Budget Cuts at Princeton University: What We Can Expect

On May 4, Princeton University President Christopher Eisgruber announced that the impact of the COVID-19 pandemic on the university’s revenue streams has led to the need for “tough choices" and "financial discipline” in the months ahead. “We spend at a rate such that, absent growth, the entire endowment would be gone in 20 years,” he wrote in an email addressed to the University community. With over 60 percent of the University’s yearly operating revenue stemming from the endowment, which sat close to $25 billion as of March 2019, spending anything “more than 6 percent”—the current status quo in light of the pandemic—is “not sustainable,” he wrote.Eisgruber’s remarks come a month after Provost Deborah Prentice announced in an Apr. 8 email to faculty and staff that the University budget will face “reductions and tradeoffs” given the uncertainty posed by the health crisis.“We do not know when we will be able to resume normal operations,” she wrote, prompting speculation among the student body about what to expect in the fall.Nassau Hall’s budgeting announcements arrive amid a wave of unprecedented budgetary decisions nationwide. At some schools, staff have been let go; in others, larger endowments have provided some breathing room to provide employees with temporary support. To better understand what the budgeting announcement really means for Princeton University, the University Press Club conducted interviews with administrators, staff, and students about each of the expected outcomes listed in Prentice’s original email. Here’s what we found.

CLAIM 1: A suspension of faculty and staff salary increases

Some exceptions are being made for increases required by previous agreement "including in relation to faculty promotion and retention,” Deputy Spokesperson Michael Hotchkiss said in an email to the Press Club. Beyond these previous agreements, however, faculty and staff can expect salary increases to be temporarily suspended in light of the crisis.The prearranged salary increases also pertain to some contractual staff who are unionized with the local chapter of the Service Employees International Union (SEIU), according to Rich Wilder, vice-president and treasurer of SEIU Local 175. These increases, arranged through the University’s Merit Increase Program—which grants salary increases based on staff performance ratings and the size of the merit pool—will take effect on Jul. 1, he said.

CLAIM 2: A suspension of hiring new faculty and staff for permanent and term positions beyond “exceptional” cases

“We’ll honor the [job] offers that have already been made and accepted, but new offers may need to be canceled or postponed,” wrote Pedro Meira Monteiro, Chair of the Spanish and Portuguese Department, in an email to the Press Club. The job offers that will be honored will include those made to visiting professors who have already been hired to teach in the fall of 2020.“Lecturers and visitors will continue to be renewed and hired on an as-needed basis, as usual,” said Hotchkiss. In his May 4 announcement, Eisgruber wrote that if the fall semester were to be moved online, the University will be hiring additional preceptors and teaching assistants “to fortify” the personal engagement between students, faculty, and teaching assistants—“the heart of Princeton’s teaching model.”“We are making these investments because they are critical to our mission and essential even at a time of great economic distress,” he continued. “Meeting these needs, however, requires strict budget discipline and trade-offs across the University.” For assistant professors that are on the tenure track, the University has decided to approve a one-year extension of the tenure clock in an attempt to assuage the impact of the pandemic. "The extension is opt-out, so it will apply to all current assistant professors whose review for tenure is scheduled to take place in the academic year 2020-21 or later,” Hotchkiss wrote in an email.As the pandemic evolves, many of the decisions pertaining to the 2020-2021 academic year are being taken up by the Academic Year 2021 Coordinating Committee, which includes Katherine Stanton, Director of the McGraw Center for Teaching and Learning; Jay Dominick, Vice President for Information Technology; and Pablo Debenedetti, the University’s Dean for Research, among others.

CLAIM 3: “Decreased dependence” on those working in temporary, hourly, casual, or contracted positions across campus as well as “better leverage” of the existing workforce

In a Apr. 16 letter to the editor in NJ.com signed by 49 Princeton graduate students, a trio of MPA students in the Woodrow Wilson School for Public and International Affairs expressed concerns that the recent policies would negatively affect temp or contractual workers. They were concerned that the workers would be placed “in a position of extreme hardship” if they lost their wages.“These workers maintain our infrastructure, sanitize our spaces, and ensure that we are fed,” wrote Molly Brune, Sujata Rajpurohit, and Maggie Tennis. “They are risking their lives to safeguard our welfare. Will Princeton protect them?”The letter urged the University to use its endowment to continue paying workers during the pandemic. The assumption that the University would not do so caused a strong pushback on social media—which included a comment from MSNBC anchor Stephanie Ruhle, who tweeted on Apr. 18: "Dear @Princeton... Please tell me the reports are wrong. Please tell me a school with a $29.5BN TAX FREE ENDOWMENT is NOT laying off service workers. WE HAVE THE MONEY TO COVER THIS." The tweet, which received upwards of 25,000 'likes,' is no longer available on Twitter. In response to Ruhle, the University tweeted that it "never had any plans" to lay off the school's service workers, to which Ruhle replied: "THIS IS EXCELLENT NEWS."In response to the letter published in NJ.com, Lianne Sullivan-Crowley, Vice President for Human Resources at Princeton University, wrote a Letter to the Editor two days later “to correct some misimpressions left by [the Apr. 16 letter] concerning who on our campus may be affected and how.”“The overwhelming majority of our employees, including those who work in dining services, maintenance, custodial services, and other campus services, are in regular staff roles,” Sullivan-Crowley wrote, “and therefore are not among the small number of positions we have asked our managers to assess as we head into the summer.”Markham Walton has worked in landscaping, grounds, and horticulture at Princeton University for sixteen years. As of mid-April, he said not much seems to have changed after the announcement.“Everybody’s still staffed the same,” he said. “There haven’t been any cuts in our department, nor do I see there being any within our department [moving forward].”According to Walton, workers are being paid their regular wages despite the fact that they are working fewer hours. Under a new skeleton crew system, only one supervisor and four workers show up to each shift.As of mid-April, Walton has been working once every eight working days. “They make sure that you’re alone, that you have space… you get your job assignment and you go for the day,” he said. Joining Walton are other workers at Princeton who work in hourly, casual, or contracted positions throughout the school year. These positions include those who work in facilities, campus dining, mail services, athletics, and in programs with contracted lecturers such as the Princeton Writing Program. Many of Princeton’s contracted workers—including Walton—are unionized with SEIU, which is on contract with the University until 2024.Workers who are not unionized with the SEIU include those in the library system, the Department of Public Safety, and graduate students who teach classes. “At this time, the University has been really good. Nobody has lost a penny of pay. But we all know that this can’t be sustained forever,” said Wilder, who is also the Senior Storage Facilitator at 755 Alexander Road. In response to the Provost's announcement, he said, “we would work with the University in order to save as many people's employment as we possibly can.” Asked how the changes will affect campus workers, Wilder says he has “no idea.” “We’re hoping for the best,” he said. “The best would be, everybody goes back to work, everything goes back to normal. But that doesn't look like a reality at this time."

CLAIM 4: Cutting “all non-essential spending” in units across campus

“Every dollar we can save now will give us more flexibility to support our core priorities as the long-term economic picture becomes clearer,” Prentice wrote in her announcement. “All ideas are welcome, and no amount of savings is too small for us to pursue.”Monteiro of the Spanish and Portuguese Department believes that from the standpoint of an academic department, it is difficult “to clearly separate what is essential from what is non-essential.”“The events are the first thing that come to my mind as something that we can more easily adjust,” he said. “In [the Spanish and Portuguese Department] we have a productive and sometimes hectic program of varied events, and we’ll need to adapt to the new normal.”The main adjustments he foresees are reductions in events and guest visits. For example, the Spanish and Portuguese department has had to postpone their plans to launch an artist-in-residence program in the fall. However, Monteiro believes that these changes will have a minimal impact on students’ educational experience.“We’ll do our best to protect our mission in teaching and research,” he said. “This means that whenever possible, we’ll keep funding research, be it at the graduate or undergraduate level.” Although travel is off the books for now due to the University’s travel restrictions, the department is still funding student requests to conduct research remotely over the summer.As for the Grounds department, the cancellation of Reunions and Commencement has significantly reduced the work—as well as the spending—that is usually demanded at this time of year. Campus Dining did not respond to queries for comment by the time of this article's publication. 

Bonus: What has the CARES Act got to do with campus funding?

In response to the financial hardships posed by the public health crisis, the United States Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in January, which included a Higher Education Emergency Relief Fund. The funds provided through this initiative were designed to “defray expenses” incurred by institutions that would have directly impacted students’ cost of attendance, including factors such as food, housing, course materials, technology, health care, and child care. Princeton University decided not to accept the funding that had been allocated to the University, claiming that its financial aid packages and other programs were already sufficient “to provide exceptional levels of support to our students.” By doing so, it joined a host of other Ivy League schools including Harvard University, Yale University, and the University of Pennsylvania that also rejected the funding. Harvard received severe backlash after initially accepting the payment. “We remain committed to providing this support,” Princeton University officials wrote in a statement on Apr. 22. “We have also taken steps to meet additional needs resulting from COVID-19, and will continue to look for opportunities to do so throughout this crisis.”

What do students think?

As students and faculty grapple with an unpredictable fall semester, some University members have expressed disapproval of Eisgruber’s announcements. “President Eisgruber's letter to the Princeton community today tried to appease us, but it only made me feel more concerned,” wrote Grace Collins ‘21, in a public Facebook post. “He seems to be casting Princeton as a university on the verge of financial crisis, when the fact is that Princeton is going to come out of the COVID-19 crisis far, far safer than many members of our community, particularly our low-income students and staff workers..”Other students turned to Twitter to express their frustrations.“When will [Princeton University] read the ROOM and stop sending these whack emails,” tweeted Zizi Coleman ‘22 on May 6. “I basically tweet out of sudden bursts of emotion,” explained Coleman, who was already “overwhelmed” by the transition between the end of classes and reading period. Given the uncertainties and anxieties she has been hearing about among fellow peers, “the portion of the email that spoke about how Princeton is unable to dip into the endowment not only felt a little out of touch, but it also felt like the University cares more about the 4-year graduation rate and financial status than student wellbeing,” she wrote in a text to the Press Club.Other students turned to humor to make their point. “Chris Eisgruber, President of Princeton University, takes home a salary of $971,000 a year. That is 30x the graduate student stipend. The question is who would you rather have ‘in the service of humanity?’” tweeted the Princeton Graduate Student Union as part of a Twitter poll. As of May 6, 27 out of 29 Twitter users had voted for the option ‘30 Graduate Students’ against ‘Eis man (not a superhero)’.Sophia Cai '21 contributed to the editing of this piece. Stay tuned to the University Press Club blog for more COVID-19 related coverage coming out of Princeton University.