The University of Alaska is grappling with significant challenges as the administration of President Donald Trump has suspended and canceled over $50 million in federal funding.
Pat Pitney, the university’s president, informed the Board of Regents that the impact of these federal changes could lead to potential staff reductions in programs heavily reliant on federal grants.
These revelations came during a recent two-day meeting of the regents in Fairbanks, where the board approved the operating and capital budgets for the upcoming fiscal year.
While the operating budget includes $352 million in unrestricted general funds, which marks an increase from last year, it is still insufficient to cover rising costs, Pitney noted.
Inadequate state funding is compounding the pressures on the university, adding urgency to its financial situation.
However, there is a silver lining: university enrollment is on the rise, partly driven by the Alaska Performance Scholarship and the institution’s affordability, Pitney reported.
Recently, Alaska legislative leaders endorsed a plan that may enable a draw from the account funding these scholarships to address a $200 million budget shortfall.
Currently, this decision awaits approval from Governor Mike Dunleavy, who has the authority to veto the budget bill.
Board Chair Ralph Seekins expressed confidence in the board’s approach to balancing fiscal restraint with targeted investments in the university system, which is yielding positive results, particularly in stabilizing the institution and increasing enrollment.
Seekins emphasized, “As the state budget environment contracts and uncertainty at the federal level remains, the board will continue to work with university leaders to maintain progress on student enrollment and success.”
One significant change involves the cancellation of about $5.6 million in federal grants.
Jonathon Taylor, a university spokesperson, explained that this included a $2.5 million grant for the Alaska Native Science and Engineering Program (ANSEP), one of the program’s largest sources of funding.
The cancellation of the grant, described as “unexpected and untimely” by ANSEP’s executive director, Matt Calhoun, necessitated the cancellation of the summer Acceleration Academy.
Despite this setback, five other summer programs will proceed, with ANSEP seeking new funding sources to bolster the academy in future years.
Additionally, Pitney reported that $50 million in federal grants are currently on hold.
This includes a $46 million grant from the Department of Homeland Security meant for the Arctic Domain Awareness Center-Arctic Center of Excellence, which is based at the University of Alaska Anchorage.
The initial projects for this program include initiatives such as mariner emergency call detection and research into renewable and nuclear energy options.
However, due to the frozen status of the grant, the university is now in a “wait-and-see mode.”
Efforts are ongoing with the Department of Homeland Security to explore avenues that might allow the grant to proceed.
Moreover, around $21 million in previously frozen federal grants for various other programs has recently been reinstated, Taylor confirmed.
The university relies heavily on federal funds, receiving $270 million annually, with approximately $220 million connected to research and academic grants, while the remainder supports student aid.
Pitney acknowledged the precarious situation, stating, “Everything in the rhetoric puts all that at risk,” referring to the language present in presidential executive orders and agency notices.
She noted that these issues could ultimately be addressed through congressional and legal processes, adding, “But we can kind of see the pressure coming.”
The potential for reduced federal funding has implications for the university’s operations, which manage around 1,200 grant-funded projects, primarily supported by multiyear federal funding.
Pitney stressed confidence in the majority of existing grants but raised concerns about the potential decline in the number of new grants awarded annually.
Each year, the university typically aims to secure 250 new grants, but projections suggest this number could drop to between 100 and 200 due to anticipated federal cuts.
Pitney also warned that average award amounts might significantly decrease, impacting the university’s workload.
She calmly expressed the need to prepare stakeholders for staffing changes, saying, “It would be nice to be able to report that we see no staffing changes in our horizon, but that’s just not practical.”
Notably, the staff at the university’s International Arctic Research Center have raised alarms that potential Trump administration cuts to scientific research could jeopardize certain programs vital to their operations.
Despite the challenges voiced in federal discussions, the university is looking at a relatively modest reduction in indirect cost recovery, estimated around $2 million to $3 million for the upcoming fiscal year.
Indirect cost recovery is essential as it reimburses the university for expenses not directly related to research, including laboratory equipment and administrative support.
In a best-case scenario, Pitney expressed hope for maintaining funding levels in this area as the university navigates the uncertain financial landscape.
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