Princeton University President Warns of Multiyear Budget Adjustments Due to Slumping Investment Returns
Princeton University President Christopher Eisgruber informed the campus community on Monday that the university is preparing for budget and operational changes set to begin soon and extend over years as leaders respond to weaker and more volatile investment performance in the school’s endowment.
Eisgruber stated, “We expect that budgetary and operational changes will begin in the coming months and occur over a multiyear period.”
He added, “Princeton will continue to evolve, but in the future, it will more often have to do so through efficiency and substitution rather than addition.”
The president linked this outlook to recent endowment results, noting it has become harder to sustain growth through new spending. “This decline has been hard to see because returns have been volatile,” he said. “In other words, returns have not been a steady 8% or 10%; instead, they have been all over the map.”
Princeton’s investment gains have lagged those of peers in the Ivy League over recent years. Financial data shows Princeton posted the lowest three-year annualized return among Ivy League schools at 4.3%. The university recorded an 11% investment gain for the fiscal year ending June 30, 2025, with its endowment valued at $36.4 billion.
Additionally, the financial outlook has been complicated by federal scrutiny during President Donald Trump’s second administration. In April 2025, Princeton disclosed that the federal government had suspended several dozen research grants from agencies including the Department of Energy, NASA, and the Department of Defense (now Department of War) amid an investigation tied to allegations of antisemitism on campus.
Eisgruber emphasized cooperation with federal inquiries while underscoring the university’s commitment to combating discrimination and protecting academic freedom. However, he did not specify operational changes, suggesting potential cost reductions, consolidation of functions, or reallocation of resources rather than expanding staffing or launching new initiatives.
His focus on “substitution” indicates a shift toward higher-priority needs over additional commitments. The president’s message sets expectations for a gradual transition with changes starting soon but unfolding over multiple years.
While Princeton remains one of the nation’s wealthiest universities, Eisgruber’s remarks highlight that endowment performance and associated uncertainties are likely to play an increasingly significant role in shaping planning and spending decisions across the institution.
By Solange Reyner | Monday, 02 February 2026 07:03 PM EST
