Budget Update – 4/25/25

Middlebury leadership sent the following message to the campus community on Friday, April 25.

To Our Community,

We write today with an update on our efforts to reduce Middlebury’s structural deficit, which we described in an April 2 letter and followed up on in written communications and in-person meetings with faculty and staff—to discuss specifics, answer questions, and address concerns.

Over the past three weeks we’ve continued our close consultations with select committees of the Board of Trustees, which has ultimate responsibility for Middlebury’s fiscal health and which charged our administration with creating and delivering a plan to get us to a long-term, sustainable financial position. The board continues to support our plan.

We’ve also been briefing incoming president Ian Baucom throughout this process. In his letter sent yesterday, Ian expressed full support of this work, of “the truly difficult financial decisions affecting the College.” As Ian acknowledged, “their cost is real, they affect real lives, but I firmly believe that they come from a deep loyalty to the institution, a sincere desire to avoid the greater human pain of significant layoffs, stabilize a budget in structural deficit, safeguard us as best as possible from the financial threats of this moment, and secure a route to our future.” 

A Mandate to Balance the Budget

The decisions we’ve made to respond to the board’s mandate for a balanced budget have been guided from the beginning by a number of principles consistent with our values as an institution. We have proposed structural changes that are designed to bring Middlebury’s operations in line with our peers, who do not report ongoing budget deficits, while protecting the student experience and creating the least possible impact on our community.  

As we did in the economic downturn of 2009 and again during the COVID pandemic, we have prioritized the jobs of our staff and are choosing the steps we’ve outlined in lieu of the freezes and widespread layoffs that have begun at other institutions. We understand that the decisions we’ve made create hardship for many of our longest-serving colleagues, but we believe that the change in retirement contribution creates a more equitable system for all our employees, even as it preserves Middlebury’s retirement program as one of the most generous among our peer institutions. 

Finally, we understand concerns among colleagues about a perceived lack of consultation about our budget challenges and these decisions. We hope our work over many years with the Faculty Council, Staff Council, and Faculty Resources Committee, among others, represents a consistent effort to provide the greatest possible transparency. However, as senior leadership we’re charged by the board—and accountable to the institution—for ultimately deciding on the course of action.   

Those are the issues and considerations that have motivated us from the start.  

In this letter we want to do two things. First, we’ll provide more context based on the discussions we’ve had with various constituent groups around the institution and the feedback we’ve received—which includes the Motion and Rationale sponsored by the AAUP Executive Committee and Faculty Council, and The Middlebury Campus opinion piece authored last week by senior economics faculty. We hear you, and we’ll continue to listen and engage throughout this process. Second, we want to let you know about upcoming information sessions and resources. 

More Context and Answers 

The following questions and answers come directly from our discussions in the community. We thought it would be most useful to include them here. 

— Why did we just borrow $45 million? We did it to fund the accumulated deficits we’ve incurred over the last five years. This means we simply have no financial flexibility in our budget and can’t pull those dollars from the endowment because the bulk of it is restricted by contracts with donors to fund specific purposes. In addition, the cost of borrowing money is less than the return we receive from preserving the endowment. Our rate was 4.66 percent on the recent borrowing, whereas our average 10-year return on the endowment is 8.7 percent. This is important for the financial sustainability of Middlebury. 

— We will have financial flexibility if we can achieve a few consecutive years of balanced budgets or even modest surpluses. If we can get to that point, our first priority will be faculty salaries given that we’ve brought staff to market over the last few years.  

— The board is keenly focused on Middlebury’s long-term health and concerned that the current economic and political environment might worsen. How do we not only defend but enhance our cherished institution? What difficult decisions must we make now and in the future to ensure our viability? Those questions are front and center, and contingency planning will be a must in addition to current plans.  

— The financial position of MIIS is of great concern and we’re closely monitoring the current headwinds out of Washington. We made major changes over the last year including sunsetting multiple programs and letting many colleagues go. These changes included a four-year timeframe with regular assessment and adjustments expected over this period in response to outside influences. Given the likely additional pressures we face in the current moment, we anticipate doing even more focused work over the summer with the board and senior leaders. They will review the plan to address this challenge, including the MIIS-specific deficit. 

— Even as we’re experiencing record fundraising today, it takes many years for these pledged dollars to manifest in our endowment. Our endowment is smaller than many of our NESCAC peers. This means we continue to have less funding than those peers to support our annual budget, financial aid, salaries, and operating support. 

The items above reflect the most prominent issues we’ve heard in recent discussions. We’ll share others as we hear them in the weeks ahead. And we’ll continue to consider all ideas shared with us. In this process we considered remedies that would have been even more difficult and harmful to morale and the community. This deficit reduction process is not simple or easy. We invite our entire community to be involved in this process and have outlined upcoming opportunities for engagement.  

Information Sessions and Resources

Below we’ve included additional resources and updates, along with opportunities to connect in the coming weeks: 

Sharing Ideas

Thank you again to all who have submitted a Budget or Structural Change Idea. We’re reviewing your creative, thoughtful suggestions with the appropriate departments. The form remains open, and we welcome additional ideas. 

Voluntary Staff Retirement Program 

We’re now reviewing applications from those eligible for the voluntary staff retirement program. The deadline to express interest was Wednesday, April 23, and those who applied will receive individualized agreements by early May so they can consider their options. We encourage any applicants to contact the Human Resources team with questions. Final signed agreements will need to be returned within 45 days. In mid-May, we’ll share information with supervisors about how we will review vacancies created by voluntary retirements. Final information about departures and retirement dates will be shared with supervisors in June. 

Upcoming Information Sessions 

— Monday, April 28, Vermont Meeting for Staff and Faculty, 9 a.m. ET, Wilson Hall. This will be an opportunity to follow up after several weeks of continued discussion, to provide updates, and to answer questions.  

— Monday, April 28, Virtual Meeting for all Staff and Faculty, 4 p.m. ET/1 p.m. PT, Zoom. This will be a similar session to the above 9 a.m. in-person meeting in Vermont, but held on Zoom. Please sign up here to receive the Zoom link. 

— Wednesday, May 14, Hybrid Meeting for Staff and Faculty, 2 p.m. ET, Wilson Hall and Zoom. This meeting will focus on updates from the Board of Trustees’ May meeting, including budget discussions and ongoing work. You can sign up for a Zoom link here.

TIAA Representative on Campus 

We’ve arranged for a TIAA representative to be on campus every Wednesday in May and June to consult on retirement contributions and planning. All sessions will be at the Office of Human Resources at 75 Shannon Street. You can sign up for in-person or virtual consultations here (TIAA login required). 

Health Benefits Discussion 

We’ve begun discussions with the Faculty and Staff Resources Committees about options and approaches to health plans. This work will continue through the spring and into summer as a way to bring in faculty and staff voices through the existing governance structure.  

FAQs

As a reminder, we’ve created a list of Frequently Asked Questions and invite you to check back for updates. 

Thank You 

We know how difficult this work is and the very real impact it has on our community and the people of our community. Thank you for engaging in this process. We’ll be back in touch next week with another update. 

Sincerely, 

Steve Snyder
Interim President

Michelle McCauley
Executive Vice President and Provost

David Provost
Executive Vice President and Chief Financial Officer