Good morning, and thanks for spending part of your day with Extra Points.

It’s been a few weeks since we did one of these, so let’s break out the ol’ MAILBAG. As always, I accept questions on a rolling basis via Twitter, Bluesky, DMs or email.

Here’s one, via Bluesky reader Joseph Myers:

There are a few different types of cuts going on here. While the exact cuts are currently held up in federal court, the current White House policy is to dramatically slash reimbursements from the National Institutes of Health. For many large research universities, (like your typical Big Ten, ACC or SEC school), these cuts represent potentially hundreds of millions of dollars in lost revenue. Dozens of schools across the country have already announced hiring freezes, and more are expected.

Beyond the NIH cuts, lawmakers are also considering substantial increases in taxation for university endowments, with the rate jumping from 1.4% to potentially over 20%. Plus, the Department of Education is looking into potentially penalize dozens of institutions over “failing to fulfill their obligations under Title IV of the Civil Rights Act to protect Jewish students on campus.”

In the short term, it’s hard to project exactly what the total impact will be on institutions. Predict exactly what this White House is going to actually do is not exactly an easy task, and the current proposed cuts don’t impact all universities the same way. My best understanding is that the brunt of these action will hit research universities, rather than say, tuition-dependent regional public schools, although they will also face potential cuts.

The budget of a Big Ten-type university might be three or four billion dollars, but that doesn’t mean that sudden cuts of over a hundred million won’t be significant. This is not the time for anybody to be asking central campus for another loan. More than a few industry analysts I respect have compared the current budget climate to the time right around COVID, when everybody was slashing payroll.

I don’t expect anybody to change conferences because of these cuts, but we’re also early in this presidential administration. I absolutely expect financial hardship on universities, generally, to impact athletic departments. Jobs are going to go unfilled. Staffers are going to get buyouts. The timing, with House obligations coming up, probably couldn’t be worse.

Reader David asks,

That’s a huge reason why you aren’t hearing about anybody reclassifying right now. But it isn’t the only reason.

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