Financial Crisis FAQs

Some colleges and universities are facing challenging financial situations as a result of the COVID-19 pandemic or other issues. In some cases, particularly those in which ongoing financial problems have threatened institutions’ survival, the challenges are extraordinary. But too often administrations invoke broader fiscal collapse as a justification for implementing, without meaningful faculty participation in the decision-making process, a variety of measures that undermine the mission of the institution and threaten the working conditions of faculty, academic professionals, graduate employees, and other campus staff. Such measures may include hiring and salary freezes, furloughs, salary cuts, layoffs, nonrenewals, reduction and elimination of academic programs and colleges, revision of curricula, changes in academic policy, elimination of tenure, substantial changes in workload, and more.

To assist members of the academy in addressing the challenges faced in times of financial stress, we offer the following often-asked questions with accompanying answers. In order to help our chapters, our members, and the profession as a whole to navigate this crisis, we will continue to update the information on this page. Have a question that's not answered here? Let us know what it is.

AAUP Policies and Best Practices

1. According to AAUP-recommended standards, when can an administration terminate faculty appointments for financial reasons? 
2. Where can I find the AAUP’s recommended policies and procedures on financial exigency? 
3. What is the AAUP’s definition of financial exigency? 
4. What should be the faculty’s role in determining whether a condition of financial exigency exists?
5. What further role should the faculty play before any proposals are made for discontinuing programs?
6. How does the AAUP define "academic program"?
7. To what extent will affected faculty members be informed of the proposed discontinuance of their programs?
8. What due process protections does the AAUP recommend affording a faculty member whose position is being terminated because of financial exigency? 
9. Is there an order in which appointments should be terminated after financial exigency has been declared? 
10. How much notice should an administration provide a faculty member whose appointment is being terminated for financial exigency?
11. Does an administration have any other obligations toward a faculty member whose position is terminated because of financial exigency? 
12. Can institutions terminate faculty appointments by eliminating programs and departments for reasons other than financial exigency? 
13. Where can I find sample faculty handbook policies on financial exigency that comport with AAUP recommended standards?

Legal Considerations

1. Can my school legally furlough me or lay me off during these financially hard times? 
2. What is the difference between a furlough and a layoff? 
3. If it is legal to furlough me, can my university furlough me just for a day? For half a day? For an entire semester? 
4. I teach at a unionized public university and we have a collective bargaining agreement. Can the state pass a law that furloughs employees or cuts our pay in violation of the agreement?
5. What type of notice and hearing is required before I am furloughed? 
6. What factors may be used in determining financial exigency?
7. Have courts recognized the connection between protecting tenure and limiting declarations of financial exigency? 
8. My school’s bylaws and faculty handbook do not mention financial exigency as a possible grounds for termination, but the school has invoked it anyway. Is that legal? 
9. How much notice should an administration provide a faculty member whose position will be terminated for financial exigency?
10. My position was terminated as a result of a program elimination, and I protested. The university officials who made the program-elimination decisions were same the ones who judged my hearing. Is that legal?
11. I was told that at my termination hearing, I didn’t have “legal” rights like the right to an attorney, the right to cross-examine witnesses, the right to present evidence, or the right to a written record of the hearing. Is that accurate?
12. I am a tenured faculty member at a public institution. What are my constitutional rights with respect to continued employment? 
13. I think that my institution might be using financial exigency as a cover for getting rid of a number of older faculty members. Could we have a claim under the Age Discrimination in Employment Act (ADEA)? 
14. If I am laid off or furloughed will I receive unemployment insurance and CARES Act enhanced benefits?
15. My institution has offered early retirement or tenure buyouts; if I accept, will I be taxed on the buyout amount?
16. Does the AAUP provide to individual faculty members legal assistance or a list of recommended lawyers?
17. I am a contingent faculty member, and because of the economy, I have not been offered any courses this term. Am I entitled to unemployment benefits?

Understanding Institutional Finances

1. What role can faculty play in institutional financial decisions?
2. How can I get data on institutional finances?
3. What should I know about getting data on public colleges and universities?
4. What should I know about getting data on private nonprofit colleges and universities?
5. What should I know about getting data on private for-profit colleges and universities?
6. What should I be looking for in reviewing institutional financial information?
7. How can I get information on the number of administrators and their salaries?
8. How can I get data on peer institutions?

Organizing the Faculty Response (questions broken down into subsections below)

The Role of the AAUP Chapter

1. What can the faculty do to support proposals that have less severe consequences for our faculty, students, and academic programs than those being aired by the administration? Since we already have a faculty senate, what is the benefit of also having an AAUP chapter?
2. The information and advice provided on the AAUP website are extensive and, in part, technically complex. How best can I make use of this information?
3. What is the process for establishing an AAUP chapter?
4. How can a new or existing chapter become an effective advocate for the faculty and for the academic health of the institution? Can the national AAUP help?
5. What can a chapter do to engage with other campus constituencies on issues relating to cutbacks and financial problems?

Engaging the Faculty

1. Our faculty are pretty apathetic, although they are concerned about the financial problems. How can we get them more engaged?
2. Most of our faculty members believe the administration’s unsupported claims that the general economic crisis has created a crisis at our institution. How can we better educate our colleagues on this issue?

Government Relations and Lobbying

1. What should I say to legislators about the financial crisis? 
2. How do I find out which legislators are most relevant for this issue? 
3. What tips does the AAUP have for writing letters to elected officials? 
4. I am at a private university. Would it be useful for me to inform elected officials about the financial crisis on my campus? 
5. When I do lobby visits, should I bring students? And what should they say to legislators?
6. Are there restrictions on public employees lobbying the government on budget issues?

Communicating Through your Chapter and with the Media

1. How can I let people know what is happening on my campus and communicate the faculty’s or my AAUP chapter’s views?

Using Collective Bargaining

1. We have been convinced the budget deficit does require cuts somewhere, but what are some alternatives to eliminating faculty lines?
2. What steps should a collective bargaining chapter take to prepare for anticipated or proposed reductions of faculty and other academic professionals in the bargaining unit?
3. Where can I find examples of contract language that address financial crises and financial exigency?


The information on this website is intended as general guidance on matters of interest and does not constitute legal advice. While every attempt has been made to ensure the accuracy of the information provided, laws and factual circumstances may differ significantly depending on locality and other factors. If you have legal questions you should consult with an attorney in your area knowledgeable about these issues. Additionally, to ensure compliance with Treasury Department regulations, we advise you that, unless otherwise expressly indicated, any federal tax advice contained in these materials was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein.