Research universities preparing for significant budget cuts could be squeezed even further by the increasing costs of supplies due to President Donald Trump’s tariffs.
That’s according to Jennifer Glassman, an independent consultant and former director of procurement at the University of Virginia, in her recent Q&A with University Business.
The Trump administration has proposed a 15% indirect cost rate to reimburse institutions for overhead expenses supporting research across the National Institutes of Health, National Science Foundation and other federal agencies.
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Universities, such as Columbia, Johns Hopkins, and Duke, have implemented hiring freezes or layoffs to prepare for budget cuts despite many of the Trump administration’s directives being fought in court.
Note: This conversation has been edited for brevity and clarity.
Alcino Donadel: I’ve heard that tariffs aren’t impacting higher education as much as other business sectors but I was curious what kind of insight you had on the procurement side, particularly on students.
Jennifer Glassman: Universities work really hard to keep costs down for students and they generally try to be student-centric. However, they sometimes have to do strange things to cover their bases, like raise the cost of the meal plans, housing and potentially even tuition.
Universities have to maintain these large buildings and all the furniture inside. A dorm comes with basic furniture and lighting, which requires supplies to maintain. And then there’s dining, which requires a whole supply chain. This could trickle down to students.
Donadel: Are there any other facets of higher education that tariffs are affecting?
Glassman: Most of the stress right now on universities is not exactly about tariffs. It’s about the budget that’s coming from the federal government.
The current administration wants to cut the indirect rate they award institutions for federal grants their researchers earn, which helps support their work. Some research institutions’ budgets are 70% funded by the federal government
There’s uncertainty over what the final number will be but a lot of jobs across the country will be affected. University leadership has proposed budget cuts immediately because they’re bracing for a large dip in federal funding.
All the institutions that I’ve worked with implemented hiring freezes. Some have laid people off.
Donadel: I bet new budgets will seem even smaller if tariffs are driving prices up, too.
Glassman: This kind of goes hand in hand with tariffs. If supply costs are going through the roof on a budget that the university has already approved, it could affect whether they have to let people go to buy the goods they need to conduct the research. Student researchers whose labs are affected by supply cost increases are most likely the first to get cut.
But the most stressful situation that universities are facing right now is whether they’re going to see a reduction of 20-plus percent of their budget.
Universities don’t want to add costs or take on new projects. They’re trying to figure out how to brace for changes if they suddenly have to operate with one-third of what they have.
What if they suddenly have an administrative support group that just drops out of their organization? How do you get people to know how to do basic things in technology that they’ve never had to do, like submit an order or get a new supplier added to the system?
We take these things for granted because there’s a layer of people who guide us through this so that our researchers can focus on the research mission. If we were to lose a lot of resources, that’s one of the areas that’s most at risk.
Donadel: At the very least, what can colleges and universities do to ease the effects of tariffs?
Glassman: Whenever there are budget issues, the best thing to do is to go back to procurement and use strategic sourcing. It’s incredibly good at getting the absolute best price based on what the requirements are. Studies and metrics show that if you go through the strategic sourcing process, you will save money.
So it’s really about getting labs, researchers and departments to sit through that process and not try to shortchange it because it will save money and, in turn, save jobs.
Suppliers, who might also be directly affected by tariffs, will be hungry for business and strategic sourcing will create a competitive environment where the university is securing goods at the best possible price.
Strategic sourcing is known to take time because you have to sit down and think about your formal requirements but significant advancements in technology have transformed the process. It’s no longer what it was 10 years ago.
I’ve seen institutions do a great job of cutting that life cycle down. They’ve used it, in part, based on technology and, in part, on having point people in the organization.
Donadel: From some of the higher ed clients you work with, do they have any thoughts or perspectives they’ve shared about tariffs regarding their institution?
Glassman: At the leadership level, there’s a recognition that there needs to be more centralization and usage of single contracts as opposed to varying contracts with varying terms with the same provider.
That is often supported by optimizing technology that may already exist within the institution but they haven’t fully leveraged it.
