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Harvard’s Faculty of Arts and Sciences is running an estimated structural deficit of approximately $350 million, a major shortfall that will require a dramatic reworking of its budget, FAS Dean Hopi E. Hoekstra announced in an email to affiliates Tuesday afternoon.
The projected deficit, which is equivalent to roughly 20 percent of the school’s annual operating budget, reflects the recent increase in the federal endowment tax and a rise in long-term operating costs. The figure does not account for uncertainty about the future of federal funding, including potential decreases in federal agency budgets, the number of new grants, and lower reimbursement rates for indirect research costs.
“This imbalance leaves us with little ability to absorb financial shocks or invest strategically in our academic priorities,” Hoekstra wrote in her email, which was sent to FAS faculty and staff. “The scale of the problem requires decisive, long-term action to ensure the continued health and vitality of the FAS.”
The projections come months into an extensive cost-cutting effort at the FAS. The school paused non-essential capital projects, drastically reduced its Ph.D. admission numbers, halted staff hiring, and kept its budget flat for this year amid growing concerns about how the Trump administration’s policies would tighten the school’s budget.
The $350 million estimate was produced by the Faculty Resources Committee, a group that advised the FAS on navigating the 2008 financial crisis and which Hoekstra reconvened in the spring. The committee will present its findings in greater detail during the FAS’s monthly meeting, scheduled for Tuesday afternoon.
Hoekstra wrote that the school will now focus on building “long-term sustainability.” The Task Force on Workforce Planning, announced in the spring, has proposed a “more efficient” administrative model, Hoekstra wrote.
The details on how FAS staffing will be overhauled remain unclear, though when Hoekstra announced the workforce planning task force, she wrote that its recommendations “may include proposals for staff reorganizations and reductions.”
The design phase of the administrative model will start this winter, Hoekstra wrote in her Tuesday message, and continue throughout the spring.
“This is not a moment for short-term belt-tightening, but for making lasting structural changes that strengthen the foundation of the FAS,” Hoekstra wrote.
The FAS ended fiscal year 2025 with an $8 million deficit, according to Hoekstra’s email. Though prior to this year it had not run an annual deficit since 2020, the FAS has continually faced a structural deficit, which means its costs were growing faster than its revenues. Its budget surplus in fiscal year 2023 was $62 million, but that number shrank to just $3 million a year later.
“While lasting change will take time, the earlier we begin to realign our resources with our academic mission, the more time we will have to make deliberate, thoughtful changes that preserve what matters most,” Hoekstra wrote.
—Staff writer William C. Mao can be reached at william.mao@thecrimson.com. Follow him on X @williamcmao.
—Staff writer Veronica H. Paulus can be reached at veronica.paulus@thecrimson.com. Follow her on X @VeronicaHPaulus.
