Charting Our Future: Questions and Answers
After several years of operating with a structural cash flow operating budget deficit, Earlham College is taking significant, carefully considered steps to secure its long-term financial sustainability and preserve the transformative education that has defined it for generations.
Guided by our Quaker values and deep commitment to our students, we are working to align our resources with our mission by reducing expenses, exploring new revenue opportunities, and positioning Earlham to thrive in a changing higher education landscape.
The process is challenging and will involve difficult decisions, but our goal is clear: to emerge as a stronger, more resilient Earlham that continues to provide an exceptional liberal arts education rooted in respect for persons, integrity, peace and justice, simplicity, and community.
I: Process and purpose
While we had hoped that investments over the last decade to stand up new academic and athletic programs, including the construction of new facilities, would attract enough enrollment interest to offset rising costs, this has not been the case. Our expenses have continued to exceed the revenue we bring in each year.
Higher education has faced steep headwinds in recent years. Demographic shifts and declines in the number of students graduating high school, particularly in the Midwest — a key recruiting region for Earlham — have meant increased competition among our peer institutions for enrollment. International enrollment, which faced steep challenges during the COVID-19 pandemic, declined this year due to new U.S. restrictions on global entry from some countries and challenges to students’ ability to access visa appointments. The problems of the wider world have compounded these pressures, as institutions across the country, including Earlham, continue to feel the effects of inflation, tariffs, and other economic forces.
To secure Earlham’s future so that new generations of students can continue to benefit from an Earlham education, we need to make hard decisions now regarding how we spend our resources and consider ways to build a more sustainable future for Earlham.
President Paul Sniegowski convened the Consultative Working Group for a New Earlham (CWG) in fall 2025, following a consensus recommendation that emerged from the Board of Trustees’ June retreat. The group’s membership grew out of retreat participants and includes a broad representation of teaching faculty, administrative faculty, and staff from the College and School of Religion. Charged with addressing Earlham’s financial challenges and helping to plan a sustainable future, the CWG meets weekly throughout the semester, with President Sniegowski providing biweekly updates to faculty and staff.
The group is determining shared principles rooted in Earlham’s longstanding values to inclusively guide decisions across campus related to its charge, and it is launching the College’s first comprehensive strategic planning process since 2015. Working collaboratively with faculty committees such as the Curricular Policy Committee and Faculty Affairs Committee, the CWG is helping to define a framework through which Earlham can emerge stronger. The faculty committees, as outlined in the Faculty Handbook, are developing new curricular models and making recommendations to President Paul Sniegowski and the Board of Trustees for the specific academic program changes and associated personnel reductions that are needed. Together, these efforts aim to position Earlham for long-term strength and stability.
The full charge of the CWG is as follows:
- The CWG will develop, in broad consultation with the Earlham community, administration, and Board, a new Earlham Strategic Plan that addresses Earlham’s challenges and opportunities and is adopted before the 2026-27 academic year.
- Consistent with the outlines of the developing strategic plan, the Consultative Working Group (CWG) will recommend, in consultation with relevant campus partners, criteria for cost reductions and revenue increases that will reduce Earlham’s operating deficit by $6M in 2026-27, $6M in 2027-28, $4M in 2028-29, and $2M in 2029-30, such that Earlham achieves a balanced budget in 2029-30. No sector of Earlham can be off-limits to potential cost reductions given the magnitude of budget relief required. General areas for reduction include, but are not necessarily limited to:
- Non-personnel and personnel costs in academic programs and departments, including administrative faculty, tenured and pre-tenure teaching faculty, and staff.
- Non-personnel and personnel costs in non-academic programs across campus, including administrative faculty and staff at all levels of administrative offices, athletics, and student life.
- Consulting and other contracts.
- For reductions in teaching faculty in Earlham College, the CWG and president will follow the provisions of section O of the Earlham College Faculty Handbook, which specifies:
- The development of an overall written plan for departments and programs subject to discontinuance or reduction that is based on Earlham’s mission and objective of educational service, in consultation with the Faculty Meeting. (This plan may include changes to the structures of departments, majors, minors, and general education.)
- That the Curricular Policy Committee (CPC) and Faculty Affairs Committee (FAC) are responsible for recommending specific reductions of academic programs or departments.
- That FAC is responsible for recommending specific personnel decisions.
- That final action will be taken by the President in consultation with the Academic Dean (Provost) and subject to approval by the Board of Trustees.
- That the pattern of enrollments in a department or program, including enrollments per teaching FTE, may be considered in such decisions on discontinuance or reduction.
- For reductions in teaching faculty in the Earlham School of Religion (ESR), the CWG and president will follow the provisions of section N of the ESR Faculty Handbook, which specifies:
- That reduction or discontinuance of a program will be based on an overall written plan for the academic program and staffing, built upon long range judgements derived from ESR’s mission and objective of educational service and in consultation with the Faculty Meeting.
- That the faculty is responsible for recommending specific discontinuance or reduction of a program or discipline area.
- That the Dean is responsible for recommending specific personnel decisions.
- That final action will be taken by the President in consultation with the Dean and approved by the Board of Trustees.
- That consideration of discontinuation or reduction of a program may include the pattern of enrollments in the program’s combined course offerings and enrollments per teaching full time equivalent.
- For reductions in administrative faculty and staff, the CWG will work with Vice Presidents of the relevant sectors in the College, or the Dean of ESR, to recommend personnel reductions.
Earlham aims to achieve a balanced cash flow operating budget by 2030, as mandated by its Board of Trustees, as well as develop a forward-looking strategic plan that will secure Earlham’s future as a strong national liberal arts college for future generations of students.
President Paul Sniegowski plans to continue sending biweekly updates regarding the CWG’s work to employees and students. Members of the Earlham community also will have the opportunity to engage in the CWG’s consultative process through all-campus meetings this fall, forums, and other events. Members of the Earlham community are invited to share ideas with the CWG through this Qualtrics form.
II: Enrollment and the future of Earlham
Enrollment for the fall 2025 entering class totaled 671 students, including 169 new first-year students and 14 new transfer students. These numbers are consistent with overall enrollment for the past five years and represent a decline in our historical enrollment of around 1,200 students. Earlham’s enrollment challenges mirror those facing many small colleges, with fewer high school graduates choosing college and changing attitudes about the value of a college education. International recruitment has also become harder due to travel restrictions, visa delays, and rising costs that make it more difficult for students to arrive on time or at all.
In the past several years, Earlham focused on recruitment and outreach to students from Indiana and surrounding states. We are proud to educate students from our region. We also have recognized that such a recruitment strategy has limited our reach and placed us in greater competition with large regional state universities instead of with national liberal arts colleges whom we consider our true peers. Moving forward, under the leadership of new Vice President for Enrollment Management, Marketing, and Communications Jeff Perkins ’94, we plan to rebuild our national and international profile while also strengthening our local and regional presence.
There is no plan or intention to close Earlham College. The steps being considered to balance Earlham’s cash flow operating budget are intended to prevent that outcome and to secure a smaller but stronger institution for the years ahead.
III: Financial overview
Earlham has been running a structural cash flow deficit in its operating budget of around $15 million annually over the last decade and relying on draws from its endowment to cover operating costs all while trying to increase enrollment. Earlham’s Board of Trustees has mandated that Earlham have a balanced cash flow operating budget by the year 2030. To achieve this, Earlham will eliminate $18 million from its structural cash flow operating budget deficit in stages: $6 million during the 2025-26 fiscal year, $6 million in 2026-27, $4 million in 2027-28, and $2 million in 2028-29. This represents a reduction of about 32% relative to Earlham’s 2024-25 budget.
At more than $400 million, Earlham is fortunate to have an endowment that is larger than donated assets at many small colleges. However, most of our funds are restricted, meaning they can only be used for the purpose specified by the donor. While these contribute significantly to the operation of Earlham, they cannot be used to cover cash flow operating budget deficits.
In recent years, Earlham has relied too heavily on extraordinary draws from the endowment’s unrestricted funds to remain operational. The depleted state of Earlham’s unrestricted endowment has reached a point where, under Indiana law, we are no longer permitted to make additional extraordinary withdrawals.
To continue supporting operations while we work to correct the structural cash flow operating budget deficit and achieve a balanced cash flow operating budget within the next four years, Earlham has filed a legal petition with the Wayne County Court seeking an exception to that law. This petition requests permission to spend $40 million of the inflation adjusted historical gift value from Earlham’s unrestricted endowment. If the court does not grant the petition, Earlham has the right to appeal the decision, up to the Indiana Supreme Court if necessary.
IV: Impact on programs and people
Offers for voluntary resignations and early retirement incentives, which are currently being considered by eligible employees, may further reduce the number of layoffs needed. Ultimately, we need to eliminate 35-45% of administrative and teaching faculty personnel expenses and 10% of staff personnel expenses, or about 100 roles in total, which will be achieved through the combination of positions eliminated through the hiring freeze, voluntary resignations and retirements, and layoffs. These changes will better align our workforce expenses with the size of our student body, as our workforce has remained steady in size even as our enrollment has drastically decreased.
Teaching faculty who accept a voluntary separation package or early retirement will depart the College by June 30, 2026. Administrative faculty and hourly staff who accept voluntary separation packages will depart the College by December 31, 2025.
Notices to individual faculty and staff whose positions are eliminated will be sent in December 2025. Non-tenured faculty, administrative faculty, and hourly staff whose positions are terminated will receive at least 6 months’ notice. Tenured faculty will receive at least 15 months’ notice in advance of their effective date of termination, all of which was factored into the balanced budget mandate approved by the Board last spring.
We recognize students will be affected by decisions to eliminate some administrative faculty, teaching faculty, and staff positions. These decisions may affect programs in which students are enrolled. Earlham is working to support every enrolled student on their pathway to degree completion in their chosen field. We anticipate being able to offer more information regarding specific impacts to academic programs in December.
To achieve financial sustainability, we must eliminate positions held by colleagues, professors, mentors, friends, and neighbors who have helped weave the fabric of our community. These reductions speak to the importance of the moment we are in and of the magnitude of the changes that are needed to secure our future for decades to come.
The Curricular Policy Committee and Faculty Affairs Committee are determining specific changes that are needed for academic programs. It is possible that some academic programs, particularly those that are underenrolled, may need to change, merge, or close. Earlham will work to support every enrolled student on their pathway to degree completion in their chosen field, consistent with how it has historically addressed changes to academic programs.
What will not change at Earlham is our commitment to our Quaker values that are guiding us through this challenging time, as well as our dedication to the success of our students as they pursue their degrees and meaningful work in the world. This includes our commitment to making Earlham affordable for its students.
Our programs evolve, as they always have, to meet the needs of our students. Earlham is proud of its tradition as a liberal arts institution that offers an education rooted in Quaker values. We believe the best way to prepare students for success in a complex, ever-changing world is through an education that gives students a broad foundation for innovation and adaptation and flexibility to embrace their curiosity. We do not intend to stray from that mission.
No. Revitalize Richmond is a five-year project funded by restricted grant dollars from Lilly Endowment Inc. ($25 million). Those funds can only be used for that initiative, which remains on track and is in its second year of implementation. An additional $83 million in cost-share funding comes from partnering organizations in Richmond and Wayne County.
Earlham’s strength has always come from its people — alumni, families, friends, and community partners who believe in the power of an Earlham education. There are several meaningful ways to help Earlham during this pivotal time: