2025 Budget Address to the University Senate

A recording of the address can be viewed at rutgers.edu.

Jonathan Holloway
President, Rutgers, The State University of New Jersey

February 14, 2025

Thank you for offering me this, my fourth and final opportunity to speak to you about Rutgers’ financial condition. I have appreciated the attention you have given to me and to our university’s budget. Thank you for being partners in instituting this tradition of sharing an annual financial update—one that I hope has been meaningful and will continue. And let me also take this moment to thank you once again for the Senate’s commitment to academic freedom, and the virtual conference you held on this topic last week.

Today, as I do each year, I will provide a broad overview of the university’s revenues and expenses for the current fiscal year and then focus on a few particular areas of opportunity and concern.

Of course, I recognize that things are happening quickly at the federal level, and I will briefly discuss the uncertainties that the first few weeks of the second Trump Administration have created for higher education generally and for Rutgers more specifically. This address is meant to be about the university, and so I will keep it focused on the big picture, but we have aspired to keep the senate informed of our efforts, and I am happy to answer what questions I can in Q&A.

Let me start with a reminder of the excellence that exists across this university:

• Once again U.S. News rankings placed Camden, Newark, and New Brunswick among the nation’s Top 50 public universities, and the top 25 in the country for our Pell graduation rates.
• For the first time, we have a Schwartzman Scholar from all three locations—Chino Anyanwu from Newark, Tania Martinez from Camden, and Nina Gohel from New Brunswick.
• Among the many achievements of our 600,000 living alumni, actor Sebastian Stan just won a Golden Globe award and has been nominated for an Academy Award.
• Rutgers faculty continue to take their place in prestigious national academic organizations—including Thomas Nosker in the National Academy of Inventors, Drew Gitomer in the National Academy of Education, Shawna Hudson in the National Academy of Medicine, and Nancy Yunhwa Rao, John Keene, and Eileen White in the American Academy of Arts and Sciences.
• Again last year we set a record for research funding and are knocking on the door of the billion-dollar club in terms of annual sponsored research.
• And I had the pleasure of presenting the second annual Presidential Employee Excellence Recognition Awards to staff and faculty members from across all our chancellor-led units for their outstanding work in service to the university, our students, and the broader community.

Now, to the budget.

The University’s primary revenue sources in our $5.6 billion budget for Fiscal Year 2025 are—in order of size—tuition and fees, state appropriations, patient care services, miscellaneous sources, and sponsored research, including federally funded research. Miscellaneous sources include student housing and dining, facility rentals, ticket sales, continuing education, donor gifts, and endowment income.

On the expenditure side, Rutgers primarily spends money on its core missions: instruction and academic support, research, patient care, and public service. Added together, these make up more than three-quarters of our total operating expense budget. In addition to these core missions, we spend 15% for maintaining our buildings and grounds and for university administration, 5% for auxiliary enterprises (such as student housing and dining services), and about 3% for athletics.

Included in the expenditure budget are strategic initiatives, such as the continued commitment of $14 million for faculty hiring and development, $6 million for the Roadmaps for Collective Academic Excellence initiative across all four chancellor-led units, ongoing funding of research initiatives, and support for the Rutgers Future Scholars program.

Capital Projects

Another year has passed with precious few capital dollars available in the university budget. This is not unique to Rutgers, and we continue to leverage outside funding to execute key projects.

In the past year we completed the Brandt Behavioral Treatment Center, funded solely through philanthropy and grants. This two-building project is a cornerstone of the Rutgers Youth Behavioral Health Initiative, and I’m proud to say it is New Jersey’s first treatment facility exclusively for adolescents and young adults backed by an academic health leader like Rutgers.

In the heart of New Brunswick – right across from the train station – the first building of the HELIX redevelopment is roaring toward completion. This building will house the future Rutgers School of Medicine, Rutgers Translational Research, and the New Jersey Innovation Hub. With support from the state and use of tax credits, Rutgers will pay about 33 cents on the dollar for this impactful project.

In Camden, funds from the state are covering over half of the capital costs for the transformational Cooper Street Gateway project. State funds are also supporting construction of new laboratory space in Newark.

Also in Newark, we are working with University Hospital and the state’s Economic Development Authority to undertake significant development on the Rutgers Health campus. Relocations have begun to allow for demolition of eleven buildings, clearing the way for a new Rutgers building—which in turn allows the hospital to construct a new building. This project was recently approved by the Board of Governors, and in this case Rutgers will pay less than a dime on the dollar—perhaps our high point in leveraging non-traditional sources of capital.

Finally, we continue to pursue grant opportunities to make campus enhancements. From state grants for cutting-edge stormwater management in Newark and New Brunswick, to state support for tree planting on all campuses, to a federal grant for dock rebuilding at the Marine Field Station, we continue our path on the new norm of finding outside sources of funds for capital improvements.

We also continue to pursue our climate action plan, which remains a priority for Rutgers. Using president’s strategic funding, the Office of Climate Action has brought together our government affairs, finance, and IP&O teams to explore investments in sustainable initiatives. For example, IP&O is transitioning its fleet from gas-powered vehicles to electric vehicles over the next decade, starting with the replacement of 48 of their 650 vehicles over the next year. They have also developed a plan to expand the number of charging stations both for their vehicles and for use by our faculty, staff, and students.

Financial Sustainability

In my past two budget addresses, I have discussed our multi-year effort to confront and ultimately eliminate a structural deficit that resulted from factors such as higher costs for goods and services, enrollment declines, and pay increases. Our efforts, and it does take all of us, have resulted in a reduction of the actual structural deficit from $88.5 million in fiscal 2023 to $77.6 million in fiscal 2024.

In shrinking the gap, we have had to draw upon reserves along with making operational efficiencies, returning enrollment to pre-Covid levels, and principled increases in tuition, among other things. But we can’t keep drawing upon reserves – they are not infinite. Achieving a healthy balance sheet from year to year, with an appropriate operating margin like that of our peer institutions, requires a long-term strategy.

So that’s what we’ve done. As I discussed with you a year ago, we have developed a plan for financial sustainability, with the input and approval of the Board of Governors. This plan will ensure that we have the long-term ability to fund new initiatives, address deferred maintenance and technology needs, and replenish reserves to rebuild our resiliency.

The plan includes a number of goals across four broad areas: strengthening enrollment; achieving administrative and academic efficiencies; taking advantage of artificial intelligence; and generating new net revenue.

Let me cite a few examples. Within enrollment, we are committed to design the best possible applicant experience, where financial aid packaging, communication, and problem-solving mitigate any external issues. Among the operational-efficiency goals is to establish shared-services frameworks for Rutgers–New Brunswick and the Rutgers School of Medicine. We will explore how best to use AI tools with Oracle and other applications both to automate processes and to improve data analysis. And we will continue to set targets for existing non-academic revenue sources and seek new ones.

Our financial sustainability plan was created in coordination with the university’s senior leaders, who are in many cases designated as the person accountable for progress. For example, Executive Vice Presidents Prabhas Moghe and Mike Gower are accountable for advancing reviews of centers and institutes.  Senior Vice President Michele Norin will ensure accountability for each of our AI-related goals.

Our chancellors are playing a key role in pursuing our enrollment goals.

Fran Conway is leading work around making sure that, as Rutgers benefits from tremendous increases in applications thanks to the Common App, we move applications effectively across our campuses, to fill the entire university and to ensure that our admitted students find the part of the university that can serve them best.

Antonio Tillis is ensuring that the pathways across Rutgers are clear and that barriers that do not serve students are removed. Too often we create barriers between campuses and even between schools on the same campus. We want it to be clear to our students how they might participate in a 3+3 program to matriculate in the law school; or how they might move from undergraduate study at Camden to the medical school. Our size is a tremendous asset: rather than being unwieldy and hard to navigate, we need maps for students to follow their academic journeys.

Beginning with business education, Jeffrey Robinson is considering approaches to help make our professional education programs easier to navigate for external parties and applicants, to build on our strengths. Too often we find ourselves in competition with ourselves, and with clearer communication and opportunities for collaboration, I believe Rutgers can have the strongest professional schools in the region. But we have to work together.

All this is underpinned by collaborative work by our Enrollment Management teams to coordinate on their admissions goals over the coming years and to have a common principle that a Rutgers student is a Rutgers student—no matter where or what they study.

I’m sure you share my appreciation for our Enrollment Management staffs across Rutgers for their teamwork in moving to the Common App, in processing the surge of applications, and in overcoming the challenges that federal FAFSA delays created last year. All of Rutgers benefits when we work together to fill our classrooms on every campus with a talented, high-achieving, and diverse student body.

Keep in mind that we are just looking at undergraduate opportunities during this first phase. I believe there are huge opportunities for serving our current students and the state through more coordinated professional and executive education admissions practices, which I hope will be tackled in the coming years.

Strong and steady enrollment is essential to our bottom line, academically as well as financially, and the picture for the next academic year is encouraging. We have already received more than 90,000 undergraduate applications, up another 15% above the dramatic increase we saw last year with the debut of the Common App. Though it’s early in the process, of course, we are also seeing a rise in the number of out-of-state students applying and being admitted.

Aligned with our goal to increase out-of-state enrollment, EVP Moghe and I have directed Rutgers Global to enhance international student recruitment across all chancellor-led units and elevate our global visibility to remain competitive with our peer institutions. These efforts are already yielding positive results; to cite just one statistic, admitted international first-year undergraduate applicants for fall 2025 have risen more than 100% university-wide compared with those in fall 2023.

Fundraising

Central to our commitment to financial sustainability—in addition to recruiting students—is our ability to tell our story to our alumni, to philanthropic organizations, to state and federal partners, and to current and potential donors.

Private fundraising continues to be strong, thanks to the leadership of Foundation president Kimberly Hopely and her excellent team.  We are nearly $14 million ahead of last year’s pace, but we also have a higher target than last year, when we finished at $256 million.  We are aiming to raise $275 million by July 1.

Equally significant, we have continued building up alumni engagement, which is critical for lots of reasons, only one of which is financial. Higher engagement means better advocacy, more job placement opportunities for our students, a boost to our reputation, and increased school spirit. A little more than half of our 600,000 living alumni are engaged with the university in some way—by receiving our communications, attending Rutgers events, volunteering, or making gifts to Rutgers. We continue to build those relationships by, for example, hosting events for alumni in Florida, California, Seattle, Portland, London, and Paris.

State and Federal Funding

Our relationships with the state’s leaders in the Legislature, in the Governor’s Office, and on Capitol Hill remain strong, as we continue to make the case for state and federal appropriations to support our mission. Support from the State of New Jersey is crucial, providing financial stability needed to maintain and enhance our programs and facilities and to retain our world-class faculty. Federal funding is the largest component of our sponsored research, and federal aid makes a Rutgers education possible for a substantial portion of our student body.

But to say our outlook for these annual appropriations is unclear would be an understatement. Under a new administration in the White House, we have faced a rash of executive orders and other actions that are still being parsed and that could have a significant impact on our budget for the coming fiscal year. 

As we have already seen in the form of stop-work orders that some of our faculty have received, federal funding for research, especially related to areas targeted by the White House such as diversity and inclusion, health equity, and gender identity, is in jeopardy. 

There is also the possibility that broader actions could be taken to, for example, tie all federal funding, including both research and student aid, to abandoning programs and policies at Rutgers that we recognize as core to our mission.

At the same time, similar kinds of reductions in federal funds coming to the State of New Jersey—which already faces a difficult budget year ahead—could force the Legislature and the Governor to make hard choices that cut back higher education support this year. 

As we move forward to confront these emerging challenges, Rutgers is guided by its public mission of teaching, research, and service, in our unique capacity as the State University of New Jersey and an instrumentality of the state.  We will remain focused on our core mission, our students’ educational pathways, and service to the common good. 

As I hope you have seen in our communications, the university’s senior leadership is pledged to keep the Rutgers community informed, to help our faculty continue to do their work, and to support our students in every way we can. This means supplying you with clear and up-to-date guidance, as you can see on the new FAQ website.  And I know that Executive Vice President Mike Gower and Senior Vice President Michael Zwick welcome dialogue with the University Senate by way of a small group selected by the Senate.

Conclusion

To summarize as I conclude, please know that we are committed to Rutgers’ long-term financial sustainability to ensure the continued excellence that so many people across the university have worked tirelessly to achieve.  There will be tough choices and difficult days ahead of us, to be sure, as we work together to prepare students, pursue new knowledge, advance health care, and serve the needs of the state and the nation.

As we deal with uncertainty and understandable concern, I return to a lesson I learned from one of our Schwarzman Scholars whom I mentioned at the start: Tania Martinez. I interviewed her as part of my Faces and Voices of Rutgers project a few years ago. A rising Rutgers-Camden senior at the time, Tania was a Civic Scholar triple-majoring in political science, philosophy, and global studies. She was also involved in a jillion extracurricular activities, including host of a podcast called Voices of Immigration.

She manifested so much of the Rutgers spirit: curious, passionate, entrepreneurial.  When I asked her about how she gets through difficult times, she told me, I choose to be optimistic. She said, “All we can have is that optimism.” 

She went on to explain: “I see the world as needing to be more fair, so I’m gonna continue to fight for that. It needs to be more just. There needs to be more respect. I can see these values that I internalize, that I see so much of the world sometimes lacking—but also sometimes exemplifying in magnificent ways. To me it’s about leaning on those magnificent moments, and learning from them ... And that’s what gives me optimism.” 

May we all have Tania’s optimism in the days ahead.  May we be inspired by the magnificent moments that happen every day in our classrooms and laboratories and studios.

May we be heartened by the brilliance of our faculty and clinicians, the dedication of our staff, the resilience of our students, the loyalty of our alumni, the generosity of our donors, and the advocacy of our partners in Trenton and Washington.

And may we be guided by the values we hold dear: ensuring access and academic excellence, performing service to the common good, and living our commitment to be a beloved community where everyone has value and everyone contributes to our success.

Thank you for your time and attention.