Facing a severe financial crisis that now threatens its accreditation, Rider University will cut its employees’ pay by 14% and eliminate somewhere between 35-40 faculty positions, representing about 25% of its full-time faculty.
Rider’s March to Sustainability Plan, which was approved unanimously by its Board of Trustees on October 30, was announced by Rider President John Loyack on Monday. According to Loyack, “the Board’s decision confronts the reality that, unless transformative steps are taken, the University will have insufficient resources to meet its payroll and other obligations before the end of the current fiscal year next June.”
Because of its deteriorating financial situation, Rider, a private university in Lawrenceville, N.J., was placed on probation by its accrediting agency, the Middle States Commission on Higher Education, on Oct. 30. Although it remains accredited while on probation, should Rider later be stripped of its accreditation, its students would lose access to federal financial aid, a blow that could prove fatal to the institution’s ability to survive, accounting for the unusual urgency and scope of its new financial strategy.
Blaming “new and unforeseen developments in recent months” that have resulted “in a significant cash shortfall,” Loyack said, “the University’s only option to overcome cash deficits is to make urgent and severe choices.” The plan calls for a major financial restructuring — resembling what might be seen as a financial exigency — to save enough money for the institution to continue operations. For example,
- Beginning on December 1, 2025, Rider will reduce the base pay of employees by 14%, or take other actions that yield an equivalent amount of savings. Salaries will then be frozen at this new level.
- Also effective on December 1, the university will indefinitely suspend its retirement contributions for employees.
- The positions of 35-40 full-time faculty will be eliminated by December 31, 2025. These layoffs will largely “be determined based on a performance analysis of related annual reports, using such criteria as merit, leadership contributions and academic area of discipline.”
- Among the remaining faculty and department chairs, teaching workloads will be increased “as soon as feasible.”
- Starting with the 2026-27 academic year, Rider will end its tuition remission benefit for faculty and their families, an employment perk provided at many private universities. At the same time it will reduce paid faculty development opportunities and other employment benefits provided to adjunct faculty.
- Rider will also streamline its administrative structure by eliminating several senior positions.
Rider will now have to submit a monitoring report to Middle States by January 12, 2026 to demonstrate that it will be able to meet the accrediting body’s financial standards by implementing the restructuring plan. As a condition of probation, it will also have to submit a teach out plan, a precautionary measure meant to ensure that students will either be able to complete their education at Rider or transfer to another institution should the university be forced to close. Middle States is expected to decide on the status of Rider’s accreditation at its next meeting scheduled for March 2026.
Rider, founded in 1865 as Trenton Business College, has endured financial struggles for years, primarily due to falling enrollment and growing debt. It’s former president, Gregory G. Dell’Omo, retired earlier this year after nearly a decade in the role, during which he oversaw a substantial expansion of new academic programs and the launch of a comprehensive capital campaign. But his tenure was also marked by controversies, including significant budget cuts, a protracted legal battle over the sale of Rider’s Westminster Choir College in Princeton, and a faculty vote of no confidence in his leadership.
Even after enacting several cost-cutting measures, Rider still ended FY 2024 with a budget deficit of more than $21 million (including depreciation), and its financial situation was growing more dire. In addition to facing the loss of an open line of credit and the need to pay back millions of dollars it had borrowed to pay for ongoing operations, Rider also suffered a downgrade in its bond-rating. Current semester enrollment and retention fell short of projections, adding to immediate cash flow problems. Furthermore, any hopes that the proceeds of Rider’s sale of its Westminster Choir campus would provide some financial relief were dashed with the administration’s acknowledgment that those funds had already been obligated to repay prior loans.
Despite the daunting financial challenges faced by the institution, Loyack tried to maintain an optimistic outlook, writing to the campus that “the significant and challenging steps outlined here would put Rider on a firmer financial footing,” before adding that “having analyzed Rider’s situation from every angle, we are confident that a promising future is possible, only if these steps are taken.”