Oregon’s higher education system is facing one of its most serious financial crises in decades. Over the past 15 years, enrollment has steadily declined at nearly all of the state’s public universities. Meanwhile, state funding remains below pre-recession levels, and federal scholarship programs face an uncertain future. Rising tuition costs have forced many families to question whether a college degree is worth the mounting debt.
Universities Facing Massive Shortfalls
To cope with falling revenues, universities across Oregon are enacting major budget cuts. Southern Oregon University announced plans to reduce its $71 million budget by $10 million, while the University of Oregon is slashing nearly $30 million, including the elimination of 176 full-time positions and 100 student worker jobs.
At Portland State University (PSU), where this writer teaches, the situation is even more dire. PSU faces a $35 million deficit over the next two years, and proposed reductions could mean the loss of more than 200 full-time faculty and staff positions.
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The university’s financial challenges come at a precarious time for downtown Portland’s recovery. PSU is not only one of the city’s largest employers but also a major driver of local economic activity, bringing roughly 20,000 students into the downtown core. Yet according to Portland Clean & Safe, downtown foot traffic remains at only half of pre-pandemic levels—about 21 million pedestrians annually, compared to 42 million in 2019. City leaders have long relied on PSU’s vitality to support the area’s economic revival, but these cuts threaten to slow that progress.
Faculty and Staff Sound the Alarm
PSU President Ann Cudd has said that more than 80% of the university’s budget supports personnel, meaning that workforce reductions are inevitable. Faculty and staff unions disagree, warning that such drastic cuts will severely damage the university’s ability to serve students.
“Cutting this many positions will damage our ability to serve students and support Portland’s recovery,” said Bill Knight, president of the PSU Faculty Association.
The cuts will also impact adjunct faculty, classified staff, and graduate student workers represented by PSUFA, SEIU Local 503 Sublocal 89, and the Graduate Employees Union (GEU). For many employees, these reductions will not only mean job losses but also heavier workloads and fewer resources for those who remain.
Consequences for Students
Students are already feeling the impact. During a PSU Board of Trustees meeting last January, one student testified that recent cuts had eliminated classes across several departments, delaying progress toward graduation.
When programs are downsized or canceled, students lose access to required courses and may be forced to change majors or extend their time in school. Larger class sizes, fewer academic advisors, and reduced access to support services — from tutoring and mentoring to mental health counseling — make it even harder for many to stay on track.
For those already struggling with tuition hikes and the high cost of living in Portland, these reductions could be the difference between graduating and dropping out.
A System in Need of Support
The crisis highlights a deeper, long-term problem: Oregon’s public universities have been underfunded for years. Without meaningful investment, the quality of higher education in the state will continue to erode, leaving future generations without access to affordable, high-quality instruction.
Addressing the issue will require collaboration at every level. State legislators must increase funding for higher education. Donors and alumni can play a vital role by investing directly in student support and scholarship programs. And university administrators must work with — not against — employee unions to build a sustainable financial model that preserves both academic integrity and job stability.
The Road Ahead
Oregon’s universities have long been engines of social mobility and innovation. Allowing them to decline would mean turning away from the very foundation of the state’s economic and cultural vitality.
As Ramin Farahmandpur, a professor in PSU’s College of Education and former vice president for legislative and political action for the PSU chapter of the American Association of University Professors, writes:
“A solution requires all hands on deck — legislators, donors, and administrators working together to secure the educational future our students deserve.”
The future of Oregon’s higher education system depends on whether its leaders can meet that challenge.
