Stanford University campus on May 30, 2023. University officials cited a Trump administration attempt to slash funding for research institutions as well as threats by congressional Republicans to increase the endowment tax.
(Beth LaBerge/KQED)
Stanford University will freeze staff hiring as colleges and research institutions across the U.S. brace themselves for possible cuts to federal funding by the Trump administration.
University President Jonathan Levin and Provost Jenny Martinez said in a letter to the campus community on Wednesday that Stanford hopes to preemptively mitigate potential “financial uncertainties” by taking initial steps to limit its spending.
The freeze will affect hiring for vacant staff positions, which could include service and maintenance roles. It will not, however, affect the hiring of faculty, contract workers or student employees. Hiring for positions that are fully funded through external research awards will also continue.
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University officials cited an attempt by the National Institutes of Health to drastically slash research funding for schools and other institutions, as well as threats by congressional Republicans to increase the endowment tax for private universities that reach a certain annual investment threshold, which would include Stanford.
“Taken together, these are very significant risks to the university,” Levin and Martinez wrote in the letter. “Given uncertainty, we need to take prudent steps to limit spending and ensure that we have flexibility and resilience.”
Stanford student researchers work in a battery lab at the SLAC National Accelerator Laboratory, operated by Stanford University for the U.S. Department of Energy, in Menlo Park on Jan. 29, 2024. The university employs 1,912 staff at SLAC. (Beth LaBerge/KQED)
The NIH funding change, announced Feb. 7, would set a 15% limit on overhead reimbursements to research institutions, which several universities worry could lead to thousands of layoffs and programmatic closures that jeopardize crucial public health research. Those funds, also known as indirect cost reimbursements, are typically used to pay for non-research-related operating costs such as waste disposal and lab equipment.
A federal judge in Massachusetts temporarily blocked the policy change the day it was set to take effect after California and several other states filed a lawsuit alleging that the proposed cuts violate grant regulations. The pause was extended last week, but it is uncertain whether the policy will ultimately take effect.
Still, Stanford leadership has previously said the university would lose $160 million in federal funding if the policy goes through, possibly affecting its ability to facilitate new research.
“A cut of this magnitude would potentially have deep impacts on medical care, human health, and America’s place in the world as the leader of biomedical research,” Stanford administrators said in a Feb. 8 statement.
Other universities were similarly concerned after the policy was announced. The University of California, which received over $2 billion in contract and grant funding last year, said the change to indirect cost reimbursements could result in the loss of hundreds of millions of dollars a year.
However, the possible loss of federal funding is not the only issue facing major private universities. A stepped-up endowment tax would be a major hit for Stanford, which has the third-largest endowment of any school in the United States at $37.6 billion.
The current tax rate on university endowments is 1.4% for private schools with at least 500 students, but some Republican members of Congress are pushing to increase the tax rate. A bill introduced by Rep. Troy Nehls (R–Texas) would raise the endowment tax rate to 21%. Another one forwarded by Rep. Mike Lawler (R–New York) would bring it up to 10% but would lower the threshold to include more schools.
Stanford’s endowment pays for two-thirds of its budget for undergraduate and graduate financial aid. It also funds faculty salaries, research initiatives and other programs such as libraries and student services.
Other schools are also announcing hiring freezes in response to recent threats to funding. While a spokesperson for UC Berkeley said he is not aware of any discussions about a possible hiring freeze there, other UC campuses, including UC San Diego, have also paused hiring for staff and faculty positions.
