An article from Dive Brief UC San Diego preps budget for up to a $500M hit from federal cuts

Citing “unprecedented conditions,” the university’s chancellor said it was freezing hiring and delaying capital projects.

Published April 4, 2025 Ben Unglesbee Senior Reporter

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University of California San Diego's Geisel Library. The image by belisario is licensed under CC BY-SA 2.0 Listen to the article 3 min This audio is auto-generated. Please let us know if you have feedback. Dive Brief:

• University of California San Diego is bracing for budget cuts of up to 12.5% as it faces a potentially massive dropoff in federal funding, according to the university. 
• Officials predict government changes could lead to annual funding shortfalls of between $75 million and $500 million, Chancellor Pradeep Khosla said in a Wednesday community message. Researchers at the university have so far reported 50 notices of federal grant disruptions. 
• Citing “unprecedented conditions,” Khosla said UC San Diego is freezing all hiring and delaying capital projects. The latter includes an “indefinite” delay on construction of a new life sciences building and clinical research building.

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UC San Diego is already feeling the brunt of the Trump administration’s efforts to pull the plug on wide swaths of federal funding to the higher education sector, including billions in grants commitments from multiple agencies. 

In his message, Khosla noted “a concerning rise in payment delays on expected grant revenues from most federal agencies.”

As the chancellor explained, that impacts the university’s cash flows, with UC San Diego facing both short-term and long-term cash challenges from the government’s actions. 

“Abrupt termination of research funding has far-reaching and damaging consequences not just for the research, but for individuals, teams, our university and society as a whole,” Khosla said. 

More, and deeper, funding cuts could be on the way as President Donald Trump and Republicans seek to restructure the federal government’s role in the U.S. and potentially make dramatic reductions to existing education and research programs. 

A new 15% cap on reimbursement for indirect research costs at the National Institutes of Health — which for now have been blocked by a federal judge — would cost UC San Diego $150 million annually, the university has said.

Additionally, potential reductions to research funding and grants, as well as to reimbursement rates for Medicare and Medicaid, could all hurt UC San Diego and its medical center, Khosla said.

The university was under some financial strain even before Trump took office. For fiscal 2024, the institution logged a $2.5 million total operating deficit as its expenses grew faster than revenues, according to its latest financials.  

The good news is that the university is growing, unlike many of its peers. In fall 2024, its headcount reached 43,533, a record for the university and up about a third from a decade ago, according to institutional data.

Interest from prospective students has also grown. UC San Diego received 156,906 undergraduate applications for fall 2024, also a record for the institution.

The university’s hiring freeze is part of a broader initiative across the University of California system as it grapples with funding cuts at both the federal and state levels.

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