The Budget, Our Way Forward
The following message was sent to Middlebury faculty, staff, and students on April 2, 2025.
To Our Community,
In a letter to you last week we acknowledged the disruptions and uncertainties brought on by new directives out of Washington and how they are affecting us here. The realities of these events, and their repercussions in Middlebury sites around the world, fill our days, as we know they do yours. These are the times we’re in. This is some of the hardest work before us. Tracking the issues closely and supporting this community continue to be of our highest concern.
At the same time, we’re immersed in another effort that’s critical to the life of this institution, one that we’ve focused on intensely since fall, before any executive order: balancing Middlebury’s budget. We undertook this work with the board’s executive committee and the chairs and vice chairs of the Resources, Strategy, and Risk committees—and recognize now how our attention to the deficit is even more crucial as we see the financial impact of politics on colleges and universities nationwide.
We’ve concluded that it will take new—and in some ways difficult—steps to shore up Middlebury’s finances, building on work we’ve already been doing. Your dedication to this effort, resourcefulness in figuring out how to do more with less, and patience have brought us far. But the reality is that we have further to go. We must finally put Middlebury on its strongest financial foundation so we can continue to advance our mission to best serve our students, our workforce, higher education, and society at large.
This letter outlines the beginnings of our plan for financial viability—the what, the why, and the how.
Earlier today we met with faculty and staff representatives in Vermont and Monterey to talk about the issues we’re raising here. We also spoke in advance to outside Middlebury partners who will be affected by our decisions. We’ll reach out to student governance in the days ahead. We know that this is a lot to take in and that you’ll have questions and concerns. We’re planning an active schedule of Q&A and information sessions and will have more information about these by Friday.
The Latest Figures
We last reported to you about Middlebury’s budget in late February, following the trustees’ winter meeting.
At that time, we explained that we’re projecting a $14.1 million deficit this fiscal year, notably higher than our $8.9 million projection from October. The unexpected spike, we said, came from a few sources: Enrollments at the Institute were lower than we planned for, amounting to $8.7 million of the shortfall. There were moderate decreases in tuition revenue at the Language Schools, Bread Loaf, and Schools Abroad, though the Schools as a whole remain revenue positive. And we had significantly higher outlays for healthcare, increased costs for some budgetary items unrelated to salaries or employee benefits, as well as interest and depreciation. Together, these accounted for the other $5.4 million of the projected deficit. Looking forward, we anticipate a similar challenge next year, though we expect that the College will carry a larger portion of the deficit compared with the Institute or Schools.
We want to emphasize that the deficit we’re addressing in this message is at the College. At MIIS we continue to pursue the four-year plan to turn around enrollments.
The trustees, of course, are keenly aware of these numbers and our finances overall, since a primary charge of any governing board is to ensure the financial health of their organization. Guided by the senior administration, they’re regularly tracking the budget dynamics through each fiscal year—its current state, projections, stressors, trends—while at the same time keeping the long view. That’s because at an institution like Middlebury, trustees have another core responsibility: to continually ask how our actions today might influence Middlebury tomorrow. How our actions today can ensure that this institution is relevant, salient, and secure a decade, a generation, and even a century from now.
The Challenge
To say it as clearly as possible, our challenge is this: We haven’t been able to balance our books despite significant progress in how we do business. We simply must get ourselves to the balanced budget that has eluded us, year over year, to be able to support our mission today and into the future. We all know what that mission is: preparing students to lead engaged, consequential, and creative lives; contribute to their communities; address the world’s most challenging problems through our commitment to immersive learning. It’s both a mission and an obligation to continue to provide one of the most extraordinary and relevant experiences in higher education.
Carrying a deficit every June 30, as we’ve done for too long, is too great a weight, one that eventually will hamper our ability to deliver on our mission. Our deficits are continually an outlier among our NESCAC peers, which all operate profitably, experiencing only occasional downturns. And there are signs that financial pressures will only increase, as we hear of plans, for instance, to tax endowments at 14 percent or even 21 percent, up from 1.4 percent today. Despite popular criticisms, an endowment is the financial backbone that’s put to use every day, enabling an institution like ours to live and make good on our values. One of those values is access. Middlebury is a private institution but also a public good, and we believe a public good should be accessible to all regardless of ability to pay.
By balancing our books, living within our means, we’ll put ourselves in the best position to support what matters here. Offering one of the finest educational experiences in the world, and everything that that entails, and taking care of a workforce that each day makes Middlebury the singular place it is—these are products of a financially stronger institution.
These have been the overriding themes of our discussions with the board. These are the reasons that the trustees have directed senior leadership to develop a plan to balance the budget over the coming fiscal years. The first elements of the plan are outlined below. Others will require more research, which we’ll continue to do in the months ahead and share with you along the way.
Progress to Date
We mentioned that we’ve already made significant progress against the budget gap. This is what that looks like from the institutional long-term view to ensure that Middlebury is maintaining its financial resources for future generations. We continue to manage our endowment wisely, surpassing industry benchmarks for 3, 5, 10, and 15 years and staying the course on drawing 5 percent from the endowment annually. This is the result of the attention we’ve paid to fiscal discipline, and it has improved Middlebury’s long-term financial health, fed our operating budgets, and enabled us to offer competitive aid packages for our students and families. For our workforce, we’ve been able to increase salaries each of the last three years—7 percent, 5 percent, and 4 percent respectively—resulting in a $22 million increase overall. We’ve brought staff salaries to market and also improved the wage differentials for evenings and weekends.
We want to stress that it’s taken all of us to achieve results like these, to make progress against really stubborn headwinds. And we’ve made excellent progress. The hard reality is, we still have more to do.
Guiding Principles
We were guided in our decision-making by these three principles:
The student experience will only be strengthened by these moves. For our students and families, Middlebury will continue to be all that we promise it will be during the admissions process. The student experience here is strong. This budget work will only strengthen it further.
We want the least disruption possible for our workforce as a whole. As we’ve examined all possible means to promote fiscal health, we sought to avoid any widespread impacts to our workforce. As we work with you to determine Middlebury’s future state, we’ll be supportive, collaborative, and sympathetic in any decisions we need to make.
We need to simplify our organizational structure, which is too complex. While we have more research to do, we know there’s overlap of work in some areas across the institution, and we’ll better serve our mission by being more efficient. We’ll continue to assess and communicate at the appropriate time. Already we’ve looked at efficiency in the 17-member Senior Leadership Group: the full SLG will now meet monthly, not weekly, to take up issues that intersect all our administrative areas, and we’ll create a smaller working group to bring more focus and faster decision-making to the institution.
Closing the Budget Gap
Building on the work we’ve done, these are the actions we’ll take to begin to bring expenses at the College in line with revenues, and sustain that into the future. With these first measures we expect to realize more than $10 million of savings.
Retirement Incentive for Vermont-Based Staff: We’ll offer a financial incentive for Vermont-based employees to take an early retirement. This incentive will be available to all Vermont-based staff who are at least 55 years of age and who have at least 10 years of service to Middlebury. Human Resources will have all the details in the days ahead for those who are eligible.
Retirement Match of 11 Percent: Effective January 1, 2026, the highest contribution level will be an 11 percent match for retirement, and we’ll no longer offer 15 percent. The 11 percent still places Middlebury’s contribution among the best of our peers, and has been the highest rate for eligible employees who joined Middlebury after 2017. During the fall semester we’ll have details and documents to share for those whose plans are affected. There are no other changes to our retirement program or vendor, TIAA.
Rental Properties: We’ll reduce the number of leases by relocating the Arabic, Italian, and Portuguese Language Schools to Middlebury’s campus in summer 2027 from Bennington College, which has hosted them since 2022. In summer 2026, Advancement will move to Marble Works, which we own, from their leased space on Exchange Street.
Undergraduate Enrollment: Four years ago, during the pandemic, we enrolled an exceptionally large class, the Class of 2025, bringing total enrollment to more than 2,800. This presented challenges, but as we enrolled subsequent classes we found we could support an undergraduate population of more than our historical 2,500. We’ll grow back undergraduate enrollment to between 2,600 and 2,650 over the next few years, which will be manageable without a parallel increase in faculty or staff.
Health Insurance: We’re evaluating our health insurance plans, employee contributions and deductibles, and plan designs and comparing them to benefits at peer institutions. If we make changes, we’ll announce them this fall and not implement them until January 1, 2026.
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We want to close, for now, by acknowledging that what we’ve said here might be difficult to process right away or just difficult to hear. We know, too, that we’re delivering this news at a time when issues outside Middlebury bring their own stresses and uncertainties. We’ll be talking a lot in the weeks and months ahead at in-person sessions and on zoom to address your concerns, answer your questions, and share the progress we’re making in this effort.
With gratitude and appreciation,
Steve Snyder
Interim President
Michelle McCauley
Executive Vice President and Provost
David Provost
Executive Vice President and Chief Financial Officer
Frequently Asked Questions
Vermont Staff Retirement Incentive Program
Who is eligible for the retirement incentive program?
Vermont-based staff members aged 55 or older with at least 10 consecutive years of service as of June 1, 2025.
Who is not eligible for the retirement incentive program?
- Staff working in support of the Middlebury Institute of International Studies at Monterey.
- Head coaches in Athletics, who are classified as faculty.
- All faculty, including those holding administrative appointments.
- Staff whose positions are gift, grant-funded, endowed, or term appointments.
- Members of the Senior Leadership Group.
Are faculty included in this retirement incentive?
No. We offered an incentive for faculty a few years ago and given that we have no plans to reduce the number of faculty or change the student-to-faculty ratio, faculty are not being offered this incentive.
How many employees are eligible, and what is the participation target?
Approximately 180 staff are eligible. We do not have a defined target, but we estimate that approximately 15 percent or more of those eligible will participate, based on historical data.
What happens if not enough people take the incentive?
If acceptance of these offers is low, leadership and the Board of Trustees will reassess this program, along with all the other plans we’ve shared.
Will managers receive a list of eligible staff?
Any supervisor who has one or more eligible staff members has been informed. We have not shared the specific names of those eligible because this is simply eligibility, not a commitment. We want to protect the privacy and autonomy of each eligible staff member so they may fully consider this option. Two information sessions were held this week for supervisors to ensure they are informed and supported.
Is there any flexibility on eligibility (e.g., someone age 55+ with 8 years or 54 years old with 10 years of service)?
No. The policy requires 55 years of age and 10 consecutive years of service.
What is the timeline for the incentive?
Eligible staff received materials on Monday, April 7. Anyone interested in learning more about the program will need to complete an application by Wednesday, April 23, by 5 p.m. Agreements will all be sent by early May. All decisions and agreements will be finalized by the end of June.
People are feeling pressured to take the incentive program because they don’t know what is coming next or they want to help avoid layoffs. Should people be worried about this?
The incentive aims to offer choice, flexibility, and support, and the decision to participate or not is entirely that of the eligible staff member. There is no stated or implied pressure to take this offer. We encourage individuals to make this significant decision based on what is right for them. We are not planning layoffs at this time.
Retirement Contribution Tier Adjustment
What’s changing with the retirement contribution?
All employees in Tier IV of our retirement benefit group, who are currently receiving 15 percent matches, will shift to an 11 percent match, effective January 1, 2026.
How many employees are affected?
622 faculty and staff are currently in Tier IV.
What are the estimated savings from this change?
We expect that this will save approximately $2.5 million annually, with half of the savings realized in fiscal year 2026 and half in fiscal year 2027.
Why was this change made when it was and wasn’t this promised to employees at the time they were hired?
The 15 percent match was a benefit, not a contractual guarantee. As part of our consideration of how we can achieve a balanced budget with the least impact to all employees, we decided to make this change. The leadership recognized the impact of this change and did not make the decision lightly.
Is the dependent tuition benefit also at risk?
There are no current plans to change the dependent education benefit.
Organizational Planning
How will staff retirements be managed?
Some positions may be replaced quickly, while others may be reviewed or paused depending on institutional priorities. The approach will be student centered and cross-departmental. We are working to develop an intentional, collaborative process and will share more in the coming weeks.
Are layoffs being planned?
No. We are not planning layoffs at this time.
Are specific departments being targeted?
No. Staffing decisions will be made with institutional needs in mind, not at the departmental level.
What about departments that are already understaffed?
While the institution is overstaffed overall, some areas are critically short staffed. We recognize these concerns and will consider these factors closely as we move forward.
Program and Operational Adjustments
What role does MIIS play in the budget deficit?
MIIS has an $8.7M projected deficit. However, the College and Schools still would face a projected deficit next year of between $11 million and $13 million without MIIS. A Board of Trustees-approved, four-year plan is in place to address the budget deficit at MIIS.
What about travel expenses? Can we reduce travel to make up part of the deficit?
The total travel budget is currently about $9 million. This idea has been raised before, but cutting travel is complex because many departments view their travel as essential. As we move forward, we will consider this and all ideas suggested to us.
Endowment and Financial Management
Why not draw more from the endowment to cover the gap?
The board capped our draw at 5 percent to maintain long-term financial sustainability. Drawing more could reduce future funding and increase our exposure to the federal endowment tax. Endowment tax increases that are currently under consideration could raise our tax bill from $1 million to $12 million.
Who manages the endowment?
Our endowment is managed by Investure, an external investment firm. They oversee asset allocation strategy for Middlebury and many other colleges and universities.
What is the long-term strategy for resolving the deficit?
Our goal is to address the $10 million to $15 million gap through structural changes—while avoiding layoffs and preserving our mission.