To: Wellesley College Faculty and Staff
From: Courtney Coile, Provost and Lia Gelin Poorvu ’56 Dean of the College; Piper Orton, Vice President for Finance and Administration and Treasurer; and Carolyn Slaboden, Chief Human Resources Officer
Re: Update on budget and hiring pause
Date: November 13, 2025
We are writing to provide information about FY25’s audited financial results, budget projections for FY26 and FY27, and the ongoing work to address the College’s structural deficit, as well as an update on the hiring pause.
Summary
The College realized an operating surplus in FY25 and is focused on achieving a balanced budget in FY26. We are facing a deficit of $5 million in FY27 that is projected to double by FY30. Addressing this structural deficit will require sustained focus and difficult choices, including continued restraint in staffing.
FY25
The College finished FY25 with a $7.5 million operating surplus, $5.8 million of which was due to lower financial aid expenses. Financial aid varies from year to year as the College admits domestic students without regard to financial need and meets the full demonstrated need of all students. The incoming class in the fall of 2024 had significantly lower financial need than the graduating class of 2024. Changes in eligibility also increased awards for federal Pell Grants, reducing the need for aid provided by the College.
FY26
As we reported in our last budget update, we face a significant challenge in achieving a break-even budget for FY26. Our expenses are higher in FY26 relative to FY25 due to an increased need for financial aid for the incoming class in the fall of 2025 as well as the changes the College made to financial need determinations that led to an increase in many aid packages. Further, we had a larger than typical increase in compensation expenses and double-digit increases in health insurance costs. The completion of renovations to the Clapp Library and the Claflin residence hall and the construction of the new Vivian A. Kao ’04 Health and Counseling Center also increased depreciation expenses.
The balanced budget presented to the trustees in April relied on one-time revenues and additional anticipated reductions to operating expenses. The need to reduce expenses as well as the uncertainty stemming from external financial pressures led the College to impose a hiring pause.
Future projections
We are currently projecting a $5 million budget deficit in FY27, as the nonrecurring savings that led to a surplus in FY25 and the one-time revenues that helped balance the FY26 budget are no longer available. We project that this annual deficit will double by FY30.
One driver of the deficit is that we expect the growth in expenses, including faculty and staff compensation, which represents more than half of the budget, to outpace the growth in net tuition revenue and endowment income. Depreciation is also projected to rise, as we anticipate the continued renovation of residence halls and the necessary future renovation of the Jewett Arts Center. Philanthropy will bring in new revenue, primarily through gifts to the endowment, but this alone will not be sufficient to balance the budget. We must also prepare for the possibility of unfavorable developments such as potential decreases in tuition from international students and in federal grant revenues.
The College will need to present a balanced budget for FY27 next April and make decisions that position us to realize balanced budgets in years to come. Achieving these objectives will require significant work.
Redesigning work processes in our approach to staffing
Since we implemented the hiring pause last April, we have continued to fill critical positions based on a careful review process with department heads and the Provost Budget Committee. Given our ongoing financial constraints, we will continue the current evaluation process for staffing decisions.
When administrative and union staff vacancies arise, department and division heads will be responsible for a thoughtful work-design process that includes assessing departmental responsibilities and identifying where work could be reprioritized, reduced, or streamlined. With respect to faculty hiring, all decisions will be strategic and make sense for the academic program in the long term.
Looking forward
Wellesley is a remarkable institution, but like many other colleges and universities we face daunting challenges. As we navigate our path forward, we will continue to be guided by our commitment to our students and to academic excellence. We welcome the engagement of our community, including the important work of the Budget Advisory Committee. To promote greater understanding of the College’s budget, we plan to hold additional budget presentations for the community in the spring.