The Harvard administration and the Harvard Union of Clerical and Technical Workers (HUCTW) seem to be talking past each other about the upcoming Faculty of Arts and Sciences (FAS) restructuring and layoffs. One debate is over if the restructuring is well designed while the other is over if it’s necessary at all.
FAS says the restructuring addresses two connected problems: a longstanding structural deficit of $350+ million, and an administrative model that has become too “complex, fragmented, and difficult to navigate.” A task force identified more than 1,500 unique job titles, 60+ separate financial, HR, and administrative systems, and hiring processes with as many as 67 steps. FAS says the new “federated” model, which would likely mean layoffs of up to 25% of FAS administrators, would reduce that complexity.
No restructuring of this scale is likely to satisfy everyone, particularly when it includes layoffs. That makes it even more important for Harvard to persuade its community not only that the particular restructuring it’s chosen is thoughtfully designed, but also that it is necessary (for operational, financial, or both kinds of reasons).
HUCTW’s latest message raises questions about both the design of the restructuring and the financial case behind it. HUCTW’s implementation and design questions are important in their own right. But its message also highlights something broader: many employees still understand FAS’s finances very differently than the administration does. If employees are comparing “$7.7 million deficit” to a “$365 million projected structural deficit” as though they measure the same thing, Harvard hasn’t explained the financial concepts clearly enough.
HUCTW’s overarching financial claim is that “Harvard is not facing a financial crisis,” because the University and FAS have “experienced no significant financial losses,” making layoffs “a choice, not a necessity.” Three examples illustrate the disconnect and where the Harvard administration’s financial explanation has fallen short:
A yearly deficit isn’t the same as a structural deficit.
What HUCTW says: FAS’s Fiscal Year (FY) 2025 report shows “only a $7.7 million deficit (not $365 million)” and the prior four years “showed surpluses,” so FAS isn’t in a “crisis.”
The disconnect: A structural deficit is about whether recurring revenues can support recurring costs over time — not just whether a school ended one fiscal year slightly up or down. FAS says its long-term problem includes long-running fiscal sustainability concerns, deferred building renewal, and future obligations like the endowment tax. FAS can report an annual surplus for years while its underlying finances become increasingly unsustainable.
Building renewal costs aren’t financially separate from the rest of FAS.
What HUCTW says: Building renewal costs are “paid for by a separate capital projects budget funded by donations, not by staff salaries or through the School’s operating budget.”
The disconnect: Staff salaries don’t come exclusively from a sealed, salary-only pool. FAS allocates resources across salaries, programs, capital needs, and other priorities; Harvard’s own capital-project guidance says projects can be financed “from donor funds, sponsored funds or unrestricted funds.”
The endowment tax isn’t distant or manageable enough to ignore.
What HUCTW says: Harvard “retains significant ability to mitigate the financial impact” of the endowment tax, which it says “will not begin to take effect until mid-2027.”
The disconnect: An annual, recurring endowment tax estimated at roughly $390 million and growing isn’t something Harvard can wait to “find” money for later. If you as an individual knew your income would permanently decline starting next year, would you wait until then to adjust your spending?
And as we wrote in May, Harvard can’t simply manage the tax away by delaying asset sales because it needs cash from the endowment to fund operations. Financial experts talking to The Crimson have since reiterated that Harvard can blunt the tax “only at the margins.”
The communication challenge is especially important because many of the underlying financial concepts can be quite unintuitive. Structural deficits, capital budgets, endowment distributions, and recurring vs. one-time costs are not concepts most faculty or staff encounter in their day jobs. Until Harvard builds a stronger shared understanding of FAS’s financial situation, debates over the restructuring are likely to remain debates about different interpretations of the same numbers.
In future Weekly Briefings, we’ll unpack several of these concepts in detail, including what a structural deficit actually is and why it isn’t the same thing as an annual operating deficit.
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Q: Could Harvard graduate students lose federal loan access under ED’s proposed post-graduation earnings test?
Only one program: a Master of Museum Studies at Harvard Extension School. Under ED’s new proposal, graduate programs would fail the earnings test if four years after graduation, their alumni don’t earn more than the median working adult ages 25-34 with only a bachelor’s degree. Programs that fail twice in three years could lose access to federal student loans; the rule is not final yet, and it would not take effect until fall 2027, so current students are not immediately affected. At Yale, the rule would prohibit students from taking out loans for its graduate programs in music and visual arts.
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FYIs
Harvard College Staff Expected To Return To Five-Day Office Requirement
Harvard College staff are expected to be required to work on campus five days a week beginning this fall as part of the Faculty of Arts and Sciences’ (FAS) broader staff restructuring, according to The Crimson.
The change hasn’t yet been officially announced, and a Harvard College spokesperson said conversations about hybrid work are ongoing. Harvard’s current flex-work policy allows decisions to be made at the school, department, or unit level.
FAS Dean of Administration and Finance Warren Petrofsky said in recent town halls that some roles may require “more time on campus,” with changes expected no earlier than the fall.
The Harvard Union of Clerical and Technical Workers (HUCTW) said it would “strongly push back” on the proposed change and encouraged affected union members to file grievances. HUCTW’s contract includes flex-work provisions, including a joint University-union committee that provides recommendations “on the advantages of increased flexibility.”
Harvard Seeks Summary Judgment in Francesca Gino Lawsuit
Harvard has filed for summary judgment in former Harvard Business School (HBS) professor Francesca Gino’s lawsuit, asking a federal judge to rule in its favor without a trial.
Gino is challenging Harvard’s decision to revoke her tenure and terminate her employment. Gino’s lawsuit challenges Harvard’s research-misconduct process, sanctions, and subsequent tenure revocation. Harvard says an HBS investigation found she committed research misconduct in four studies, and that a later tenure removal process found by clear and convincing evidence that her conduct warranted removal from her tenured appointment.
Harvard argues Gino’s claims — including sex-based discrimination, breach of contract, retaliation, and declaratory relief — fail because the University provided the required process and acted based on evidence of research misconduct, not “discriminatory animus.”
Harvard’s filings include new detail on factual disputes related to the case:
Gino had argued Harvard’s process unfairly constrained her defense, including by allowing her only two personal advisors; Harvard says Gino was represented during the HBS process by outside counsel “with experience in representing individuals accused of research misconduct” and also engaged an attorney at the law firm K&L Gates to assist her.
Harvard also says that across a three-and-a-half-year process, a committee of 26 professors, administrators, and Harvard Corporation fellows reviewed the evidence and reached the same conclusion that Gino violated Harvard’s research integrity standards.
Judge Blocks ED’s Narrow “Professional Degree” Rule for Graduate Loan Caps
This week, a federal judge in the District of Columbia temporarily stayed (paused) the Department of Education’s (ED) new rule defining which graduate programs count as “professional degrees” for higher federal student loan caps, pending final resolution of the case. The ruling doesn’t restore Grad PLUS loans or block the new caps, which begin July 1, 2026.
Under the One Big Beautiful Bill Act (OBBBA), Congress eliminated Grad PLUS loans and capped federal borrowing at $20,500 per year and $100,000 total for “graduate” students and $50,000 per year and $200,000 total for “professional” students. ED’s rule would have limited “professional” status to 11 fields, including law, medicine, dentistry, and theology.
At Harvard, the only degrees that qualified for the higher “professional” cap under ED’s rule were Harvard Medical School’s MD, Harvard School of Dental Medicine’s DMD, Harvard Law School’s JD, and Harvard Divinity School’s MDiv.
The court said that in OBBBA, Congress adopted an existing ED definition of “professional degree” that listed examples of those degrees but didn’t limit the category to those examples. While ED will ultimately need to interpret which programs qualify, the court said it cannot do so by converting an existing statutory open-ended definition into an exclusive list of those 11 fields, as its rule would have done.
For now, programs outside ED’s 11-field list will be evaluated under the broader definition of “professional degree” (not just the 11 examples) while the case continues. It remains unclear which, if any, additional programs will qualify. ED hasn’t said whether it will appeal or issue new guidance, and both sides must propose a schedule for further proceedings by July 2.
More News
More News at Harvard
FAS Current: “Naomi Weiss to lead Center for Hellenic Studies”
Harvard Magazine: “‘Where Harvard Went Wrong,’ According to Harvey Mansfield” — feat. Government professor Harvey Mansfield (AB ’53, PhD ’61)
Harvard Magazine: “Tarek Masoud Wins Honor For Exploring Disagreements” — feat. HKS professor and HKS Middle East Initiative faculty director Tarek Masoud
More News Beyond Harvard
New York Times: “Yale Seeks Trump Administration Deal as It Faces Sprawling Investigation”
Bloomberg: “Employers Want AI-Enabled B-School Grads. But Do They Know What That Means?”
Columbia Daily Spectator: “Columbia committee recommends against banning research funding from fossil fuel companies”
Columbia Daily Spectator: “Columbia reappoints 3 deans following redesigned leadership review process”
U.S. Department of State: “Outcomes of the Second Pax Silica Summit” — sharing news that “United States and Stanford University Launch Foundry School Initiative”
Free the Inquiry (Heterodox Academy): “Where does Viewpoint Diversity Matter the Most?”
All Else Equal (UPenn Lauder Institute): “The Academic Journal System Is Broken, Here's How to Fix It” — podcast episode hosted by Wharton professor Jules van Binsbergen and Stanford Graduate School of Business professor Jonathan Berk
Inside Higher Ed: “Will Private Lenders Fill the Loan Limit Gap?”
Higher Ed Dive: “EEOC opens antisemitism probe into NEA, Brandeis Center says”
Higher Ed Dive: “A new site tracks foreign gifts to colleges. Is it misleading?”
Bloomberg Law: “State Supreme Courts Can Resolve Early Legal Recruiting Mess” — op-ed by NYU Law professor Jeanne Fromer (JD ‘92) and Stanford Law professor Mark Lemley
Wall Street Journal: “Bankruptcy and Higher Education” — op-ed by George Mason University law professor Todd Zywicki
Wall Street Journal: “Don't Cry for the Education Department” — op-ed by Emma Camp
New York Times: “A Bold Idea to Open Up Elite Colleges” — op-ed by James Murphy and Ryan Cieslikowski of the nonprofit Class Action