Northwestern University is changing its tuition benefits program and health insurance for its staff and faculty beginning next year.

According to the university, the changes are due to rising costs and other factors straining the school’s finances.

In an email earlier this month, the university informed staff and faculty that on Jan. 1, 2026, it will change from Blue Cross Blue Shield to UnitedHealthcare and new dental and prescription insurance providers.

The move is forcing staff to petition the board of trustees to allow them to keep the Blue Cross.

The university said that without the changes, employees would pay more, and the school would be forced to make additional cuts in other areas beyond what they’ve already announced.

Changes to the tuition benefits program, which allows staff to take courses at a discount, will also be made for new and returning hires. Current faculty and staff will not be affected by the changes.

Now, the school will cap the program at $12,000 per year.

Two months after the Trump administration froze $790 million in federal funding for Northwestern, University leadership introduced additional financial changes to address challenges in the wake of the freeze.

A faculty and staff hiring freeze and reductions to the permanent administrative and academic budgets are among the measures announced in a Tuesday message to the NU community — adding NU to the growing list of universities cutting spending in a time of uncertainty for higher education.

In the message, University leadership stated NU has now reached a need to implement a “series of cost-cutting measures” to ensure fiscal stability, citing potential federal changes to increase the endowment tax, decreased international student enrollment and overall reduction in federal research funding.

Other changes announced include future “modest” changes to employee tuition benefits, cutting merit salary increases, changes to NU’s health insurance program, reduction in planned investments for buildings and additional non-personnel budget reductions.

These new measures expand upon initial cost reductions announced in February, which implemented a 10% non-personnel spending reduction and a staff hiring review process.

“We continue to fight in myriad ways to get our federal funding restored, and to minimize the impact on our community,” the University leadership wrote in the announcement. “We hope and are reasonably optimistic that these efforts to restore our federal funding will bear fruit.”

The announcement stated more information will be released over the next few days and weeks.

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Northwestern University is planning to reduce staff and make other cuts as it grapples with rising costs and federal funding uncertainties.

The plans have angered some staff and faculty who say the university should be consulting with them before making any significant announcements.

On June 10, Northwestern University sent an email to staff and faculty announcing it would implement cost-cutting measures, including a hiring freeze and “decreases in the total number of staff positions.” It also said staff would not get bonuses next year, that the university was switching health insurance companies and there would be changes to the tuition benefits program, which provides employees with financial assistance toward the cost of courses.

“Like a number of our peer universities, we have now reached a moment when the university must take a series of cost-cutting measures designed to ensure our institution’s fiscal stability now and into an uncertain future,” the email said. “These are not decisions we come to lightly.”

Luís A. Nunes Amaral, an engineering professor, said university leaders should be inviting faculty members to the table to talk about upcoming changes.

“They’re not asking us, ‘What things would you prefer to give up if we have to give up certain things?’” Amaral said. “There is this idea of a shared governance, and it’s a complete sham.”

The university is facing financial pressure due to the federal funding freeze of $790 million implemented by the Trump administration in April . Even so, Amaral said he thinks the Board of Trustees at the university is using these financial concerns as an excuse to “show who is in charge.”

“They want to put us in our place,” Amaral said. “And one way to put us in our place is to show that they can take away benefits that we’ve had for a long time…it’s deeply insulting and deeply disrespectful.”

Jackie Stevens, chapter president of the American Association of University Professors and a political science professor at the university, said “faculty are both outraged and despondent about this perpetual battering from the administration.”

Stevens said the university has “[refused] to work with us in order to combat the forces that are really driving this, which is the Trump administration.”

A student worker, who asked to remain anonymous out of fear of retaliation from the university, said cuts to her tuition benefits mean she’ll have to take fewer classes and more time to get her degree.

That benefit is currently 90% tuition coverage with no annual maximum. But it’ll be capped at $12,000 per year. Tuition for a full-time Master’s student in the 2024-2025 school year was $22,304 per quarter, according to Northwestern’s student finance website.

“This is like a divestment,” she said of the change. “In a place that is supposed to prize higher education, to put this barrier up is like they’re saying one thing, but then they’re doing something else.”

University spokesperson Jon Yates did not comment and instead directed the Sun-Times to previous email communication and university announcements to staff and faculty members.

Kate Banner, a research director at Northwestern’s medical school, said staff and non-tenured faculty are feeling anxious about potential layoffs.

“The staff are the people who do so much of the work,” Banner said. “They’re the unsung heroes of research. If we don’t have a way to support and respect that backbone of the research enterprise, then it really calls into question the future of this work.”

Northwestern is also switching staff and faculty from Blue Cross Blue Shield to UnitedHealthcare in October. United has faced backlash over high costs and denied claims. There are nearly 1,500 signatures on a petition asking the Board of Trustees and administration to give employees the option to maintain their Blue Cross coverage.

The university said Tuesday that it is committed to “providing affordable health care coverage options to our community.”

Northwestern University announced new cost-cutting measures Tuesday, including a hiring freeze, in response to rising prices and a crackdown on higher education by the Trump administration.

The news came in a letter to faculty and staff from President Michael Schill, Provost Kathleen Hagerty, and Chief Financial Officer Amanda Distel. It announced a faculty and staff hiring freeze, as well as changes in the health insurance program and tuition benefits. The letter stated that budget reductions in academic and administrative departments that are “likely to include decreases in the total number of staff positions.” Non-personnel cost-slashing measures will be taken, including slowing planned capital improvements.

It was not immediately clear what these changes to departmental budgets and healthcare plans would look like, and the letter promised more information would be forthcoming.

This comes following an announcement from the University in February announcing initial cost-cutting measures that included limiting spending and adding additional checks on expenditures over $25,000. That same month, the Trump administration froze more than $790 million in grants to Northwestern.

“We understand that none of this is news you want to hear — and it certainly is not news we want to deliver,” the letter read. “Nevertheless, we feel that transparency is important so that everyone has a shared understanding of the challenges that lie ahead.”

In an email to faculty and staff on Tuesday, Northwestern University announced it would implement several cost-cutting measures, including a hiring freeze and budget cuts, due to rising costs and uncertainty at the federal level.

The university faces serious financial pressure following the freezing of $790 million in federal funding by the administration of President Donald Trump in April. Northwestern has reached a moment where these measures are necessary to ensure the university’s fiscal stability now and “into an uncertain future,” President Michael Schill and other university leadership said in the email.

Pointing to potential federal changes like increased endowment tax, inability to enroll international students and reduction in federal research funding, the university faces “serious financial impacts that must be addressed immediately.”

The cost-cutting measures include administrative and academic department budget cuts which Northwestern said “are likely” to include staff reductions, changes to their health insurance program; “modest” changes to the tuition benefit for employees’ dependents and nonpersonnel budget cuts to the university’s capital expenditures for buildings and systems which could affect service, according to the email.

The news comes at a time when the university has been forced to shell out more than $10 million a week to keep vital research afloat while continuing to pay graduate workers and scientists.

The recently announced cost-cutting measures expand upon the university’s February announcement, which implemented a 10% cut to nonpersonnel budgets and required review of all personnel actions, including hiring and raises.

“We continue to fight in myriad ways to get our federal funding restored, and to minimize the impact on our community,” Northwestern leadership wrote in the email. “We hope and are reasonably optimistic that these efforts to restore our federal funding will bear fruit, but we have asked our deans and other academic leaders to work with us to plan for a variety of scenarios in case they do not.”

More information is set to be released over the next couple of days and weeks, according to the announcement.

Carole LaBonne, a professor of molecular biosciences at Northwestern, said she fully expected various cost-cutting measures to offset the damage of the federal funding freeze, as administrators have been transparent about recent financial struggles. She did not however expect changes to benefits or nonpersonnel budget reductions.

“In retrospect, it’s not surprising,” LaBonne told the Tribune Tuesday. “We have been living in existential dread.”

LaBonne also said she understands the decision to pause hiring at the faculty level, but the reality is that it will limit job opportunities for postdocs and researchers, which can have detrimental consequences for the academic community.

“It breaks my heart to agree, because the more universities that end up having to do that, and there are quite a few that are piling up — the fewer jobs that are going to be available for the fantastic postdoctoral scholars who are coming up for the job market and are the future of research in this country,” LaBonne said. “I have one of those postdocs who’s going to be looking for jobs in the fall, and the jobs are few and far between.”

The federal funding freeze has already gravely affected early-career scientists at Northwestern. With all of Northwestern’s National Institutes of Health funding frozen, research labs have to limit how many new doctoral students they take in to train, which means fewer students will get the opportunity to study and work at the university’s elite research facilities, LaBonne said.

In an email to the Weinberg College of Arts & Sciences, the college’s dean, Adrian Randolph, offered a silver lining to Northwestern’s decision not to offer salary increases this year, except to those who have already received a contractual commitment.

“This step, while disappointing, will help us limit other cuts,” Randolph said in the email. “I want to reassure all faculty and staff members that we will include this year’s review of activities and achievements in any future evaluations linked to salary merit increases.”

Randolph also suggested “some very difficult decisions” will need to be made regarding the size of the college’s workforce.

“Vacant positions will, for the most part, remain unfilled. I want to acknowledge the hard work that went into developing faculty hiring plans and, while we cannot act on them now, they will continue to be valuable as we imagine how best to position the College in the coming years,” he said.

Randolph said the goal is to minimize layoffs.

Jackie Stevens, a political science professor at Northwestern University, said she’s particularly concerned about the impact on college programs and criticized school leaders for prioritizing administrative expenses over education.

Stevens cited Northwestern’s $43.5 million settlement with the Department of Justice in 2024 to settle a 2022 claim that it drove up the cost of attendance for students on financial aid. The administration could have used those funds — and other funds that have been used in legal fees — to mitigate budget shortfalls, Stevens said.

“I mean this statement is what one would expect of the CEO of Disney and not the president of a nonprofit university with a $14 billion endowment,” Stevens said. “To me, the board and the administration are refusing to invest in the education of the students, but they’ll draw down funds to compensate for their poor management.”

Stevens said she’s hanging on to the part in Schill’s letter that alludes to “reductions in administrative and academic unit permanent budgets.”

“It’s quite alarming and not justifiable,” she said. “They really do need to be prioritizing the academic units. That’s the point of the university.”

University endowment funds typically follow a strict set of long-term guidelines that dictate how assets are used and only a limited amount of the endowment is liquid, LaBonne explained.

“Most of it is directed towards particular donor wishes. You cannot just go into the endowment to do anything you want with it,” she said. “And remember that (Northwestern) is currently covering research to the tune of $40 million a month. There are only two places that can come from — the endowment and borrowing, and I imagine that we’re already doing a bit of both.”