UNC is cutting $90 million from its budget over the next three years. Here’s how
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- UNC plans $89.2M in cuts, with some reductions phased to 2027–2029.
- ServiceFirst aims to save $25M by 2028; vacancies save ~$5M separately.
- $45M invests in enrollment, AI, safety, and classrooms; Carolina North got $8M.
UNC-Chapel Hill plans to cut $89.2 million from its budget over the next three years. Those cuts will come from academic programs, financial aid, staffing and administrative spending.
The cut is a response to multiple layers of external funding pressure, said Nate Knuffman, UNC’s chief financial officer. At the federal level, there’s uncertainty around the flow of research dollars. At the state level, the absence of a budget has left UNC without enrollment funding for the time being. At the UNC System level, a policy change rerouted dollars for Chapel Hill to other UNC System schools.
“You have to think about expense management and cost control, which is what we’ve done,” Knuffman told The News & Observer. “I think we’ve done it in a measured way. We haven’t rushed to achieve these savings. We’ve really tried to work in a transparent manner with the campus to achieve the savings. But at the same time, we have an obligation to move the institution forward.”
As for what’s on the chopping block, Knuffman said he had one big priority: “protecting our academic mission.” That’s why many of his targeted categories are administrative, he said.
Already, UNC’s budgeting efforts have drawn substantial criticism — particularly the cut to the university’s six area study centers, a move that saved the school $825,000.
But the university isn’t finished cutting.
Cuts to academic programs & financial aid
The university plans to find $7 million in cuts to centers and institutes by 2027, which Knuffman said is a response to the proposed Senate budget. That budget proposes a $34 million cut to centers and institutes across the UNC System. So far, however, no budget has passed.
“We wanted to make sure we were aligned, and also kind of got in front of that and did some work,” Knuffman said. “We have that target of $7 million. Our academic leadership is working through the details on that implementation.”
In addition, the school also plans $2 million in cuts to low-performing academic programs by 2029. There are 28 degree programs, in addition to 19 departments, that qualify for further review and could possibly be cut, former interim provost Jim Dean told the Board of Trustees in January. However, the school’s new provost, Magnus Egerstedt, told the trustees in March that he is reexamining the data about what he prefers to call “underenrolled programs.”
The school will also cut nonresident financial aid by $17.2 million gradually over the next three years.
“This was really the university thinking about how we allocate dollars for financial aid and really prioritizing those dollars for North Carolina residents,” Knuffman said.
Staffing cuts & incentivized retirement
The university is looking to save $25 million through administrative staff reductions, an initiative it’s calling ServiceFirst. The school is taking services once housed in individual departments and schools — namely information technology, human resources, finance, communications and research administration — and creating an overarching, shared-services model.
The initiative prioritizes attrition, or not filling vacant positions, with layoffs referred to as a “last resort.” Still, there’s a lot of anxiety among Chapel Hill staff about how their jobs will change as a result of this shared services shift.
“There’s a natural fear that is understandable,” Scott Savage, who leads ServiceFirst, told The N&O. “I mean, it has a lot of uncertainty at this point.”
The savings related to ServiceFirst will accumulate from $7 million this year to $19.5 million in 2027 and reach $25 million by 2028.
Records obtained by The N&O show that the university spent $50,000 on the first phase of consulting work for ServiceFirst.
In addition to ServiceFirst, the university plans not to fill most positions that have been vacant for more than six months. It estimates that saves nearly $5 million.
Plus, the university is phasing out one program aimed at recruiting diverse faculty and another that funds awards related to faculty development and support, which it says will ultimately save $7.3 million.
The university is also launching an incentivized retirement program, Knuffman said, in hopes of bringing $1.9 million into the budget from retirements.
“You’re providing an incentive for more experienced, but also more expensive, faculty to retire,” Knuffman said. “And then if there is replacement, it would be at a lower salary level. So there’s some savings achieved.”
Food, energy, and other savings
There may be fewer snacks at the upcoming department meeting, according to Knuffman. The university is targeting $4.3 million in savings on food this year.
Additionally, he hopes to achieve $2.9 million in energy savings, a goal that’s pushed out until beyond 2029.
The university is reevaluating its vendor contracts and procurement strategy, and hopes to save $4.8 million there. In addition, categories like “unit optimization” and “other administrative efficiencies” total $11.8 million. Knuffman says those efficiencies might include things like savings on leases and revised space management.
What UNC is investing in
At the same time as these cuts, the university has announced a $45 million investment in other areas. Those areas include enrollment growth, campus safety, artificial intelligence research, and classroom and lab renovations.
Other budget priorities include operational support for the School of Civic Life and Leadership and startup funding for faculty in STEM and engineering.
“We do this because it allows us to make investments in the institution,” Knuffman said. “It allows us to invest in ... these things that are critical to our mission to move the institution forward. We’re not able to do that without doing some of the savings work.”
Additionally, the school is making a big investment in the development of Carolina North, an 230-acre tract of land 1.5 miles north of the main campus. The school’s trustees approved an $8 million initial investment, with many millions more sure to come.
Phase 1 of development includes 2,200 undergraduate beds, plus academic, research, retail and housing space. As for what kind of retail, UNC’s executive director of real estate, Tiffany Lacey, told trustees at their March meeting that she could imagine a dog groomer and a Pilates studio as among the offerings.
This story was originally published April 1, 2026 at 9:00 AM.
CORRECTION: A previous version of this article incorrectly identified which UNC official gave a presentation on low-performing degree programs to the Board of Trustees in January.
