Key Points
- Boston University’s revenue is running $42 million below its budget for the current fiscal year, chief financial officer Nicole Tirella said on November 9, 2026.
- BU’s operating gain shrank from $176.2 million in fiscal 2022 to $4 million in fiscal 2026, as expenses grew almost twice as fast as revenue.
- BU still holds a $4.7 billion endowment and stable credit ratings. The bigger risk for families is program changes, so track your net price at Boston University every year.
Boston University’s revenue is running $42 million below what it budgeted for the current fiscal year, according to a BU Today Q&A with the university’s senior leaders. Chief financial officer Nicole Tirella said the long-predicted trend of expenses outgrowing revenue is now here.
She added that one-time fixes such as broad cuts or a pause on merit raises won’t solve it. BU, which accepted 13% of first-year applicants for fall 2025, is now framing the response as a multi-year restructuring.
This is the second straight year of revenue trouble. In July 2025, BU cut budgets an average of 5% and laid off about 120 staff while closing another 120 vacant positions. Last October, leaders announced a $30 million shortfall tied to weaker graduate enrollment, which BU covered with one-time savings.
Those steps mirror the layoffs and degree cuts spreading across universities that lost international graduate students this year.
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Why It Matters
Tuition revenue covers roughly half of everything BU does. Net tuition and fees brought in $1.39 billion of BU’s $2.73 billion in operating revenue in fiscal 2026, according to BU’s fiscal 2026 consolidated financial report (PDF File). At that level of dependence, a small enrollment miss moves the whole budget. Families comparing schools should know the warning signs a college may be under financial strain.
BU’s endowment can’t necessarily absorb the shortfall either. The endowment grew 16.1% to $4.7 billion in fiscal 2026, but it paid out only $142 million, about 5% of operating spending. Tirella compared the endowment to a savings account that can cover a temporary shortfall but not an ongoing one. Most of the money is also restricted by donors – meaning it can only be used for certain things (like a specific buildings’ maintenance or the salary of an endowed chair), not general operating expenses.
That’s a big part of why colleges can’t just cut costs or spend down reserves when revenue stalls.
How Have BU’s Finances Changed Since 2022?
BU’s operating expenses rose 19.2% between fiscal 2022 and fiscal 2026, while operating revenue rose only 10.8%. That squeezed BU’s operating gain from $176.2 million to $4 million.
BU’s report attributes most of the latest drop, from $48 million in fiscal 2025, to one-time FEMA reimbursements booked that year. Rising costs push schools to raise sticker prices, but colleges now discount tuition 56% on average, which limits how much of each increase they collect.
| Measure | Fiscal 2022 | Fiscal 2026 | Change |
|---|---|---|---|
| Undergraduate Tuition Rate | $58,560 | $69,870 | +19.3% |
| Net Tuition And Fee Revenue | $1.30 billion | $1.39 billion | +7.1% |
| Total Operating Revenue | $2.46 billion | $2.73 billion | +10.8% |
| Total Operating Expenses | $2.29 billion | $2.72 billion | +19.2% |
| Net Operating Gain | $176.2 million | $4.0 million | −97.7% |
| Graduate Enrollment (FTE) | 11,818 | 11,396 | −3.6% |
| Endowment | $2.99 billion | $4.70 billion | +57.1% |
What’s interesting here is the discounting factor: BU’s sticker price for undergraduates rose 19.3% over four years, but net tuition and fee revenue grew just 7.1%. BU’s report says higher financial aid and lower enrollment more than offset its 4.8% rate increase in fiscal 2026.
Graduate enrollment is also hurting the tuition revenue. International graduate students typically pay full price, and with all of the visa changes they have been having a harder time enrolling in the United States, which could reflect part of BU’s drop.
We have long argued that this black box of college pricing hurts families, since the published number tells them less every year.
Where Is The Pressure Coming From?
Graduate enrollment is the soft spot. Chief transformation officer Chris Sedore said some master’s programs BU launched last year are popular, while others are seeing low enrollment. BU’s graduate full-time-equivalent enrollment fell from 11,994 in fiscal 2023 to 11,396 in fiscal 2026, a 5% decline.
Sedore pointed to changes in federal research funding and student loan programs. For graduate students, the biggest change is the new graduate student loan limits that took effect July 1, 2026.
Those limits hit expensive private programs hardest. Grad PLUS closed to new borrowers, so most master’s students can now borrow $20,500 a year and $100,000 total in federal student loans. Say a master’s program costs $40,000 a year. The student must cover the other $19,500 with savings, scholarships or private student loans, whose volume could nearly double in 2026.
Costs keep climbing as well. Sedore cited healthcare and insurance premiums, technology and deferred maintenance on BU’s labs and buildings. In fiscal 2026, employee benefits rose 2.9% even as salaries fell 1.5% and full-time headcount dropped by more than 230.
BU is going to have to cut costs the same way as schools like the University of Maine, which plans layoffs to cover a $9 million non-academic shortfall.
What This Means For Students And Families
For BU undergraduates, nothing in the Q&A points to changes in financial aid.
BU Promise caps the yearly cost at $20,000 for families earning under $200,000 with typical assets, starting in 2026-27. BU’s 2026-27 tuition is $73,024, so families should compare each new financial aid offer to the prior year’s.
Graduate students carry more risk. Students in low-enrollment master’s programs may need to watch if their program is going to be restructured, and how BU protects students already enrolled. Anyone starting a new program should price the full degree against the new federal graduate student loan limits for 2026 before signing up.
BU is not a school on the edge. S&P rates it AA- and Moody’s rates it Aa3, both with stable outlooks. That’s a very different picture from the colleges closing in 2026, most of which showed steep enrollment declines first.
How This Connects
BU’s numbers fit a pattern The College Investor has tracked all year.
International graduate enrollment fell 4.3% in spring 2026, and international college applications dropped 10% as new visa rules took effect.
Public universities are cutting too, with Penn State targeting 47 programs for closure. The schools moving the other way are worth watching: Wheaton College cut tuition by $30,000 for fall 2027, posting a simpler price up front.
What’s Next
Sedore summed up BU’s position plainly: “We can’t cut our way to excellence.” BU plans to make better use of its campuses, build new graduate program models and fold duplicate offices together.
Senior vice president Manuel Cuevas-Trisán said BU will use each vacancy as a chance to shift staff toward new priorities. Watch for graduate program consolidations and the fall 2027 tuition rate, which will show how new graduate student loan limits are reshaping colleges like BU.
Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.