NYU must “undertake additional steps” after running a $71 million deficit last year, as federal funding for research and financial aid falters and enrollment drops among international and graduate students.

In a Wednesday email to faculty, President Linda Mills said the university’s expenses surpassed its revenue in the 2025 fiscal year, following a $69 million surplus the year before. She said administrators are working with department leaders to expand NYU’s “high-demand programs” and identify what discretionary spending can be cut, but that the extent of changes needed is still unclear.

“There is tremendous talent in every school and unit across our university,” Mills wrote in the email, also signed by Provost Georgina Dopico and interim CFO Janine Wilcox. “We have the shared responsibility to balance the reality of our budget pressures with the need to provide careers and opportunities that offer real meaning and growth to our colleagues.”

Mills attributed the deficit to reduced federal funding streams, including millions of lost dollars in research grants — which NYU said it “completely recovered” from in November — and capped student loans. She added that U.S. universities are seeing fewer international students, who comprise more than a quarter of NYU’s student body and cannot qualify for financial aid, following new immigration restrictions and a crackdown on student visas. Mills also noted that graduate student enrollment has been on the decline across the country.

Last March, Mills put a hold on all administrative hiring and limited salary increases in the wake of President Donald Trump’s efforts to dismantle federal support for higher education. NYU cut budgets by an average of 3% across all departments in June, pulling primarily from “travel, events, meals and additional other-than-personal-service items.” In her recent email, Mills stressed that the university has not issued mass layoffs, shut down programs without warning or seen a significant decline in Ph.D. students. 

“We will need to continue many of the mitigation measures already in place and also implement additional measures,” Mills’ email read. “These efforts are designed to safeguard and strengthen the quality of our academic programs and research mission — and to create the fiscal stability necessary to continue to support our dedicated employees.”

Contact Dharma Niles at [email protected].