Financial Implications + Planning

Update on university financial situation

February 5, 2021

Dear Johns Hopkins Community,

We write to update you on some positive developments regarding Johns Hopkins’ financial situation and the relaxation of our mitigation efforts, including a plan for restoration of employer retirement contributions for the second half of the current fiscal year.

Thanks to the remarkable resourcefulness and ingenuity of so many, and the good fortune of some one-time occurrences, including tremendous philanthropic support, we are in a much stronger position at midyear than we had expected. More details on the university’s financial performance in the first half of this fiscal year (July through December 2020) are available here, but suffice it to say that we are now able to begin relaxing our austerity measures and to restore six months of our retirement contributions. 

Today, we are taking the following three steps:  

  • Restoration of retirement contributions as of January 1, 2021—Rather than waiting until July 1 (as previously planned), we are moving now to restart employer retirement contributions to Johns Hopkins faculty and staff, effective retroactively to January 1, 2021. You can expect to see these regular employer contributions restart in March, and you will receive more information in February about our plans for restoring benefits retroactive to January 1, 2021.
  • Resumption of hiring starting July 1—Searches can begin now for faculty and staff positions with a start date after the beginning of the next fiscal year (July 1, 2021). As has been the case for the last eight months, we also will continue to support a process for earlier exemptions from the hiring freeze for mission critical or strategically important hiring that is required before the end of the current fiscal year. 
  • Resumption of merit pay increases on July 1—We plan to continue our freeze on employee salaries through the end of the fiscal year, but we will resume merit pay increases on July 1, 2021.  

We are, of course, far from back to normal. Although we do not yet have updated projections for the full fiscal year (through June 30), we know that overall revenues have been negatively affected by COVID-19 and are lower than they were at this same point last year. But we know, too, that the steps taken across the university to mitigate this financial downside have been quite successful.

We are also mindful of the continued uncertainty of the pandemic, particularly with respect to the emergence of new variants of the virus. For that reason we are preserving a portion of our current positive balance to be able to weather the months ahead. We are committed to re-assessing as the year progresses, and, as promised last spring when we began this difficult journey together, if we can prudently do more to reverse our austerity measures, we will do so.

Johns Hopkins Health System is taking similar positive steps, focusing first on reinstating merit pay for its employees. The Johns Hopkins School of Medicine faculty and staff are part of the Johns Hopkins University and thus will have their employer retirement contributions reinstated under the university’s plan.

Updated financial FAQ are posted at with more details and information on these plans, along with our past and current COVID financial reporting. The university’s financial team will hold a town hall meeting this spring, once we have in hand updated year-end projections, so that we can review this information with you and answer any questions. 

Let us conclude with an earnest expression of gratitude to all members of our community and, in particular, our deans, departmental chairs and directors, and financial team, for your herculean efforts through a very challenging time as we have maintained our research, educational, and clinical missions.


Ronald J. Daniels

Mary Miller
Interim Senior Vice President for Finance and Administration

Frequently Asked Questions

What has changed since February to enable the university to reinstate retirement contributions for the full fiscal 2021 (July 2020 through June 2021) at this point?

In February 2021, as a result of significantly more favorable financial results than budgeted through December 2020, university leadership and the Board of Trustees approved the reinstatement of the university contributions to employee retirement plans six months earlier than originally planned, effective January 1, 2021.

Now, as of the end of March, we are pleased to report further improvement in the financial results through March and greater confidence in the outlook through June 2021.  In particular, in March the University received an additional $29 million in federal Provider Relief Funds to the School of Medicine, and Congress approved and the President signed the American Rescue Plan (ARP), through which JHU stands to receive additional support from a third tranche of Higher Education Emergency Relief Funds. We are waiting final word on the allocation to JHU from the ARP but anticipate that some of these funds will offset some of the costs the University has incurred this year related to the safe resumption of activity on campus.  Furthermore, clinical revenue generated by the School of Medicine has continued to exceed fiscal year 2021 budget targets through March despite the surge in COVID-19 cases over the winter months.   These recent developments make us confident that the university can feasibly reinstate fully the retirement contributions that were temporarily suspended for fiscal year 2021.

Last updated: April 2, 2021 9:14am

What has changed with regard to the university’s finances that is allowing it to restore employer retirement contributions earlier than anticipated?

At the beginning of the COVID pandemic, Johns Hopkins University’s projections of the pandemic’s fiscal impact suggested that without mitigation actions, we could experience a deficit of as much as $100 million in fiscal 2020 and of as much as $375 million in fiscal 2021. In response, the university implemented several actions to reduce spending, including a freeze on hiring and on salaries and the one-year suspension of employer contributions to faculty and staff retirement accounts, beginning last July 1. University leadership, including the president, provost, deans and others, also took voluntary pay cuts. The divisions and University Administration followed with targeted measures to further reduce expenses and, where possible, increase revenues.

Thanks to those efforts, we were able to report new projections in October that reduced our budgeted deficit for FY21 to a $73 million loss.

Overall university revenues through the first half of the fiscal year (July–December 2020) are $62 million lower than they were at the same point last fiscal year, but we had planned for far worse, and this represents a significant improvement compared to our budget. We are now seeing a substantial positive margin of $151 million, of which approximately $80 million can now be expended to restore six months of our employer retirement contributions.

Several factors have contributed to that result, including:

  • Better than expected clinical revenue at the School of Medicine. After rapid declines in clinical revenue in the spring due to COVID-19, we initially projected $336 million in revenue for the first half of the year (a 14% decline from the same period in the prior year), but the school has generated $383 million year to date ($47 million more than budgeted). This outcome reflects the hard work of our colleagues in Johns Hopkins Medicine to maintain our non-COVID clinical operations even as the pandemic surged during the latter part of the calendar year.
  • Strong philanthropic support. The university received a large, unexpected one-time gift during the first half of the fiscal year, and other fundraising has been sustained at a higher level than projected.
  • Higher levels of student enrollment than projected. We had budgeted for a reduction in net tuition revenue compared to the prior year of $63 million through December (-16%), but thanks to stronger than expected enrollment across our divisions, we experienced an actual decline of $41 million (-11%).
  • Greater cost savings due to the pandemic than expected through December, particularly with regard to travel expense. JHU divisions had budgeted for a nearly 50% decline in non-sponsored travel expense through December, and the actual decline is 95%, saving an additional $10 million.

We are currently calculating new projections for the remainder of the fiscal year based on our results through December, and in doing so we are mindful of the continued unpredictability of the pandemic and the risks posed by new, more contagious variants of the COVID virus. However, the university’s results so far have been strong enough that university leadership and the Board of Trustees believe we can prudently restore employer contributions to faculty and staff retirement accounts for the second half of the fiscal year (January–June 2021).

Last updated: Feb 5, 2021 12:12pm

Why were austerity measures necessary if the university finished FY20 with a surplus and is doing so well in FY21?

The austerity measures enacted in April reflected initial projections of the COVID pandemic’s potential impact on university finances showing a deficit of as much as $100 million in FY20 and as much as $375 million in FY21 if no mitigation actions were taken. The measures taken—a one-year pause on employer contributions to faculty and staff retirement accounts; a freeze on hiring and salaries; and voluntary pay cuts by university leadership—were chosen to help preserve university employment to the greatest extent possible.

Those measures, along with continued careful management by the divisions and other factors, have succeeded in reducing the overall level of university expenditures. In addition, overall university revenues remain below their pre-COVID levels, but they are much improved compared to our budget. Clinical revenue, philanthropy, and tuition have all exceeded our budgeted amounts by a substantial margin, and significant one-time occurrences further improved our outcomes. At the end of December, we saw a positive margin of $151 million, of which $80 million can now be expended to restore six months of our employer retirement contributions, and we are now working with the divisions to calculate new year-end projections.

As President Daniels promised in April, if conditions were more favorable than the university expected, restoring retirement contributions was to be a top priority. Based on the results at the mid-point of the year, the university has announced it will restore employer contributions to faculty and staff retirement accounts as of Jan. 1, and if conditions permit, will take further steps to ease austerity measures earlier than planned.

Last updated: Feb 4, 2021 10:37pm

Under what conditions would the university restore the full fiscal year’s retirement contributions?

The university will continue to monitor its fiscal performance and to determine what is permissible under tax codes, and if we can prudently make additional payments to restore missed contributions from the first half of the current fiscal year (FY21), we will do so.

Last updated: Feb 4, 2021 10:38pm

When will the hiring and salary freezes be relaxed?

We plan to continue our freeze on employee salaries through the end of this fiscal year (June 30, 2021), but we will resume merit pay increases on July 1, 2021. Searches can begin now for faculty and staff positions with a start date after the beginning of the next fiscal year (July 1, 2021). As has been the case for the last 8 months, we will continue to support a process for exemptions for mission critical or strategically important hiring that is required before the end of the current fiscal year.

Last updated: Feb 4, 2021 10:39pm

University divisions have announced furloughs and layoffs over the past few months. Were those necessary?

Our actions in response to the fiscal impact of the COVID pandemic have been designed to preserve university employment to the greatest extent possible, but furloughs and layoffs were regrettably necessary within some units of the university. Those decisions were made at the divisional and departmental level, including within University Administration. However, because of the across-the-board mitigation measures the university undertook, as well as careful management within the divisions and University Administration, job losses at Johns Hopkins were much lower than those in the higher education sector generally—about 1.2% at JHU compared to approximately 10% across higher education.

Last updated: Feb 4, 2021 10:41pm

Do these positive results mean you can continue the fall’s undergraduate tuition reduction in the spring?

No. Undergraduate tuition for the spring remains at the originally published rate.

As announced in August, the reduction in undergraduate tuition for the fall semester was a one-time action taken as part of a package of supports in recognition of the university’s decision to pivot to remote-only education in the fall semester.

This spring, the university is offering an in-person experience for undergraduates who want one. In order to deliver this successfully and safely it has incurred substantial additional expenses related to COVID mitigation measures, including facilities for testing, contact tracing, and isolation and quarantine.

Last updated: Feb 4, 2021 10:42pm

Why is JHHS taking a different approach from the university in relaxing austerity measures?

Both JHU and JHHS have experienced better than expected financial performance in recent months sufficient to ease some of the austerity measures instituted at the beginning of the pandemic. The approaches each took are a response to the unique priorities and needs expressed by their workforces, with the university focusing first on restoring employer retirement contributions and the health system beginning with wage increases.

Last updated: Feb 4, 2021 10:44pm


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