The archway in front of Southern Oregon University's Churchill Hall in an undated provided image.
Jane Vaughan / JPR
With a $15 million boost from the state legislature, Southern Oregon University has resolved its short-term financial woes. But its long-term future is still uncertain.
At a Friday board of trustees meeting, Oregon State University President Jayathi Murthy dismissed one possibility.
“We believe that a merger between OSU and any other Oregon public university is not in the best interest of the state or OSU,” she said.
Murthy said a merger would expose OSU to financial risk at a time when Oregon’s public universities are already under strain.
Public universities across the state face rising personnel costs for benefits, such as retirement and health insurance, declining enrollment and what university leaders describe as inadequate state support.
SOU, in particular, is confronting its third fiscal crisis in four years. University leaders said the school would fall below its approved cash threshold of $12.68 million later this year. By the end of February 2027, administrators project the university won’t have enough cash to make payroll. Leadership anticipates a shortfall of more than $14 million by June 2027.
The $15 million bailout from the state comes with lots of strings attached.
Related: Lawmakers weigh $15 million lifeline for Southern Oregon University
The money is allocated to the state’s Higher Education Coordinating Commission and managed by the legislature’s Emergency Board. SOU is required to submit monthly financial statements and quarterly reports, and the HECC is working with the university and a consultant to develop a long-term financial sustainability plan by the end of April.
“The plan will serve as a roadmap to a new, fiscally sustainable SOU for the 2027-29 biennium and beyond,” SOU President Rick Bailey wrote in a recent email to staff. “Our work to create a fiscally sustainable university will require that we make sobering choices as we identify those programs and services that most critically serve our region.”
Meanwhile, the state is also evaluating the long-term viability of Oregon’s public universities, including potential integration.
Rumors of potential mergers have swirled, prompting discussion at the OSU trustees meeting.
“Merely moving SOU under different management does not solve its financial and enrollment issues,” Murthy said. “We are in a time of extreme disruption and must focus our efforts on the well-being of our institution first.”
Trustee Román Hernández said assuming another university’s financial obligations would pose risks for OSU.
“It is imprudent to make that type of change to saddle us with obligations of other institutions,” he said.
Related: Portland State declares financial crisis, reveals plan to cut or reduce 19 departments
HECC Executive Director Ben Cannon sought to ease some of those concerns.
“A merger alone is not a way of solving the underlying problems that contribute to financial distress at an institution,” Cannon said. “[They] are very time-consuming, complex and typically require additional resources to execute and undertake.”
Still, Murthy said OSU is ready to assist SOU.
“We are open to pursuing academic collaborations and exploring expanded shared services,” she said. “We want to be as helpful as we can in this difficult time.”
At a committee meeting on Tuesday, OSU Vice President for Finance and Administration Carla Hoʻā said SOU’s situation is still precarious, even with the $15 million.
Hoʻā said she recently worked with the HECC, the state Department of Administrative Services, the University of Oregon and the Oregon Institute of Technology to review SOU’s fiscal outlook.
“Without fundamental changes to enrollment strategy, program alignment, cost structure and long-term economic positioning, Southern’s financial challenges will likely compound over time,” she said. “Without significant structural adjustments, that institution could face renewed financial pressures as early as July 2027.”
JPR is licensed to Southern Oregon University, but our newsroom operates independently. Guided by our journalistic standards and ethics, we cover the university like any other organization in the region. No university official reviewed or edited this story before it was published.
Jane Vaughan is a reporter with Jefferson Public Radio. This story comes to you from the Northwest News Network, a collaboration between public media organizations in Oregon and Washington.
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