UNH System warns of budget cuts, enrollment decline and federal grant risks

Catherine Provencher, chancellor of the University System of New Hampshire, told the House Finance Committee Division II on Feb. 19 that the system faces a roughly $16.5 million reduction in the governor's proposed budget — about an 8.3% cut — and that the campuses are already planning roughly $20 million in savings for fiscal 2026.

“This is our mission and we take it very seriously,” Provencher said, reading language from RSA 1:87-a that defines the system’s public purpose. She said the system has reduced headcount, cut retirement contributions, raised employee premiums for medical benefits and sold property to respond to lower enrollment.

Provencher told lawmakers that total enrollment in fall 2024 was about 23,000 students across the system, with UNH comprising about 69% of that total. She said research and federal grants have grown substantially in recent years and that “a dollar in is a dollar out” for grant-funded positions and expenditures. She also described a large endowment — about $988 million across the system and affiliated foundations as of June 30, 2024 — and said the system uses a multi-quarter smoothing method to set endowment payouts, which currently average about 4.5% annually.

“State appropriations … have helped keep New Hampshire tuition flat,” Provencher said, and she asked lawmakers to hold funding at the governor’s recommended level rather than cut deeper.

Committee members asked for additional detail. Representative Steve Murray asked how the endowment payout is calculated; Provencher said it is based on a 12-quarter rolling average of market value. Representatives asked for breakdowns of administrative compensation, head count, compensation per student and grant-funded staffing; Provencher and staff agreed to provide those details after the hearing.

Provencher reviewed recent capital investments tied to workforce strategy, including state-supported capital for a UNH life sciences building, a new advanced manufacturing center (the Olson Center) with corporate partners and a NOAA facility on the UNH campus. She said the system is pursuing program-sharing, online coursework and other measures to reduce footprint and costs as enrollment declines, and that the board’s operating-margin target is 1% in the current budget climate with a longer-term goal of 3%.

The chancellor also addressed federal actions and compliance: she told the committee the system monitors a February “dear colleague” letter from the U.S. Department of Education and is reviewing federal grant language and campus websites with general counsel to ensure legal compliance on DEI-related guidance. She further said the system had received stop-work notices on four federal grants totaling roughly $700,000 and learned late in the process that an additional food-safety award would not be renewed. Provencher said the system is watching possible changes to federal indirect-cost rules and that an NIH limit could cost the system about $1 million on NIH-funded indirect costs.

Provencher closed by reiterating the request that state funding not be cut more deeply than the governor’s recommendation and agreed to follow up with requested breakdowns of compensation, head counts, peer endowment-payout benchmarks and details on legal compliance work.

Ending: The committee accepted the UNH materials and asked for follow-up detail on administrative compensation, compensation per student, vacancy and head-count breakdowns, an endowment-payout peer benchmark, and documentation of general-counsel work on grants and DEI-related compliance.