Southern Oregon Gets Help, Portland State Plans to Cut

Two Oregon universities’ financial issues have gained attention this month as statewide leaders continue expressing concern about budget issues across the state’s public postsecondary institutions.

In January, the state Higher Education Coordinating Commission approved a report recommending that the state’s public colleges and universities pursue “institutional integration”—from sharing services and programs up to full mergers. The document warned that “on the current path universities will be forced to continue to make substantial cuts annually or, in aggregate, fund balances will be completely exhausted within an estimated three to five years.”

Fast-forward to now: As the state legislative session wraps up, individual institutions are dealing with continued financial issues.

“The soft enrollment environment and the limited increases to state funding that we’ve had over the past several years have not kept up with the cost pressures,” said Ben Cannon, executive director of the Higher Education Coordinating Commission.

State lawmakers recently passed legislation setting aside up to $15 million to provide Southern Oregon University with, as their bill puts it, “short-term financial stability”—plus another $500,000 to create a “long-term financial sustainability plan” for that institution. The university declared financial exigency in August, saying it needed to cut costs quickly.

In conversations with reporters, Tina Kotek, the Democratic governor, indicated she will sign the bill, noting the university’s “fiscal crisis.” A Southern Oregon spokesperson said in an email to Inside Higher Ed that its “most recent cash-flow projections anticipated financial insolvency later in 2026.”

Even with the likely bailout, “sobering choices” are still ahead for the university “as we identify those programs and services that most critically serve our region,” university president Rick Bailey wrote in a message to campus. The university spokesperson said the $15 million will only resolve “cash-flow issues through June 2027.”

Portland State University didn’t get a bailout, to the chagrin of faculty. Last week, the university announced it’s considering eliminating departments and “reducing” others to fix a structural deficit that it says may exceed $35 million by 2028. It said there will be layoffs.

“The Board of Trustees has directed me to reduce and eliminate the use of our reserves to fund the university’s operations,” PSU president Ann Cudd said in a message to employees.

While the university called state support “inadequate” in an explanation of the moves on its website, it acknowledged that the state faces “its own significant budget pressures.”

“We cannot rely on the state for more money, and we cannot bridge the gap by significantly raising tuition for our students or digging deeper into our reserves,” it said.

The university is considering eliminating the Departments of Conflict Resolution and University Studies, which is home to PSU’s general education program, as well as the Portland Center, which hosts international students studying abroad at PSU. If it erases university studies, six more departments or schools could be impacted: English; physics; sociology; women’s, gender and sexuality studies; the School of Art + Art History + Design; and the School of Public Health.

Another 10 departments or schools could be reduced: educator licensure; leadership, learning and counseling; history; philosophy; the School of Earth, Environment and Society; world languages and literatures; criminology and criminal justice; economics; politics and global affairs; and public administration.

PSU says it hasn’t determined how many layoffs there will be. Per its contract with the full-time faculty union, an arm of the American Association of University Professors, ”any full-time, tenured faculty positions that are eliminated receive a 12-month notice,” the university said.

All of these changes will be implemented “over the next year,” it said. A spokesperson said campus constituents will have time to comment on the plans, and a final plan is expected to be completed in June.

Both universities gave similar explanations for how things got this way: declining enrollment, insufficient state funding and rising costs. (PSU also blamed its location and other specific factors, writing on its website that it has “seen a 23% decline in enrollment since 2019, driven by the reputation of downtown Portland, pandemic-related declines in community college enrollment and evolving federal policies impacting international students.”)

PSU-AAUP, the full-time faculty union, has denounced the university for not seeking more state funding, like Southern Oregon did. In a news release, it said the “Cudd Administration chose not to partner with a powerful coalition of every public sector union in the state to win its demand of $50M in education stability funds for PSU.” (The university spokesperson confirmed that PSU didn’t seek a state bailout.)

“While Southern Oregon University is poised to receive $15 million in emergency funding from Salem, PSU has not asked for similar intervention and has been happy to move forward unaided, ready to cut,” it said.

In a statement, union president Bill Knight said the planned cuts point “to the same death spiral that has haunted us for nearly a decade” and “an inescapable doom loop.”

“This will harm our potential for growth and do significant damage to student opportunities and the support networks they need,” Knight said. “It walks away from our responsibilities to the metro region and particularly to downtown Portland.”