Portland State University will lay off faculty and is considering closing departments.
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The financial problems of two Oregon universities have gained attention this month as state leaders continue to voice concerns about budget problems at all public institutions of higher education.
In January, the state’s Higher Education Coordinating Commission approved a report recommending that community colleges and universities pursue “institutional integration”—from shared services and programs to full integration. The document warned that “on the current path universities will be forced to continue to make significant cuts every year or, in total, fund balances will be completely depleted within three to five years.”
Fast forward to the present: As the federal legislative term winds down, individual agencies face ongoing financial problems.
“The soft enrollment and modest increases in state funding we’ve had over the past few years have not kept pace with cost pressures,” said Ben Cannon, executive director of the Higher Education Coordinating Commission.
State lawmakers recently passed legislation setting aside up to $15 million to provide Southern Oregon University with, as their bill calls, “temporary financial stability”—and another $500,000 to create a “long-term financial sustainability plan” for the institution. The university declared a financial emergency in August, saying it needed to cut costs immediately.
In interviews with reporters, Tina Kotek, the governor of the Democratic Alliance, indicated that she would sign the bill, noting the “financial crisis” of the university. A spokesperson for Southern Oregon said in an email to Within Higher Ed that “the most recent cash flow projections expected a deficit later in 2026.”
Even with the possible bailout, “sober choices” are coming to the university “as we identify those programs and services that best serve our region,” university president Rick Bailey wrote in a letter to the college. A university spokesperson said the $15 million will only address “cash flow issues through June 2027.”
Portland State University did not bail, much to the chagrin of the faculty. Last week, the university announced it was considering eliminating departments and “downsizing” others to address a building deficit it says could exceed $35 million by 2028. It said there will be layoffs.
“The Board of Trustees has directed me to reduce and eliminate the use of our reserves to fund university operations,” PSU president Ann Cudd said in a message to employees.
While the university called state support “inadequate” in a description of the measures on its website, it acknowledged that the state is facing “significant budget pressures of its own.”
“We cannot rely on the government for additional funding, and we cannot close the gap by significantly increasing tuition fees for our students or digging deeper into our reserves,” the statement said.
The university is considering eliminating the Departments of Conflict Resolution and University Studies, which are home to PSU’s general education program, and the Portland campus, which hosts international students studying abroad at PSU. If you cancel a university course, six other departments or schools may be affected: English; physics; sociology; women’s, gender and sexuality studies; School of Art + Art History + Design; and the School of Public Health.
Another 10 departments or schools could be cut: teacher licenses; leadership, learning and mentoring; history; philosophy; School of Earth, Environment and Society; world languages and literature; crime and criminal justice; economics; politics and world affairs; and public administration.
The PSU says it has not yet decided how many layoffs there will be. According to its contract with the full-time faculty union, an arm of the American Association of University Professors, “any full-time, tenure-track positions that are terminated receive 12 months’ notice,” the university said.
All of these changes will be implemented “over the next year,” he said. The center’s spokesperson said that the voters of this center will have time to comment on the plans, and the final plan is expected to be completed in June.
Both universities gave similar explanations for how things are happening: declining students, inadequate government funding and rising costs. (PSU also blamed its location and other factors, writing on its website that it “seen a 23% drop in enrollment since 2019, driven by Portland’s downtown reputation, pandemic-related declines in community college enrollment and evolving state policies affecting international students.”)
PSU-AAUP, the full-time faculty union, criticized the university for not seeking state funding, as Southern Oregon did. In a press release, it said “the Cudd Administration has chosen not to cooperate with the powerful coalition of all public sector unions in the state to achieve its demand for $50M in PSU education stability funds.” (A university spokeswoman confirmed that PSU did not seek a federal bailout.)
“Although Southern Oregon University is ready to receive emergency funding of $ 15 million from Salem, PSU did not ask for the same intervention and is happy to move forward without assistance, ready to cut,” he said.
In a statement, union president Bill Knight said the planned cuts point to “the same death spiral that has plagued us for nearly a decade” and “an inevitable end.”
“This will hurt our ability to grow and cause significant damage to opportunities for students and the support networks they need,” Knight said. “It goes from our operations to the metro area and especially the city of Portland.”
