Consultant says SOU must act fast, has ‘no margin for error’

By JANE VAUGHAN/Jefferson Public Radio

Southern Oregon University could run out of cash within 18 months without sweeping cuts and structural changes, according to a preliminary report presented to the Board of Trustees.

Consultants from Deloitte said the university must move quickly to close a growing deficit through academic program cuts, outsourcing and other cost-saving measures — or risk winding down operations.

Even with $15 million in emergency funding from the state, the university is currently operating with a $12.5 million deficit, which is predicted to increase to almost $17 million by fiscal year 2030.

Megan Cluver with Deloitte told the board Tuesday that the university should aim to maintain at least 120 days of cash on hand to be viable. Without changes, SOU is projected to have just two days of cash on hand at the end of fiscal year 2027.

Deloitte’s preliminary recommendations include outsourcing administrative services, possibly changing health insurance providers and major cuts to faculty, staff and athletics — all on a very short timeline.

The plan also proposes spinning off Jefferson Public Radio from the university, which consultants estimate could save about $300,000 annually. The report does not provide details on what that would entail.

Cluver said the proposed plan is the only option for the university, but added that it could still fall short.

“There are not many viable options for the institution, short of realizing this incredibly challenging path, other than to wind down the institution,” she said.

President Rick Bailey said in a press conference on Wednesday that the possibility of winding down SOU is sobering.

“There are some pretty significant headwinds that everyone in higher education is facing, not just SOU,” he said. “It’s stark, and it’s scary to hear that. But I also think we need to be very clear eyed and not make light of the challenges that we have, that all of us have in higher ed.”

Cluver said the university must also overhaul its academic offerings to better align with student demand and regional workforce needs.

“We need to fundamentally change the set of academic programs that you are offering today in order to get you to a balanced budget by the end of the next fiscal year,” she said.

The plan calls for SOU to focus on serving both younger, traditional students, as well as mid-career, non-traditional students.

“The current student demographic has changed,” Bailey said Wednesday. “It’s far different than it was 50 years ago.”

This is the latest in a period of recent turmoil for SOU. In 2023, the university cut more than 80 full-time-equivalent positions. Trustees then approved an additional plan in September 2025 to cut more than $10 million over four years.

SOU is not alone in its financial situation. Cluver cited pressures facing higher education across the country, including shifts in federal funding and fewer students going to college.

One trustee asked Tuesday about the possibility of a merger or acquisition, but Cluver was blunt.

“The university is not a particularly attractive acquisition target for a larger university,” she said.

The tight timeline also limits the university’s ability to pursue longer-term revenue strategies, Cluver said.

The plan is not final. Deloitte is expected to release a full report Monday, which will include further details.

SOU’s Board of Trustees is scheduled to vote on it next Friday. The changes would need to be completed by June 2027.

Nevertheless, Cluver said there is “real reason for hope,” a sentiment Bailey echoed Wednesday.

“I have a responsibility to make sure that [we do] everything that we can possibly do to keep this institution moving forward,” Bailey said. “[That] is something that I take very seriously, and so I’m not losing my resolve on that.”

Jane Vaughan is a reporter with Jefferson Public Radio, which is licensed to Southern Oregon University but operates independently. It covers the university like any other organization, guided by high-quality journalism standards and ethics. No university official reviewed or edited this story before it was published.

JPR is based in Ashland and reports on southern Oregon and northern California. It strives to build a diverse community of informed citizens through fact-based journalism that stimulates civic discourse, inspires community engagement and fosters the art of storytelling.