The University of Oregon is cutting about $65 million from its budget after lower-than-expected enrollment of out-of-state first-year students. President Karl Scholz said the university “will need to cut around $65 million from our budget to avoid an ongoing annual budget deficit in the coming years,” The College Fix reported. UO joins a run of schools where missed enrollment targets have opened budget holes this year.
The cuts reached campus housing. UO closed Barnhart Hall and its dining facility for the 2026-27 academic year, and Riley Hall will house students only if overflow space is needed, according to KVAL.
The university expects about a 10% drop in students living on campus, adding pressure to the room and board costs that housing departments rely on.
Why It Matters
Tuition accounts for roughly 80% of UO’s education and general fund, and out-of-state students made up 47.1% of the student body in fall 2025, according to Higher Ed Dive. Nonresidents pay a much higher price than Oregon students, so a smaller out-of-state class removes a large share of revenue.
That out-of-state tuition premium is what makes UO’s budget so sensitive to who enrolls.
University housing staff were told to expect department budget cuts of 8% to 10%, KEZI reported. Staff from both halls are being reassigned, though the university said it can’t guarantee there will be no layoffs. Families watching for trouble at a school can check these warning signs that a college is under financial strain.
The Cuts So Far
- $65 million: The reduction target to avoid an ongoing annual deficit
- Spending limits: A hiring freeze, a compensation freeze and caps on nonessential travel, announced in May 2026
- Barnhart Hall: Closed for 2026-27, along with its dining facility
- Riley Hall: Held as overflow housing only
- Earlier round: $30 million in cuts and more than 100 layoffs the previous year, per Higher Ed Dive
How This Connects
Oregon’s problem looks like others we’ve tracked in 2026. The University of Denver eliminated five departments after a $30 million shortfall, schools have cut jobs and degrees as international graduate students disappear, and eight colleges are closing outright this year.
What’s Next
UO is still building two new residence halls, and hasn’t said whether the closures are permanent.
Watch the Board of Trustees’ tuition vote for 2027-28 and fall enrollment numbers, the two figures that will show whether cuts alone close the gap. Students from neighboring states can also check whether tuition reciprocity agreements lower their price at Western schools.
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.
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