🎓 Beneath the Surface
Endowment Taxes, Grant Cuts, and the Quiet Erosion of Academic Security
🎓 Beneath the Surface
Endowment Taxes, Grant Cuts, and the Quiet Erosion of Academic Security
By Daniel Fagan, MSPFP, MPAS™, AIF®
Senior Wealth Management Advisor | Radiant Wealth Management
What’s Really at Stake in Higher Ed Right Now
Last month, a tenured professor at a prestigious New England university sat across from me and quietly asked:
"What happens if my department disappears?"
Not if it shrinks. Not if it’s merged. But if it quietly vanishes.
That question captures something I’ve been hearing more often—not just at Yale, UConn, or Wesleyan, but across SUNY, Rutgers, and the UC system:
A slow shift from academic stability to professional fragility.
The Ground Beneath Faculty Is Shifting
Here’s what’s fueling the quiet anxiety:
Proposed or increasing taxes on university endowments
Renewed threats to NIH, NSF, and humanities grant funding
Rising scrutiny from boards and donors around “productivity”
A decades-long trend toward contingent and adjunct labor
According to the American Association of University Professors, more than 70% of all U.S. faculty appointments are now non-tenure-track—a dramatic shift from 1975, when tenured and tenure-track faculty made up 45% of the instructional workforce.
And tenure itself? It’s no longer the unshakable anchor it once was.
Is Tenure Still Tenure?
More faculty—especially mid-career and late-career—are asking:
Could I still be let go?
Could my program be phased out?
What happens if I'm labeled too expensive, too outspoken, or simply outdated?
Meanwhile, younger faculty and academic staff often have:
No pension
Limited job security
401(k)-style plans they don’t know how to manage
An unspoken sense that their future is their problem
This isn’t fear-mongering. It’s realism, and it’s growing.
The New Academic Reality
Most institutions won’t say this out loud. But behind closed doors, many are asking:
Can we maintain our full-time faculty footprint if enrollment declines?
Will donors reduce gifts if endowment taxes increase?
What happens if our research funding slows to a trickle?
Yet not all is bleak. Some institutions are doubling down on stability:
Investing in faculty housing assistance
Expanding retirement education
Offering voluntary phased retirement programs
The real challenge? It’s inconsistency. Faculty don’t know what to expect anymore—and that uncertainty breeds quiet panic.
What Faculty and Staff Can Do (Now)
Here’s what I’m telling clients who feel that unease but don’t want to operate out of fear:
1. Build Flexibility Into Your Financial Life
Security today doesn’t mean excess.
It means optionality.
Increase your emergency reserve
Diversify income: teaching abroad, consulting, independent work
Make your retirement portfolio more liquid and less institution-dependent
"Security today doesn’t mean excess—it means optionality."
2. Understand Your Institutional Risks
Ask yourself:
How is my salary funded—grants, general fund, endowment draw?
Are my benefits portable?
What’s the financial health of my department or program?
👉 Awareness is your first safeguard.
3. Use Sabbaticals and Leaves as Strategic Windows
Don’t treat sabbaticals as passive time away. Use them to:
Rebalance your investment strategy
Launch independent income channels (writing, speaking, publishing)
Explore affiliations outside your home institution
One client used her sabbatical to consult internationally and used the income to fully fund a solo 401(k)—a move that strengthened her long-term flexibility in ways her university never offered.
4. Revisit Your Exit Strategy Before You Need It
Many tenured faculty don’t model exit paths until it’s too late. Ask:
What would it take to retire 2–5 years earlier if needed?
Can I phase out gradually on my terms?
Do my estate plans reflect today’s federal thresholds and risks?
👉 The 2026 sunset of the $13.61M estate exemption could materially impact families with high-value TIAA/Fidelity plans and real estate.
5. Have the Conversation Others Avoid
For chairs, deans, and HR staff:
Invite third-party advisors to educate—not sell
Normalize quiet check-ins around benefits and transitions
Acknowledge uncertainty with calm, not silence
👉 Avoidance spreads faster than anxiety. But so does clarity.
Final Thought: Don’t Wait for the Memo
If you’re waiting for your institution to reassure you, you may be waiting a while.
But that doesn’t mean you’re powerless.
It means this is the time to lead yourself.
To plan deliberately.
To choose agency over drift.
And it starts with a single, honest conversation.
✅ Schedule a Confidential 30-Minute Financial Strategy Call
During this one-on-one session, I’ll help you identify your top 3 institutional risk factors and outline first steps to address them—privately, without pressure.
📅 Schedule a Call
📧 dan.fagan@radiantwm.com
About Dan
Dan Fagan, MSPFP, MPAS™, AIF®, is a Senior Wealth Management Advisor and Managing Partner at Radiant Wealth Management in Connecticut. With over 25 years of experience—including 17 years at TIAA as a Senior Wealth Management Advisor—Dan specializes in helping academics and physicians retire smarter, plan with clarity, and align their financial lives with what matters most.
Advisory services offered through NewEdge Advisors, LLC, a registered investment adviser. Advisory services are only offered to clients or prospective clients where NewEdge Advisors and its representatives are properly licensed or exempt from licensure.
This material is for informational purposes only and does not constitute investment, tax, or legal advice. Past performance is not indicative of future results. Investing involves risk and possible loss of principal capital. No advice may be rendered by NewEdge Advisors unless a client service agreement is in place.
California Residents: We take protecting your data and privacy very seriously. As of January 1, 2020, the California Consumer Privacy Act (CCPA) provides additional rights to residents of California. You may view our data privacy statement or exercise your rights here: Do not sell my personal information
#HigherEd #TenureTrack #AcademicLife #FinancialPlanning #CareerTransitions #FacultyVoices #EndowmentTax