Princeton University employees will pay significantly more for health care and see reduced retirement contributions starting in 2027, the latest sign that one of the nation’s wealthiest universities is pressing ahead with a multiyear austerity campaign that has already reshaped faculty hiring, staffing levels, and campus operations.
Princeton’s Provost Dr. Jennifer Rexford confirmed the changes in an Aug. 31 email to faculty and staff. It was the first formal communication to faculty on the benefit cuts since Vice President for Human Resources Romy Riddick outlined the changes to the broader workforce in a June 3 memo. That memo told employees they would face higher medical insurance premiums and service costs, a new $600 annual surcharge for spouses who carry outside coverage but remain on a university health plan, and a cut to retirement contributions from 15 percent to 12 percent—on earnings above the Social Security Wage Base, currently $184,500. The University is also switching pharmacy benefit managers, moving from OptumRx, which it sued in June over allegations of artificially inflating insulin prices for employees, to Judi Rx.
In her message to faculty, Rexford noted that continuing full professors have received a cumulative 30.5 percent salary increase since 2020, a figure she said edges out the average at peer institutions Harvard, Yale, Stanford, and MIT. But she also acknowledged the university will “continue to operate in a more financially constrained environment for the next couple of years” as it shifts to a new budget model built around lower expected long-term investment returns.
Faculty hiring will continue at a slower pace, with the University aiming to hold faculty size steady rather than grow it, Rexford wrote. Administrative units, meanwhile, face further reductions after already shrinking. University staff headcount has fallen more than 3 percent over the past year through layoffs and unfilled positions, with additional cuts expected.
The moves follow an announcement earlier this year, in which Princeton first signaled it would scale back employee benefits and sharply limit raises for the current fiscal year, citing lower projected endowment returns and uncertainty over federal research funding.
According to the memo, employees will retain access to the same range of insurers, health plans, and provider networks, and the university will continue contributing 9.3 percent of salaries toward retirement for employees earning below the Social Security Wage Base. Dental, vision, gender-related health care, fertility care, GLP-1 coverage, and life insurance will remain in place, though that basic life insurance is now capped at $100,000—down from supplemental coverage of up to three times base salary or $500,000, whichever was lower, in 2025.
The cuts have unsettled parts of the faculty. Economics and public affairs professor Dr. Owen Zidar told The Daily Princetonian that he and colleagues learned of coverage changes not through formal notice but through cancellation letters from their insurer, calling it “shocking how little input and power faculty have” in university governance.
Other faculty members described a mix of frustration and resignation. History and Hellenic studies professor Dr. Molly Greene questioned why the university is cutting benefits rather than drawing further on its endowment, and said decisions continue to be “handed down from on high” despite administrative claims of listening to faculty input.
A Sept. 2 email from Assistant Vice President for Human Resources Elaine Britt added that monthly premiums, deductibles, copayments, and out-of-pocket maximums will all rise under the 2027 plan. Employees can review full details ahead of open enrollment, which runs from Oct. 26 to Nov. 13.
The benefit reductions extend a retrenchment that The EDU Ledger has been tracking since the spring, when Princeton laid off the entire nine-person staff of the Keller Center for Innovation in Engineering Education, froze salaries for tenured faculty, capped staff raises at a flat 1 percent, and ordered departmental budget cuts of up to 10 percent. At the time, President Christopher Eisgruber attributed the retrenchment to a sharp downward revision in the University’s expected investment returns, from roughly 12 percent annually to about 8 percent—the threshold he said is now needed just to sustain operations, financial aid, and salaries. “That means we're not going to have that kind of margin in the endowment to leverage,” Eisgruber said at the time.
Notably, the benefit and raise reductions confirmed this month apply to Princeton’s non-union workforce. Roughly 500 postdoctoral researchers and associate research scholars represented by Princeton University Postdocs and Scholars-UAW (PUPS-UAW) negotiate their compensation and benefits separately at the bargaining table rather than through university-wide policy memos. That bargaining has stretched on for more than two years and has itself been shaped by the University's fiscal tightening. Postdocs demonstrated outside a March bargaining session to show solidarity with negotiators pressing for wage increases and continued benefits amid the broader austerity climate, and university negotiators have told the union’s bargaining committee that any economic proposals must be weighed against the same budgetary constraints driving cuts elsewhere on campus. Neither PUPS-UAW nor Princeton's AAUP advocacy chapter, which faculty reconstituted last year to respond to threats facing higher education, had issued a public statement specifically addressing the September benefit confirmation as of this writing.
That earlier round of cuts, paired with the benefit reductions confirmed this month, underscores how a university long regarded as financially untouchable is now absorbing the same pressures—declining endowment returns, a heightened federal endowment tax, and threats to research funding—that have forced cost-cutting at public university systems in Maryland, Michigan, and Washington state over the past year. The common thread, higher education finance experts note, is structural: the vast majority of even the largest endowments—Princeton's stood at $35.7 billion at the close of fiscal 2025—is legally restricted by donors to specific purposes and cannot be redirected to cover operating shortfalls, retirement contributions, or salary costs, regardless of how urgent the need.
