of undergraduate programs are often a significant source of revenue for large universities.

Boyer also defended the University’s record on supporting interdisciplinary liberal arts education and research.

“[T]he University has deployed considerable new resources to strengthen faculty scholarly achievements and curricular innovations and to encourage more interdisciplinary research collaborations in the graduate Divisions, both in the Humanities and the Social Sciences, as well as in the Natural Sciences, in Computation, and in Molecular Engineering,” Boyer wrote.

December 2023: University Hosts Budget Town Hall

The Maroon published details from an invite-only town hall meeting held in December 2023 by the University to discuss its budget problems and its plans to address the issue. The University identified rising interest rates, a drop in operating income, and a smaller endowment than comparable universities as some of the primary drivers of the deficit.

In response to these financial pressures, the University initiated a temporary staff hiring freeze, voluntary staff retirement packages, and budget cuts for some programs.

In the presentation, the University echoed many of the points Boyer made in his Maroon op-ed, claiming that these investments, although costly, have allowed the University to compete with better-funded institutions.

Much of the presentation compared the University’s finances to other schools in the “Ivy Plus” group of universities, which includes members of the Ivy League and other highly-ranked universities such as the Massachusetts Institute of Technology and Stanford University. Among these universities, UChicago said it falls on the lower end of the scale for number of faculty positions relative to the size of its endowment.

In the short term, the presentation said the University would work to lower costs, including through the potential closure of certain programs or services. The University also said it would grow revenue through new masters degrees, summer programs, and professional programs. However, the presentation said the long-term solution to its financial issues would be growing its endowment through philanthropic donations.

February 2024: Second Invite-Only Town Hall 

The University held a second invite-only town hall in February 2024 to further outline their plans and hear the concerns of some faculty and staff. The Maroon watched the town hall, which was hosted by President Paul Alivisatos, Provost Katherine Baicker, and Chief Financial Officer Ivan Samstein.

In the town hall, University leadership reiterated many of the points made in the previous forum, including their belief that the University’s investment in recent decades has placed it in a strong position to capitalize on donations from a much larger undergraduate alumni population.

Alivisatos, Baicker, and Samstein each defended the University’s commitment to its core values even as it initiated changes to solve its budget issues.

Baicker said that the University’s plan for cost reduction would focus particularly on central administrative units, including the Communications Office, Office of the Provost, Financial Services, General Council, and Alumni Relations and Development, among others. Although these units make up roughly 15 percent of the University’s budget, the presentation set the goal of sourcing 30 to 40 percent of the necessary expense reductions from these units.

February 2024: The Maroon Interviews Baicker and Samstein

On the day after the town hall, the Maroon interviewed Baicker and Samstein about the University’s financial issues and plans to resolve them. In the interview, Baicker reiterated many of the points made in the town hall but stressed that changes would take time to make a difference in the University’s budget shortfalls.

Samstein emphasized the University’s new focus on fully capitalizing on its campus, especially during the summer.

“If you see our campus in the summer, it’s pretty dramatic… the reduction in people,” Samstein told the Maroon at the time. “If you go to many peer campuses, you’ll see a lot more programming throughout the summer…. I think that’s where the academic enterprise is looking at all the areas where we can grow revenue… but in a way that’s consistent with the academic values.”

Baicker said the University hopes to equalize revenue and costs by 2028.