If it feels like every few weeks there's a new headline about a university cutting majors or laying off staff, that's not your imagination. It's also not just happening at small, struggling colleges you've never heard of -- USC has laid off more than 1,000 employees since mid-2025, and Stanford, Harvard, and Yale are all citing new financial pressure of their own. Different schools are being squeezed for different reasons, but several real, independently verifiable pressures are landing on higher education's budgets at the same time.

It's not one problem -- it's several stacking at once

Tuition revenue is shrinking even as sticker prices rise. Private nonprofit colleges are now discounting tuition at a record 57.1% for incoming first-year students (NACUBO, 2025-26) -- meaning for every dollar of listed tuition, the average school actually collects about 43 cents. That discounting is so aggressive that net tuition revenue per student actually fell 1.9% after inflation industry-wide, even though headline prices keep climbing.

International student enrollment has collapsed. New international student enrollment fell roughly 17-20% between fall 2025 and spring 2026, driven largely by visa restrictions -- F-1 visa issuances were down 36% year-over-year as of March 2026. International students typically pay full price with no institutional aid, so they've long cross-subsidized other students; NAFSA estimates the drop has already cost U.S. colleges over $1 billion in lost revenue.

Federal research funding has dropped sharply. NIH awards are down roughly 29% and NSF awards down about 50% in 2025 compared to recent years, with billions in grants frozen or ended. Johns Hopkins, a major research university, laid off more than 100 employees after its federal research funding fell by over $500 million in a single year.

A new federal tax now hits large endowments directly. The 2025 tax and spending law raised the endowment tax from a flat 1.4% to a tiered rate reaching 8% for schools with more than $2 million in endowment assets per student -- a group that includes Harvard, Yale, Stanford, Princeton, and MIT. Schools in this bracket are already citing the tax, which takes full effect in 2026, as one factor behind hiring freezes and budget cuts.

State funding for public universities has been declining for years, pushing many public schools to lean harder on tuition right as enrollment is also falling in a lot of states -- exactly the dynamic covered in our piece on the shrinking college-age population.

Why majors specifically get targeted

When a university needs to cut costs, low-enrollment programs are usually first on the list -- they cost roughly the same to staff and administer per student as a large program, without generating comparable tuition revenue. That's why language departments, smaller humanities majors, and specialized programs tend to get cut before high-enrollment majors like business, nursing, or computer science, regardless of the academic value of what's being eliminated. It's a budget-math decision about enrollment numbers, not a judgment about which fields matter.

A concrete case: West Virginia University, 2023

WVU is the clearest, most-documented example of how this plays out. Facing a $45 million budget deficit -- built up over a decade of declining state funding combined with roughly 5,000 fewer students enrolled -- WVU's Board of Governors approved eliminating 28 degree programs (10 undergraduate, 18 graduate) and 143 faculty positions in fall 2023. The cuts included the university's entire World Languages department (though a handful of language-teaching positions were kept so students could still take some courses as electives) and about a third of the Education department's faculty. It's a preview of the same math now playing out at dozens of other schools: falling state support plus falling enrollment equals a deficit that gets closed by cutting the programs with the fewest students in them.

This is no longer just a small-college problem

The pattern used to be mostly about small, tuition-dependent private colleges without big endowments -- some of which have closed outright, including three within a five-month stretch of 2026 alone, covered in our piece on the real warning signs a college might close, alongside our piece on liberal arts college ROI. That's still happening. But 2025-2026 added a second track: well-resourced universities getting hit by research-funding cuts and the new endowment tax specifically because they're large and wealthy. USC ended fiscal year 2025 with an operating deficit over $200 million (up from $158 million the year before) and has laid off over 1,000 employees since; Stanford announced roughly $140 million in budget cuts; Temple is managing a $60 million structural deficit. These are not schools at risk of closing, but they're cutting jobs and programs for the first time in years -- for reasons that have little to do with the traditional "small school, shrinking enrollment" story.

What this means for you

  • A well-known or well-endowed name doesn't mean immunity from cuts right now. Elite research universities are trimming budgets for different reasons (research funding, the new endowment tax) than small colleges are (enrollment, tuition dependency) -- check a specific school's recent news rather than assuming size or prestige protects it.
  • If you're set on a specific, smaller major (a language, a niche humanities field, a small specialized program), ask the department directly about its enrollment trend and whether it's under review -- these are exactly the programs most likely to be cut for budget reasons, regardless of teaching quality.
  • A pattern of hiring freezes, unfilled faculty positions, or larger-than-usual introductory classes can be an early signal of budget pressure before a formal cut is ever announced.
  • This is a separate risk from outright closure. A financially stressed large university is unlikely to close, but the specific program or department you're interested in can still be eliminated out from under you -- it's worth asking about program-level stability, not just institutional survival.

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