ANKARA 

The US' storied Stanford University announced it will reduce its budget by $140 million for the upcoming academic year, citing the impact of US government policy changes, including cuts to research funding and a potential increase in the endowment tax, press reports said Monday.

In a letter sent to faculty and staff last week, Stanford President Jon Levin and Provost Jenny Martinez warned that the budget reductions could result in staff layoffs and would deepen the current hiring freeze, according to Britain’s The Guardian.

Faculty hiring will continue, but at a slower pace, they said.

The cuts will reportedly not affect Stanford Medical School, which will develop its own separate financial strategy.

“We believe deeply in the value of universities, in federal support for basic research, and in the endowment model that underpins financial aid and graduate fellowships,” the outlet quoted Levin and Martinez as saying.

“At the same time, we need to be realistic about the current landscape and its consequences,” they added.

Stanford, which holds the third-largest university endowment in the US at $37.6 billion as of August 2024, expects significant financial strain if the latest version of President Donald Trump’s budget becomes law, codifying cuts that Trump has threatened over Stanford’s insistence on academic independence.

The proposal would raise the endowment tax from 1.4% to 21%, potentially costing the university $750 million annually.

To soften the blow, Stanford will increase its endowment disbursement by 2.9% to support financial aid, doctoral funding, and research, while limiting capital expenditures to only essential projects.