Southern Oregon University risks closure without deep cuts, consultants say

“Dive Brief: Financial consultants for the beleaguered Southern Oregon University released a dramatic plan to revamp the public institution’s operations and save up to $20 million in the near term while keeping it viable in the years to come. A Deloitte presentation to the university’s governing Tuesda y recommended that SOU cut money-losing programs, turn to shared services for back-end administrative operations, and freeze salaries in the short term, among numerous other measures. The presentation put the stakes in stark terms, contending SOU doesn’t have margin for error in executing on a financial plan. It recommended developing an alternative plan — including for a “controlled winddown” — if SOU can’t hit certain financial milestones. Dive Insight: SOU’s financial woes hit crisis levels this year. Earlier this month, Oregon Gov. Tina Kotek signed into law a measure giving the university $15 million in emergency funding as the institution stared down the possibility of running out of cash next year. The measure, however, came with some strings attached. Perhaps chief among them: SOU must balance its budget by the 2027-2029 fiscal biennium a nd also create a longer-term plan to deliver higher education in its region “without reliance on ongoing increases in state support.” The Deloitte presentation pointed out that even with the financial lifeline from the state, the university won’t have enough cash to cover all its obligations by fall 2027. Given that time pressure, as well as the state mandate for a fiscal plan, Deloitte recommended firming up strategic priorities in the coming days and submitting a final plan to the state’s Legislative Fiscal Office by May 11. Deloitte consultants targeted savings and revenue increases throughout SOU’s operations, in everything from raising prices for student dining to cutting assistant coaches in athletics programs to spinning off the Jefferson Public Radio station. The Deloitte plan would entail reducing back-office staff. The consultants saw a potential $6.9 million in savings by seeking partners to share services for many university functions such as IT, human resources, finance, public safety, enrollment management and more. But the largest area of savings Deloitte eyed was in academics. The consultants’ analysis found that only 10 of SOU’s 23 academic units operated with positive gross income per student credit hour in the 2024-25 academic year. The other 13 racked up losses. Music, outdoor adventure leadership, creative writing, and sociology and anthropology all showed losses of $99 or more per student credit hour. At $199, the music department lost the most by far. The presentation called for a broad academic transformation that would align academic program costs with tuition revenue in the short term while ultimately reshaping course offerings to meet student demand and workforce need — “reflecting a constant 2-way dialogue with students and employers to shape curricula.” Additionally, the presentation focused on attracting adult learners to SOU, including by giving credit for past learning, shortening degree times and quickly launching microcredential programs to meet workforce needs. Ultimately, Deloitte consultants saw potentially $7 million to $8 million in academic cost savings from staff and faculty salaries while using a holistic analysis to determine “where to implement operational efficiencies, and where academic units need to be closed.” SOU’s financial hole is expected to keep growing.The university operates at a $12.5 million deficit that is projected to rise to $16.9 million by fiscal 2030. The alternative to deep cuts and transformation would likely be shutting down the institution, Megan Cluver, a Deloitte Consulting principal, told trustees Tuesday. Cluver argued that a merger would be an unlikely option for the university. “We need to be realistic about the fact that the university is not a particularly attractive acquisition target for a larger university,” she said. Last year, SOU adopted a plan to shed 23 programs and lay off 18 employees following years of what the institution described as “ unprecedented fiscal crises .” Leaders said at the time that SOU could no longer function as “a comprehensive university.” Much of the fiscal pain has followed enrollment declines. Between 2015 and 2025, fall headcount shrank about 16% to 5,206 students, according to data from the state higher ed commission.

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