Given the strong 2026 endowment return, why are budget concerns cited as a reason that the programs were assessed?

As President Eisgruber noted in his February “State of the University Letter,” we have lowered our expectation for the endowment’s long-term rate of return to 8 percent, down from about 10 percent. Accordingly, the percentage of the endowment we spend every year—the “payout rate”—must also come down, or the endowment will erode over time. 

The strong endowment return for the 2026 fiscal year should allow us to reach a lower payout rate more quickly than expected. However, we have not changed our long-term expectations for the endowment and will therefore continue to operate in a more financially constrained environment for the next couple of years as we transition to a new budget model to match the expected lower long-term returns.