This story has been updated since it was first published on April 4.

MIDDLEBURY — Middlebury College last week announced several new steps it will take to balance its budget, including limiting employee benefits, offering a financial incentive for Vermont employees to retire early and growing undergraduate enrollment in the coming years.

College officials announced those and other steps in an April 2 letter addressed to the college community and signed by Interim President Steve Snyder, Executive Vice President and Provost Michelle McCauley and Executive Vice President and Chief Financial Officer David Provost.

The letter noted the college is projecting a $14.1 million deficit this fiscal year, up from a projection of $8.9 million in October. The letter just arrived before the announcement of trade tariffs caused stock prices to plunge and increased financial uncertainties for the economy at large.

“We’ve concluded that it will take new — and in some ways difficult — steps to shore up Middlebury’s finances, building on work we’ve already been doing. Your dedication to this effort, resourcefulness in figuring out how to do more with less, and patience have brought us far. But the reality is that we have further to go,” college officials wrote. “We must finally put Middlebury on its strongest financial foundation so we can continue to advance our mission to best serve our students, our workforce, higher education, and society at large.”

Middlebury Political Science Professor Bert Johnson said he’s heard a range of reactions to the budget letter, “from grim acceptance to feelings of betrayal and anger.

“Many faculty and staff feel that we’ve been asked to ‘do more with less’ (per the wording of the letter) for years, and feel exhausted by the further belt-tightening announced in the letter and the prospect of even more cuts in the future,” Johnson told the Independent. “These are tough decisions to make, and I recognize that it is not easy to choose among difficult alternatives — certainly I’m glad not to be facing layoffs, and I hope that we don’t see layoffs at all.”

Middlebury College is the largest employer in Addison County. The institution has around 2,000 employees, including faculty and staff, as well as another 5,000 part-time, short-term student employees and adjunct, according to Associate Vice President for Public Affairs Julia Ferrante.

She told the Independent there are no layoffs at this time.

The April 2 letter outlined five measures the college will take as the start of its “plan for financial viability,” which were aimed at helping bring expenses in line with revenues and expected to achieve over $10 million in savings.

Those measures are:

• A retirement incentive for staff in Vermont. College officials stated the incentive would be available to all Vermont staff at least 55 years old who have worked at least 10 years at Middlebury College.

• Retirement match capped at 11%. Like many employers, the college matches employee contributions into the retirement savings up to a certain level. Beginning next January the highest the college contribution will be an 11% match for retirement, down from a top lever of 15%, the letter states.

• Fewer rental properties. College officials said they’d reduce the number of leases by relocating a few Language Schools that have been hosted at Bennington College since 2022 to the Middlebury campus in summer 2027. Also, the Office of Advancement next summer will move from leased space on Exchange Street to space the college owns in the Marble Works.

• Growing undergraduate enrollment. College officials noted that the institution four years ago enrolled “an exceptionally large class” with the Class of 2025, which brought total enrollment to over 2,800 students. “This presented challenges, but as we enrolled subsequent classes, we found we could support an undergraduate population of more than our historical 2,500,” college officials wrote. The letter states the college will grow back undergraduate enrollment to between 2,600 and 2,650 in the next few years. But the letter noted that it will not make a “parallel increase in faculty or staff.”

• Evaluating health insurance. College officials said they are assessing health insurance plans, employee contributions and deductibles and plan designs and comparing them to benefits at peer institutions. “If we make changes, we’ll announce them this fall and not implement them until Jan. 1, 2026,” they wrote.

Administrators provided some context on the deficit they’re trying to tackle. They noted the unexpected jump in the projected deficit for this fiscal year came from a few different sources.

“Enrollments at the Institute were lower than we planned for, amounting to $8.7 million of the shortfall,” they wrote. “There were moderate decreases in tuition revenue at the Language Schools, Bread Loaf, and Schools Abroad, though the Schools as a whole remain revenue positive. And we had significantly higher outlays for healthcare, increased costs for some budgetary items unrelated to salaries or employee benefits, as well as interest and depreciation. Together, these accounted for the other $5.4 million of the projected deficit.”

The letter notes that a similar challenge is expected next year, though its anticipated the college will carry a larger portion of the deficit compared to the Middlebury Institute of International Studies (MIIS) and the institution’s other schools.

“We want to emphasize that the deficit we’re addressing in this message is at the College. At MIIS we continue to pursue the four-year plan to turn around enrollments,” college officials wrote.

The letter states that Middlebury officials have been intensely focused on balancing the budget since this past fall.

“We undertook this work with the board’s executive committee and the chairs and vice chairs of the Resources, Strategy, and Risk committees — and recognize now how our attention to the deficit is even more crucial as we see the financial impact of politics on colleges and universities nationwide,” they wrote.

PRESSURE FROM THE FEDS

The Independent asked faculty if there’s concern among the college community about new or growing financial challenges the college might face in light of action at the federal level. Several actions taken by President Donald Trump in recent months have targeted colleges and universities across the country, from the federal funding they receive to diversity initiatives on campuses.

“The prospect of punitive action from the Trump administration is something we’re thinking about on top of everything else — as are most colleges and universities across the country,” Professor Johnson said.

He said he’s also concerned about staying focused on the college’s mission and community.

“One of my major concerns is that continual focus on the bottom line makes it easy — and even necessary — for faculty, staff and students to think more about their own bottom lines, rather than about the broader mission of the college or about our shared interests as a community,” he said. “At a time when higher education is under severe pressure, focus on mission and community becomes even more important.”

The letter also highlighted progress Middlebury College has made with the budget gap, such as continuing to surpass industry benchmarks for its endowment and sticking to drawing 5% from the endowment annually. The college endowment’s value stood at $1.598 billion in June.

“This is the result of the attention we’ve paid to fiscal discipline, and it has improved Middlebury’s long-term financial health, fed our operating budgets, and enabled us to offer competitive aid packages for our students and families,” college officials wrote.

Middlebury College has also raised salaries in each of the past three years, translating to a $22 million increase overall.

“We’ve brought staff salaries to market and also improved the wage differentials for evenings and weekends,” college officials wrote.

They also acknowledged what the college is up against.

“To say it as clearly as possible, our challenge is this: We haven’t been able to balance our books despite significant progress in how we do business. We simply must get ourselves to the balanced budget that has eluded us, year over year, to be able to support our mission today and into the future,” college officials wrote.

Continuing to carry a deficit at the end of each fiscal year is a burden that will eventually hamper Middlebury College’s ability to deliver on its mission, college officials stated.

“Our deficits are continually an outlier among our NESCAC peers, which all operate profitably, experiencing only occasional downturns,” they wrote. “And there are signs that financial pressures will only increase, as we hear of plans, for instance, to tax endowments at 14% or even 21%, up from 1.4% today.”

The letter states that the Middlebury College Board of Trustees has directed senior leadership to create a plan for balancing the budget in the coming fiscal years. While the start of that plan is outlined in the April 2 letter, college officials noted that other steps require more research, which they’ll continue to conduct in the coming months and share with the college community.

Administrators acknowledged the information shared in the letter might be difficult to receive and process.

“We know, too, that we’re delivering this news at a time when issues outside Middlebury bring their own stresses and uncertainties. We’ll be talking a lot in the weeks and months ahead at in-person sessions and on zoom to address your concerns, answer your questions, and share the progress we’re making in this effort,” they wrote.