Update on Georgetown’s FY 2026 Financial Status

Dear Georgetown University Faculty and Staff,

Earlier today, I held two town halls on the university’s financial condition. Here were the key messages:

• Our financial belt-tightening stabilized our financial situation this year.
  
• Financial harms continue – federal research funding volatility, the elimination of Grad PLUS loans, declining graduate enrollment, and rising operational costs.
  
• For the next several years, we do not see improvements in this situation. The university must take a more structural approach: reducing costs in a more targeted way while simultaneously building new sources of revenue.
  
• These changes allow us to properly support the core functions of the university.
  
• Pending approval from the Board of Directors, we will implement a salary-increase pool of 3% for eligible faculty and staff, affecting compensation starting July 1, 2026.

More detail on these points:

FY 2026 Financial Position

Our cost-cutting efforts did not reach our $100 million target, but at the same time our estimates of revenue losses were a bit too pessimistic. The result is that we have achieved our primary objective: avoiding a deficit and stabilizing our financial position.

That outcome is due directly to the difficult steps taken across the university—slowing hiring, reducing expenditures, and pausing merit increases.

FY 2027 and Beyond

As we move forward, it is clear that the approach we have relied on—across-the-board reductions, hiring constraints, and temporary controls—cannot serve as a long-term strategy. Over time, such measures limit our ability to invest and innovate.

We are therefore shifting to a more structural approach: reducing costs in a targeted way while simultaneously building new sources of revenue.

In December, we asked the community to contribute ideas for increasing revenue and improving efficiency. More than 200 submissions were received. In consultation with a faculty contingency group, we are considering advancing a number of these proposals—including new graduate programs, expanded certificate offerings, and administrative streamlining efforts designed to reduce cost and generate new revenue.

This work is already underway. Our Deans are working with University leadership to engage in difficult but necessary decisions to reduce expenses. These are not easy choices, but they are essential to ensure that our resources are aligned with our highest priorities.

At the same time, we are investing in growth. We are expanding uses of the Capitol Campus as a means to facilitate greater revenue, strengthen graduate and professional offerings, and diversify research funding beyond federal sources.

Investing in Our Community

Importantly, the combination of targeted cost reductions and new revenue generation allows us to begin returning to the university’s standard annual merit process.

Pending Board approval, the university will allocate funding that will allow campuses to devote up to 3% of their compensation budget toward a pool for salary adjustments, position reclassifications, and performance-based merit increases for all faculty, staff and AAPs beginning July 1, 2026. More information and answers to frequently asked questions are available online.

To sustain this, we will need to foster a culture of continuous innovation and disciplined resource management.

Looking Ahead

The strength of Georgetown’s academic enterprise remains clear. We continue to see exceptional student achievement—from Fulbright and Rhodes Scholars, to national recognition for faculty scholarship, from Guggenheims and Carnegies and creative work. Our researchers are making important discoveries, and philanthropic momentum remains strong.

We have a clear mission and a community deeply committed to Georgetown’s future. With focus and shared purpose, we can build a more sustainable and innovative model for the years ahead.

Thank you for your resilience, your dedication, and your contributions to this work.

Sincerely,

Robert M. Groves
Interim President