In recent months, concern about the financial stability of the University of Chicago and the Laboratory Schools has grown amid budget cuts, staff reductions and shifting university priorities. Earlier this year, university administrators acknowledged a need to cut millions of dollars from the budget to address rising operational costs and declining revenue growth, prompting cost-saving measures across divisions — including Lab.
The announcement followed years of financial strain tied to the university’s expansion projects and high levels of institutional borrowing, which some observers argue have left the university vulnerable to broader economic pressures. Critics have attributed the current shortfall not only to inflation and post-pandemic financial challenges but also to long-standing structural issues. In a widely circulated essay in Compact Magazine, a University of Chicago faculty member argues that the university’s financial model — characterized by aggressive real estate investments, debt-financed growth and a shift toward commercialization — has diverted resources from teaching and research. Administrators, meanwhile, maintain that the university remains financially strong and that budget reductions are part of a responsible, long-term effort to sustain core programs and maintain stability.
At Lab, the effects of these broader financial concerns have raised fears about the future of the lower, middle and high school as well as the higher educational programs (undergraduate, professional and doctoral) The U-High Midway interviewed Brian Lipinski, the director of finance, and Susan Groesbeck, the interim director of schools, who both emphasized that Lab is not in crisis.
MYTH: Lab is in danger because of the university’s finances.
FACT: “[The university is] going to look at their undergraduate programs and the numbers for undergraduates,” Dr. Groesbeck said, “And we, as the Lab Schools, are a fundamental part of the university. It’s not threatening to the Lab Schools. We are important to them, and they’re important to us. We have a symbiotic relationship.”
MYTH: The University is in an unprecedented financial crisis.
FACT: Like many higher education institutions, UChicago faces financial pressures, but Dr. Groesbeck said the administration is responding cautiously, not desperately.
“All universities are in the red,” said Dr. Groesbeck. “It’s a funny thing. Tuition never covers expenses… However, it doesn’t mean they’re in dire straits.”
Mr. Lipinski highlighted the importance of noting the university’s investments within the greater image of its finances.
“Although UChicago has run annual budget deficits for several consecutive years, this is part of a larger strategy to make targeted investments in specific areas of the institution, such as facility construction, financial aid, and academics at all levels,” Mr. Lipinski said.
MYTH: Tuition alone should be enough to cover Lab’s expenses and programs.
FACT: Tuition covers about 90% of Lab’s annual expenses, according to Mr. Lipinski. The remaining gap must be filled by donations, which is also true on the university level.
Dr. Groesbeck pointed to several ways that Lab raises additional money, including the spring fundraiser “Connections,” the Annual Fund, and long-term giving programs like charitable remainder trusts.
MYTH: Lab’s budget cuts mean the University of Chicago is pulling away from its schools.
FACT: Lab is one of 46 integrated units under the University of Chicago. Each unit, including the undergraduate college, professional schools and administrative divisions, receives budget guidance from the University’s Budget Office, and Lab’s 2024 cuts — including squash, sailing and several staff positions — were part of a university-wide cost-reduction plan.
“The reductions announced in the spring of 2024 were Lab’s response to the provost’s request for all university units to contribute additional budget reductions to reach revised targets for the 2024-25 fiscal year, which ran from July 1, 2024, to June 30, 2025,” Mr. Lipinski said.
MYTH: The university keeps all financial and budgetary information secret from the community.
FACT: Information about finances at the university is available to anyone interested or concerned, and there are many reputable articles and essays written about the subject available online.
