11/07/25 - Curtailment of Discretionary Spending

SUBJECT: Curtailment of Discretionary Spending
DATE: November 7, 2025
SENDER: Francisco X. Pineda, Executive Vice President for Business and Operations and Chief Operating Officer and Loretta Ferrari, Vice President of Finance and Budget and Chief Financial Officer
AUDIENCE: See distribution list below

We are writing today to share an update on our next steps to address the university’s structural budget deficit and our work to ensure a strong, sustainable future for The New School.

Over the past several months, university leadership has communicated about our financial challenges and the underlying trends driving those challenges in numerous presentations, town halls, and information sessions. Recordings and related materials are available in Guru for anyone who wishes to review or revisit this information. It is critical that all employees understand the seriousness of these conditions and the shared responsibility we have in responding to them.

As we are well into the second quarter of the fiscal year, we are facing a significant shortfall in enrollment alongside rising operating costs, which have further increased our structural budget deficit. To date, the university has taken a number of steps to address our financial realities, including instituting a hiring freeze, reviewing vacant positions, and improving the management of our real estate portfolio. While each is an important step, these measures are not enough by themselves, so we must take further immediate action to preserve the university’s financial stability.

To this end and effective immediately, all units and colleges must pause discretionary spending of unrestricted funds. Discretionary spending refers to funds spent on non-essential expenses that can be reduced, deferred or eliminated without detriment to the health and safety of our community, compliance obligations, delivery of academic programs or impact to student retention and recruitment, including but not limited to:

• Non-essential travel
• Non-essential events, hospitality, and entertainment
• Equipment or supply purchases not critical to essential operations
• Non-academic temporary staffing or consulting engagements not already contractually obligated

Expenditures that are essential to maintaining core academic, research, compliance, or student service functions may proceed but must be reviewed carefully at the college or divisional level. College and unit leaders should consult with their budget officers and Finance before initiating any new commitments.

Modest expenditures for holiday gatherings will be permitted in strict accordance with the university’s business expense policy on funding employee gatherings. Please note that expenditures in excess of the amount permitted by the policy will be disallowed.

Additionally, budget amendments or transfers between worktags are not permitted without explicit written approval from Finance. Any FY26 budgeted expense line items that are under budget or are no longer needed cannot be repurposed. This funding will be needed to reduce the deficit.

Finance will continue to collaborate with the Provost’s Office and college and administrative unit finance leads to update financial projections and identify additional cost-containment opportunities. Updated guidance for the remainder of the fiscal year will be provided.

We understand the impact these measures will have on our community, and recognize they require collective focus and careful decision-making. Your partnership, engagement, and continued stewardship of university resources are essential as we work toward restoring long-term financial sustainability.

Please share this memo with anyone on your team who needs to have this information. Thank you.