News Summary
The University of Kentucky’s Board of Trustees has approved an unprecedented budget of $8.6 billion for the upcoming school year, a $252 million increase from last year. The budget includes a 1.5% salary increase for faculty and staff and a 3% tuition hike for students. Challenges influencing the budget included state laws affecting funding for diversity initiatives and changes to the performance funding model. Despite last year’s significant budget growth, several uncertainties loom ahead, impacting future budget allocation strategies.
Lexington, KY – The University of Kentucky (UK) Board of Trustees has approved a historic budget of $8.6 billion for the upcoming 2025-26 school year, marking an increase of approximately $252 million from the previous year’s budget. This budget represents the largest financial allocation in the university’s history, despite a smaller increase compared to previous years.
Included within the new budget are provisions for a 1.5% salary increase for UK staff and faculty, along with a 3% tuition hike for students. For in-state undergraduate students, tuition and fees will rise to $6,953, while out-of-state students will pay $17,582. Graduate students will also see a tuition increase of 3%, with in-state fees at $7,541 and out-of-state fees at $18,662.
This year’s budget was shaped under a complex landscape of challenges and uncertainties. Significant strains included the impact of a new state law banning spending on diversity, equity, and inclusion, alongside alterations in Kentucky’s performance funding model which redefined how state funds are allocated for education. The budget process was described as arduous, with many unknowns that influenced the final decisions.
This financial plan is especially notable given the substantial budget increase of 23%, or $1.6 billion, from the previous fiscal year that was primarily attributed to the integration of the King’s Daughters and St. Claire Healthcare systems into UK’s budget. This acquisition had a significant positive impact on last year’s funding strategy, but its following impact has led to a more tempered growth this year.
Student trustee Maddie Duff opposed the tuition increase during the board meeting, emphasizing the financial burden it could place on students and their families as they prepare for the new school year. Meanwhile, the university anticipates its largest incoming class ever, projecting 6,850 freshmen and a total enrollment of 36,700.
Another critical aspect of the budget is the $110 million internal loan allocated to the athletics department for campus improvements, specifically for enhancements at Kroger Field. Additionally, a further $31 million will be available to the athletics department to manage an expected deficit linked to revenue-sharing agreements with student-athletes.
Looking ahead, UK expects research spending to rise in the new fiscal year; however, concerns loom for the next year due to proposed federal caps on indirect grant costs, currently under litigation. These potential caps could significantly limit the university’s funding for research initiatives, further complicating budget management for future allocations.
As the university navigates these financial waters, UK President Eli Capilouto has acknowledged the growing uncertainties surrounding funding and the implications for the university’s mission. The approving board managed to balance the immediate needs of students and staff against the backdrop of an evolving educational funding landscape, setting the stage for the university’s fiscal future in a challenging environment.
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Additional Resources
- Fox 56 News: UK Unveils 2025-26 Budget
- Kentucky.com: Historic Budget Approval by UK
- WKU Herald: WKU Overspent Revenues
- Sports Illustrated: Kentucky’s NIL Budget
- WHAS11: USDA Halts 1890 Scholars Program
- Wikipedia: Education in Kentucky
- Google Search: University of Kentucky budget 2025
- Google Scholar: Kentucky education budget
- Encyclopedia Britannica: Kentucky
- Google News: Kentucky education news
