The New School $48M deficit

The New School’s budget problem is not a one-semester dip. In messages to the campus this spring, university leaders said the New York institution was dealing with a multi-year structural deficit, declining enrollment and a workforce reduction tied to a broader academic reorganization. President Joel Towers told the community on March 3 that enrollment had fallen about 20% from the university’s fall 2021 peak, while S&P had cut the school’s credit rating to BBB from BBB+. (blogs.newschool.edu 1) (blogs.newschool.edu 2) The staffing cuts were part of that reset. Higher Ed Dive reported on March 18 that The New School planned to reduce its workforce by 15% through layoffs and eliminating vacant positions, on top of a 7% reduction already underway through voluntary buyouts. (newschool.edu) University leaders said personnel costs account for about 60% of expenses. ### Where did the financial hole come from? Joel Towers said on March 3 that The New School’s “tuition-dependent budget model” was no longer viable at its current scale after several years of enrollment declines. In the same message, he said the university faced a “historically significant, multi-year structural budget deficit” and needed to complete changes by the end of June 2026, the close of its fiscal year. (blogs.newschool.edu) The March 13 restructuring announcement, as summarized by Higher Ed Dive, said enrollment had declined while operating expenses had increased. The publication reported that the university had previously described the deficit as about $30 million in early March, before later public discussion around a roughly $48 million gap. (highereddive.com) ### Why are layoffs at the center of the plan? The March 18 Higher Ed Dive report said full-time faculty and staff were expected to receive layoff notices by June, with cuts varying across units. Provost Richard Kessler and Chief Operating Officer Francisco Pineda said the school would eliminate unfilled positions before turning to what the university called “calibrated” layoffs. (blogs.newschool.edu) Federal data cited by Higher Ed Dive put The New School’s fall 2024 workforce at roughly 3,100 employees, including about 2,000 dedicated to instruction. A 15% reduction from that base would amount to several hundred positions, though the university said the mix of layoffs and vacancy eliminations would differ by division. (highereddive.com) ### What academic programs are being cut or paused? The New School has paired job cuts with academic consolidation. Student newspaper New School Free Press reported in February that restructuring proposals included combining colleges, closing, overhauling or merging about 30 programs or majors, and pausing most PhD admissions at The New School for Social Research. (highereddive.com) The university’s own admissions pages now show that all PhD programs at The New School for Social Research except Clinical Psychology are paused for the 2026-27 academic year while administrators conduct what they call a comprehensive review. Program pages for anthropology, economics, philosophy, politics, sociology, psychology and public and urban policy carry that notice. (highereddive.com) ### How far has enrollment fallen? Towers said the decline was about 20% from the fall 2021 peak. The March 13 message, as indexed on the university’s site, said domestic high school pipelines were shrinking and international enrollment was under pressure. (newschoolfreepress.com) New School Free Press reported that administrators had tied the deficit to falling enrollment and retention, and said about 85% of the university’s operating revenue came from tuition and related student revenue such as dining and residence halls. (newschool.edu) ### What happens next? June 2026 is the key date in the university’s own timeline. Towers told the community on March 3 that the restructuring work had to be completed by the end of June, when the fiscal year closes. Higher Ed Dive reported that the university aimed to reach its “fully operational size,” aligned with enrollment, by the fall. (blogs.newschool.edu) The next public markers are already visible on The New School’s admissions pages. For 2026-27, most NSSR doctoral programs remain closed to new cohorts, while the Clinical Psychology PhD keeps a December 15 application deadline. (newschool.edu) (blogs.newschool.edu) (newschoolfreepress.com)