With enrollment declining, Brandeis is in a growing budget crunch

WALTHAM – Brandeis University stands out in the world of higher education for its combination of an intimate, liberal arts sensibility and a powerful research operation that produces scientific breakthroughs and wins Nobel Prizes.

But what has worked for Brandeis for decades can also have a negative impact: Its unique character has long forced the school to live on the edge of its budget, drawing on the tuition of a few thousand students and a mid-sized endowment to keep up with Institutions that are many times more expensive to compete in size.

Now, amid widespread financial woes in higher education and declining enrollment particularly at the Brandeis school, the Waltham school finds itself in a deepening budget crisis and trying to stave off what some may see as the start of a long-term decline.

“Its finances are just very tight relative to its mission,” said Larry Ladd, a higher education finance and governance expert at the Association of Governing Boards of Universities and Colleges.

Graduate student enrollment has plummeted, the university's national ranking, which helps it attract international students who pay full tuition, has plummeted, and as of this semester, undergraduate enrollment has fallen.

Financial pressures led to mass layoffs over the summer, hiring freezes and spending cuts, a halt to plans for a new academic facility, a normally large draw on the foundation to subsidize operations and, for the first time in a decade, a budget deficit and cash drain at the end of the past academic year.

Morale among students and faculty has taken a hit. “Brandeis, we are so embarrassed,” read the headline of a student newspaper editorial about the financial woes last month. Then, on September 25, President Ronald Liebowitz resigned, effective November 1, following a vote of no confidence from the faculty that cited, among other things, the school's financial problems.

“I did this with mixed emotions because this is an extraordinary institution,” he said in a statement.

The financial challenges are not unique to Brandeis. Schools across the country are grappling with declining enrollment, rising costs and frantic competition for students with new dorms, cafeterias and other expensive amenities. Many are now financially strained and some small liberal arts colleges have closed.

Select universities like Brandeis were less vulnerable to the general malaise in higher education. But Brandeis is unique. It was founded in 1948 by the American Jewish community to help Jews and other groups who faced discrimination in higher education. And although it is relatively small, Brandeis is a major research institution, with four faculty members or alumni winning a Nobel Prize since 2003.

But its younger age, size and research focus make it vulnerable: There are no generations of alumni donors like Ivy League schools. Unlike many other large research institutions, it has fewer than 5,500 students and does not have the tens of thousands of tuition-paying students that other schools rely on to cover costs.

“We all know we have headwinds in higher education. We have particular headwinds at Brandeis,” Liebowitz said in April.

These headwinds have increased particularly sharply in the past academic year.

In a confidential May presentation obtained by the Globe, Chief Financial Officer Samuel Solomon said the “(b)largest reason for underperformance” was a decline in graduate student tuition, which has fallen 46 percent since 2019.

Student enrollment, which represents a much larger source of income, was stable — until the fall. The new freshman class was about 100 students short of the annual goal of 900. That has raised concerns among Brandeis leaders that student revenue could also decline.

“The problem is that the deficits from one class carry over every year, and if we continue to have class deficits, that number grows,” said a senior Brandeis administrator, who requested anonymity because he was not authorized to comment .

The shortage arose after an academic year when the Liebowitz and Brandeis board promoted the school as a refuge for Jewish students concerned about campus anti-Semitism in the wake of the Israel-Hamas war. The board supported Liebowitz because he held a pro-Israel stance and took a hard line against elements of pro-Palestinian activism that it viewed as anti-Semitic.

Ulka Anjaria, a Brandeis English professor, said faculty morale has taken a hit because it appears students are less interested in attending Brandeis than they once were. The school's decline in US News and World Report rankings from a high of No. 35 in 2019 to No. 63 in the latest edition hasn't helped. Part of the decline was caused by a change in the grading rubric that generally benefited large public universities and hurt schools like Brandeis that prioritize small class sizes.

“The placements are not unproblematic. We are definitely not complying with it,” said Anjaria. But it's disheartening, she said, to see universities that Brandeis sees as its competitors, like Northeastern and Tufts, coming out ahead. And a lower ranking can have a negative impact on revenue by discouraging students from participating.

Brandeis executives say the current financial difficulties are part of normal ups and downs and not a sign of a decline.

The smaller first-grade class comes after the final classes exceeded the goal of 900 students. That means a total of 40 students, or 1 percent of students, are missing, said Stewart Uretsky, executive vice president of finance and administration at Brandeis.

The $8 million cash loss for fiscal year 2024 was “due largely to costs associated with commencing preliminary design work on two buildings.” One of those projects was the science facility, which is “temporarily paused” but is “restarting,” he said. The other is a planned 650-bed dormitory.

The differently calculated budget deficit was $1.7 million out of a total budget of more than $400 million.

“We are similar to many nonprofit institutions that generate a relatively low operating margin,” Uretsky said. Although it was “slightly negative” for fiscal 2024, which ended in June, “it was slightly positive for the nine previous years,” he said.

But Brandeis' needs are much greater than what the current deficit reflects. Internally, executives have concluded that they should spend tens of millions more on salaries, facilities and maintenance and use less of endowment funds just to remain competitive – but they can't afford to do so. “Our financial problems are an order of magnitude worse,” said the administrator, who has access to the school’s finances.

Uretsky said: “Any imbalance in our finances…” . . demonstrates that we are an ambitious institution filled with faculty, staff and students who strive to expand their knowledge and that we must make responsible decisions to operate within our means.”

For fiscal year 2025, the university is spending 7 percent of the value of its $1.2 billion endowment. Nonprofits generally aim to spend less than 5 percent of their endowment per year. Uretsky said the 7 percent decline was “at the high end of an acceptable range, not outside.”

The editorial board of The Justice, the student newspaper, said that Brandeis' buildings, many of which date to the mid-century, are “falling apart.” Emergency repairs are common, the board wrote.

Since 2016, Brandeis has increased its capital budget by 50 percent, Uretsky said.

Liebowitz, the outgoing president, said in April that over Brandeis' 76 years, “everything has rightly been reinvested in the academic program.” . . The University has done a remarkable job investing and reinvesting in this research effort. But ultimately it comes at the expense of what other investments didn't make. So when you look at the campus infrastructure, we lack the amenities.”

“These are the challenges for Brandeis: to remain academically excellent and also to remain competitive with all the other aspirations of this particular generation,” he said.

Hilary Burns of the Globe contributed to this report.