To: All Faculty and Staff
March 20, 2025
Dear Colleagues,
Yesterday during the UC Board of Regents meeting, President Drake announced several planned efforts to support the University of California and ensure its solid financial footing in the long term. That announcement can be found here.
This along with potential changes resulting from ongoing federal directives and the anticipated budget reduction are contributing to heightened levels of uncertainty. To help keep you informed, periodic updates will be provided in this format when significant new information becomes available or to offer helpful context, in addition to the scheduled Monday Memo updates.
Following is an overview of current federal actions, impacts, as well as UC Merced’s immediate response and next steps. Maintaining transparency and ensuring faculty, and staff, and broader UC Merced community are well-informed of how these federal actions may affect the campus is a priority. It is important to note that while the impact to the campus could be considerable, UC Merced may be slightly more insulated from many of these actions than other universities recently in the news and some of our sister UC campuses due to its size and funding sources.
Current Areas of Concern
Primary concerns include federal funding support of research facilities and personnel.
- NIH Grant Indirect Costs: While NIH grants are a valuable source of funding, UC Merced’s level of reliance on them is lower compared to other UC campuses. A potential change in the funding applicable to indirect costs could impact the campus by approximately $2 million. This represents about 20% of total indirect cost (IDC) recovery, currently ranging between $11–13 million. For context, total federal research expenditures at UC Merced are approximately $40 million.
- Federal Grant Awards: To date, UC Merced has received eight notifications related to federal awards. Agencies involved include NIH, NSF, Dept. of Education, Dept. of Defense, USDA NIFA, Social Security Administration and Bureau of Land Management. The interpretation and impact of these notifications have been complicated by the fact that these awards all involve other entities (academic institutions or national labs), some of which have a different interpretation, legal position or risk tolerance than UC Merced.
- Federal funding grants with DEI components: The current monthly spend on federal awards with DEI goals is split nearly evenly between personnel and non-personnel. Loss of the personnel portion of funding may put employees supported by these grants at risk.
Actions Taken
UC Merced has taken several steps to address these concerns:
- The Office of Research and Economic Development affirmed processes for moving personnel affected by stop work orders to other fund sources where possible.
- Implications of potential layoffs on personnel who hold visas are being examined.
Chancellor Juan Sánchez Muñoz has been actively communicating with government at all levels, including:
- Visiting Washington D.C. to meet with key members of the Valley congressional delegation, including Representatives Adam Gray, Jim Costa, Vince Fong, Josh Harder, David Valadao, and both U.S. Senators Alex Padilla and Adam Schiff to share UC’s concerns.
- Speaking with several state legislators to secure their signature on a letter to the entire California congressional delegation in support of UC’s academic and research mission and encouraging their advocacy with the federal administration on UC’s behalf.
- Helped develop partnerships that were key for a group of Valley state legislators to jointly sign onto a letter led by California State Assembly Higher Education Committee Chair Mike Fong to Assembly and Senate Budget Committee chairs, vice chairs, and legislative leaders urging the elimination of the proposed state budget reduction to the UC in light of ongoing federal directives and uncertainty.
Next Steps
To mitigate impact, UC Merced plans to:
- Continue working across academic and administrative units to manage personnel affected by funding cuts.
- Enhance engagement with congressional representatives and other potential advocates and influencers.
- Monitor and adapt to changes in federal funding policies and their impacts on research.
- Explore alternative funding sources and strategies to support ongoing research and educational activities.
- Consider additional efficiencies that protect core functions.
These steps aim to minimize the negative impacts of federal funding cuts and ensure the continued support of students, faculty, staff, and research programs. It is important to remember that injunctions have been issued in response to many of the proposed actions and will be subject to lengthy court disputes. While awaiting those final decisions, we must not become discouraged.
You can continue to stay informed on federal updates by visiting UCOP’s webpage and UC Merced’s webpage. You can also learn more about opportunities to engage with your legislators through the UC Advocacy Network.
Be assured that UCOP, Chancellor Muñoz, and campus leadership are doing everything permitted within legal scope to advocate for the university and communicate the critical importance of maintaining access, opportunity, research, and uninterrupted federal support.
