CSU is facing a potential funding gap of $38-$48 million for Fiscal Year 2027, beginning July 1, 2026. This is due to converging factors including continued state budget shortfalls, shifts in enrollment composition, rising health care and benefit costs, and increases in mandatory costs such as insurance, utilities, debt service, and other mandatory expenses.

The state of Colorado is facing an annual budget shortfall that could exceed $1 billion for the second consecutive year. The current proposal for higher education support would increase higher education funding across the state by just $10.6 million, or less than 1%. This is significantly below the $61.2 million funding increase needed to maintain current service levels across the state’s higher education institutions. The state of Colorado ranks 43rd nationally in per-student state funding for higher education.

CSU has strong overall enrollment. In Fall 2025, CSU welcomed an incoming class with the largest cohort of Colorado residents in history. However, enrollment by nonresident and international students softened this year at many universities, including CSU. These students typically pay non-resident tuition rates, which are higher than resident rates. As a result, the university expects $10.8 million in lost tuition revenue. Early signs suggest possible improvement next year, but the full impact will not be known until enrollment data (i.e., census data) is available in the Fall of 2026.

Health care and benefit costs are rising nationally, and CSU is experiencing those same increases. Cost increases will add $15 million in new expenses to CSU’s E&G budget next year.  

The increase is driven by higher health care costs as well as expenses such as pensions, paid family and medical leave (FAMLI), and vision and dental coverage. CSU remains committed to maintaining strong and affordable benefits for employees even as these rising costs add pressure to the university’s operating budget. Benefit plans and premiums for calendar year 2026 are set and will not change. There may be changes in calendar year 2027, as it is typical to make some adjustments from year to year.

Units across the university are taking several immediate steps, which include limiting hiring, conducting a comprehensive review of all vacant positions, and limiting discretionary spending such as travel, training, and events. All units across the university are exploring and planning for unit-based budget scenarios that would lead to an overall institutional budget reduction of up to 8.75 percent. Units are evaluating and formulating their proposal scenarios now, with decisions expected in April and May.  

This spring, CSU will more stringently apply the hiring chill that was implemented last year. The objective is to avoid net new positions for the remainder of the fiscal year, and likely into next fiscal year. Exceptions will continue to be granted for mission-critical roles, life, health, and safety needs, grant-funded roles, and positions funded by restricted gifts. This helps manage recurring personnel costs while protecting essential operations.

Conversations with campus stakeholders are ongoing, and a final compensation decision is expected in late February.

CSU continues to engage in regular communication with shared governance groups, including Faculty Council, Administrative Professional Council, and Classified Personnel Council. CSU’s executive leadership team will provide frequent budget updates as they have done previously through open budget sessions and emails to the university community. The SOURCE e-newsletter will also share budget updates as they are available.