On May 1, 2025, the New Jersey Senate Budget and Appropriations Committee convened to hear testimony regarding Governor Phil Murphy’s proposed higher education budget for FY 2026, which reduces state funding for higher education by more than $400 million, a 16.1% decrease from the previous fiscal year. The cuts affect a wide range of areas and have sparked concerns over the long-term sustainability of the state’s public universities, community colleges, and financial aid programs.
The FY 2026 budget proposal includes:
- A $126 million reduction in operating aid for public four-year universities
- A $20 million rollback in operating aid approved in FY 2025 for community colleges
- A $50.4 million reduction in student financial aid programs, including the elimination of Summer Tuition Aid Grants, which served 13,000 students in FY 2025.
In addition, proposed changes to eligibility criteria for key aid programs, such as the Community College Opportunity Grant and Garden State Guarantee, could exclude students from families with incomes between $65,000 and $100,000, limiting access to critical financial support.
One of the programs eliminated in the proposed FY 2026 budget is Some College, No Degree, which was established in FY 2023 to support adult learners who had completed some college credits but had not earned a degree. Over the past three years, the state invested $17.4 million in the initiative. According to state-reported outcomes, the program re-engaged over 11,200 adult learners, with approximately 840 of those individuals earning a degree or credential. The program also included outreach efforts and collaboration with higher education institutions to support re-enrollment and degree completion.
Private, nonprofit universities in New Jersey would also face significant financial challenges under the proposed budget. The Governor’s plan calls for a 67% reduction in operating aid for these institutions, dropping it from $14.2 million to $4.6 million. This reduction could strain the resources of private institutions, potentially leading to increased tuition or program cuts.
Lawmakers from both parties expressed concern that the state’s higher education system is bearing an outsized share of the financial burden, particularly as other areas of the budget remain relatively protected. The proposed cuts come at a time when New Jersey’s universities and community colleges are already grappling with rising inflation, increased operating costs, and uncertainty surrounding federal funding policies.
The New Jersey President’s Council also voiced its concerns, with Chair Dr. Michael Avaltroni calling for a restoration of funding for public universities and independent institutions. Noting the value of higher education to the state’s economy and workforce, Dr. Avaltroni stressed that these reductions could harm New Jersey’s competitiveness and future growth.
As part of the discussion, legislators raised questions about the $350 million sitting in the Higher Education Facilities Trust Fund, which remains unspent despite mounting infrastructure needs across institutions. The lack of capital outlay funding in New Jersey, which is one of just six states without an annual capital outlay for higher education, has created significant pressure on institutions to manage aging facilities.
Institutions urged the Legislature to prioritize funding for both operational needs and financial aid to ensure continued access to higher education for students across the state. As the budget process moves forward, further developments are expected. Lawmakers and higher education officials will continue to work toward finding solutions that balance fiscal responsibility with the long-term needs of New Jersey’s higher education system.
Please contact a member of the McCarter & English Government Affairs team with any questions or for further updates on New Jersey’s higher education budget discussions.