CMU’s Financial Outlook: Discipline, Decisions and Next Steps

Dear Faculty and Staff:

As the academic year draws to a close, I am writing to share an update on CMU’s financial outlook, the broader environment facing higher education, and the steps we are taking to position the university for continued strength.

Over the past year, we have spoken about the headwinds confronting research universities: pressure on federal research funding, shifting enrollment dynamics, federal policy uncertainty and questions about higher education’s role in our society. In this environment, we have remained focused on navigating complexity with discipline, strengthening relationships with policymakers and partners, and ensuring that CMU’s voice continues to shape national conversations around education, research and innovation.

The challenges facing us are intensifying; at the same time, CMU’s work has never been more relevant. Our strengths at the intersection of technology and society align closely with the needs of our region, our nation and the world.

Here are several key takeaways from this message:

  1. Carnegie Mellon remains on solid financial ground, but with an understanding that continued discipline and collaboration will be essential to preserving our strength.
  2. Thanks to careful stewardship, we have been able to reinstate faculty and staff merit increases this year and have designated May 22 and July 2 as Community Appreciation Days.
  3. Demand for a CMU education remains strong. The incoming undergraduate class has enrolled and is exceptional. Graduate enrollment is more dynamic as academic units monitor yield over the summer.
  4. We are adapting our research enterprise to a changing funding landscape by continuing to pursue large, interdisciplinary opportunities and expanding partnerships with government, industry and philanthropic organizations.

Our Financial Outlook

Our latest financial update confirms that CMU stands on a foundation of remarkable financial strength, even as a more challenging environment requires continued discipline to sustain that position. Credit rating agencies Standard & Poor’s (S&P) and Moody’s have recently affirmed CMU’s strong credit ratings, even as they acknowledge sector-wide challenges. Both agencies cite the university’s extremely strong enterprise profile and disciplined financial management as key strengths that position CMU well in this environment.

We continue to operate with a positive margin, but that margin is narrowing as pressures on graduate enrollment, research revenue and broader operating expenses weigh on the university’s budget.

For FY27, we are planning to advance our highest priorities, including student success and well-being, recruiting and retaining talent, and strengthening the infrastructure and services that expand our capacity to teach, discover and create. Delivering on these priorities will require continued financial discipline — both as a near-term response and as a core element of preserving CMU’s long-term strength.

Our record of careful financial stewardship, coupled with the collective efforts of academic and administrative leaders across the university, enabled us to reinstate faculty and staff merit increases for this year. This decision is a meaningful reflection of our commitment to our people, and I remain deeply grateful for the care, commitment and resilience you bring to your work every day.

As another indication of our appreciation, we are pleased to announce the continuation of our Community Appreciation Days. We have designated both Friday, May 22, 2026, and Thursday, July 2, 2026, as Community Appreciation Days, allowing for additional time off and extended holiday breaks.

Enrollment and Educational Momentum

There is also encouraging news in enrollment. We have yielded an exceptional undergraduate class and are on track to meet our first-year class goal. The quality of this incoming class is a testament to the value of a Carnegie Mellon education and to the extraordinary work of our enrollment management, academic and student affairs teams.

The master’s enrollment picture is more dynamic. Accepted offers are ahead of last year in several areas and domestic applications are up — even as international applications and summer enrollment patterns remain fluid. We will continue to carefully monitor and support programs as they move through the final stages of the cycle. I am deeply grateful to leaders across our schools and colleges whose efforts in program design, marketing and yield are strengthening our competitiveness in an increasingly complex landscape for graduate education.

Advancing Research in a New Environment

The most significant pressure we face continues to be the changing federal research environment. Across the country, universities are experiencing a slowdown in sponsored research funding, and we must be prepared for the possibility that we are facing a new and reduced baseline.

Recent federal developments have added further uncertainty. While Congress rejected significant proposed cuts to research agencies for FY26, the FY27 budget proposal once again includes substantial reductions to science agencies including the National Science Foundation and National Institutes of Health. At the same time, federal agencies are issuing fewer funding opportunities, approving fewer new awards and obligating funds more slowly than in prior years — further constraining the pace of research funding. For example: We are seven months into the current fiscal year, and the NSF has issued 25% of the awards and only 43% of the funding that it obligated, on average, for this same time period over the last five years.

These dynamics are not only affecting near-term funding but also introducing longer-term risks to the U.S. research enterprise — impacting talent pipelines, delaying critical projects and increasing global competition as other nations continue to invest aggressively.

Under Vice President for Research Theresa Mayer’s leadership, a cross-functional team is helping us adapt our research enterprise to these changing conditions, improve how we pursue large and center-scale opportunities, and strengthen the systems that support our faculty and researchers. We are also pursuing new partnership models for working with industry and government.

We are continuing to move ahead with implementing the recommendations from the Presidential Advisory Board on Enterprise Creation, Entrepreneurship and Industry Engagement. That work anticipated many of the challenges now before us and is helping us respond more quickly to opportunities that span research, commercialization and societal impact.

Sustaining Our Strength

Let me be direct: We will need to make disciplined decisions to align resources with our highest priorities, especially in light of increased volatility in research funding, graduate enrollment and the broader economy. We will approach these difficult decisions and tradeoffs thoughtfully and with care for our community. As I mentioned in previous messages, these principles will continue to guide us: maintaining academic and research excellence; supporting our people and community; and securing CMU’s long-term sustainability.

We are also steadfast in our commitment to strengthen our financial and operational enterprise and ensure more integration of systems used across units. We will continue to engage the campus community in efforts to align our people, systems, training and organizational structures to enhance excellence and effectiveness. We have also launched a national search for our next chief financial officer, and we will keep you updated as that effort gains momentum, with the goal of confirming new leadership in the coming months.

Meeting the Moment

Commencement is just around the corner, and with it comes one of the clearest reminders of why our work matters. In the days ahead, we will celebrate the accomplishments of more than 5,800 undergraduate and graduate students — joined by over 10,000 family members and loved ones who will gather with us to mark this extraordinary milestone.

We are thrilled to welcome NVIDIA founder and CEO Jensen Huang as our commencement speaker, to bestow honorary degrees on four outstanding individuals — including Jensen — and to hear from our student speaker, Simi Olusola-Ajayi, who will represent the voice, talent and aspirations of this remarkable class.

The road ahead will require care, focus and adaptability. CMU has a long history of meeting moments like this with clarity and purpose, and I am confident we will do so again.

Thank you for all you continue to do for Carnegie Mellon and for one another. Happy Commencement!

Warm regards,

Farnam Jahanian
President
Henry L. Hillman President’s Chair