An update on the university’s financial outlook amid federal uncertainty

‌Dear Johns Hopkins University Community, 

‌As the university marks the start of its 150th anniversary, there is much to celebrate—not only in the enduring contributions we have made to so many fields of scholarly endeavor, but also in the generations of students we have educated, the patients we have healed, and the communities we have strengthened. We have done so with constancy and conviction even through moments that tested our resilience. 

For the last several months we have been managing a series of challenges to the longstanding partnership between America’s research universities and the federal government. As we shared in June, these challenges have placed considerable strain on many of our divisions and the university as a whole. 

We write now to update you on these trends and to let you know that the financial mitigation actions that we took in June will continue through the fall.

Federal policy changes and impacts

Given our university’s enduring success in securing merit-based research funding, a decline in federal research support continues to be the most notable budgetary trend affecting the institution. In addition to the cancellation of more than 80 existing federal grants, we are seeing a significant decline in the number of new research awards across all federal agencies. From January through mid-September, as compared to the same time period in 2024, Johns Hopkins has received 40% fewer awards (representing a decline of ~50% less research funding). This means that the total value of our federal research grant portfolio has declined by more than $500 million compared with this time last year, excluding the USAID reductions shared previously. 

In addition, while our overall enrollment has held steady, we have seen a decline of 8% in enrollment of new international graduate students universitywide, with larger drops in some programs. We are also preparing for the elimination of the federal Grad PLUS loan program, effective next July, which could affect access to financial aid for some of our graduate students. We remain committed to providing the best possible education to our students despite these challenges, with world-leading faculty, support, and facilities available to all who choose to pursue their educational goals here at Johns Hopkins.

Importantly, the effects of these challenges are uneven across our divisions, with some experiencing significant, immediate impacts, and others experiencing lesser effects. We are working closely with each division to develop plans that are both consistent with the university’s overall approach and tailored to the specific divisional context. We also are pleased to be able to continue the university’s funding of the Pivot, Bridge, and PhD & Postdoc Completion grants announced previously, and we remain as committed as ever to ensuring that our graduate students can pursue their Hopkins educational programs uninterrupted.

In light of these challenges and the uncertainty we are facing together, we will continue our posture of prudence and measured action. We are maintaining the temporary budgetary measures announced in June: continuing the hiring freeze for staff positions, with exceptions for those that are mission-critical; limiting discretionary spending; slowing some capital projects; and pausing, for the time being, most annual compensation increases. All of our divisions are continuing the contingency planning that began in the spring to prepare for further challenges on the horizon, and some are taking near-term steps to address shortfalls. In addition, we are pressing forward with universitywide and divisional efforts to identify cost savings, efficiencies, and revenue opportunities. 

Further changes we are watching

There is much that remains uncertain with respect to federal research funding, especially as we approach the end of the federal government’s fiscal year on Sept. 30. Reports out of Washington, and NIH in particular, suggest that there is an effort underway to accelerate the pace of research awards this month. Although at Hopkins we remain significantly behind in NIH funding for the year, we have seen an uptick in new award activity from NIH in recent weeks. We will closely monitor the situation across all federal agencies as the government closes the books on this fiscal year. And we are planning for the possibility of a temporary government shutdown, as we have in the past, if agreement is not reached to keep the government running past Sept. 30.

We are also participating in discussions about how best to modify the government’s approach to funding research-related facilities and administrative costs (known as F&A or indirect costs). As you know, this funding is essential for our research—it supports equipment and instrumentation, laboratories, safety measures, IT infrastructure, and expert personnel. Several federal agencies have moved to dramatically cut F&A reimbursement rates for universities, and in February we joined a group of our peers, led by the Association of American Universities, to successfully block this move in court.

But that is only a temporary solution, and if the attempted 15% cap were ultimately to prevail, Hopkins could experience a 75% reduction (a loss of more than $300 million annually) in these vital research expenses. To help secure a long-term resolution, we are part of a broad coalition of universities and other research organizations that are vigorously advocating for an alternative approach, called the FAIR model, which would make appropriate reforms but still provide vital federal research support.

Finally, earlier this summer, the administration issued an executive order on “Improving Oversight of Federal Grantmaking,” which introduced the possibility of further significant changes to federal research funding, including potential disruption of the scientific peer-review model for reviewing and selecting grant recipients. The peer-review system ensures that national funding is awarded to the best proposals and has long recognized the great strength of Johns Hopkins colleagues’ research. We are watching closely for any changes that might undermine these merit-based awards and working with a bipartisan group of stakeholders and elected officials to champion our research.

We will keep you apprised of developments on these and other issues on our Research Saves Lives website, and we plan to hold a universitywide virtual briefing on the financial situation in the coming weeks, after the close of the federal fiscal year.

We are grateful for the partnership, flexibility, and creativity our community has shown in managing through this ever-evolving landscape as One University. And, again, as we begin to mark our 150th year, thank you for your commitment to the mission and the ongoing work that fuels this remarkable university.

Sincerely,

Ron Daniels
President

‌Ray Jayawardhana
Provost and Professor of Physics and Astronomy

‌Laurent Heller
Executive Vice President for Finance & Administration‌