In a challenging financial environment for colleges and universities across the country, Boston University has maintained its strong financial standing, says Nicole Tirella, senior vice president for financial affairs, chief financial officer, and treasurer at BU.
However, that stability is threatened in the long term by financial challenges faced by higher education overall and by BU’s own unsustainable imbalance between spending and revenues. These structural hurdles include growing costs associated with updating buildings and technology systems, siloed budgeting and financial decision-making, and an overreliance on tuition as a revenue source—at a time when across the country, enrollment in higher education is less certain and less predictable.
In a letter to the campus community on April 2, BU President Melissa Gilliam emphasized that to maintain its financial stability—and build strength for the future—Boston University must change some of the ways it operates, starting with the budget process itself. This transformation, already underway, aligns with a foundational tenet of Boston University’s strategic framework: developing operational excellence.
BU Today spoke with Tirella to get a sense of where things stand now, and what the path forward looks like.
Q&A
With Nicole Tirella
BU Today: Overall, what is the University’s financial outlook?
BU is entering this moment from a position of strength. We have liquidity, a growing balance sheet, and consistent credit ratings, which give us stability and flexibility in the near term. That foundation allows us to navigate periods of volatility. But similar to many other institutions, we have long-term structural challenges that need to be addressed now. We’re balancing rising costs, evolving trends in student demand, and the need to invest in technology, academic programs, and our physical infrastructure to remain competitive.
So, the question is: How do we bend that cost curve and still support our mission of teaching, research, and learning?
BU Today: How did we get here?
First, broadly speaking, the higher education sector is facing a period of significant change, including demographic shifts, increased competition for students globally, questions around affordability and return on investment, changes in policies regarding international students and financial aid, and uncertainty in federal research funding. These dynamics are putting pressure on traditional revenue models and requiring institutions to be more agile and strategic.
Internally, like many universities, our cost structure has evolved faster than our traditional revenue streams. Compensation, benefits, and financial aid—which together represent the majority of our expenses—have grown at rates that outpace net tuition growth. These are mission-critical investments, but they compound over time and create structural pressure on margins.
We’ve also made deliberate investments in access and quality by expanding financial aid, supporting faculty and staff, and maintaining strong academic and research programs. Those decisions have strengthened the institution, and they also come with financial implications.
This isn’t the result of a single event—it’s the convergence of long-term structural trends and more recent market shifts, which is why our focus now is on adapting the model to be more sustainable and forward-looking.
BU Today: Are there any financial pressures unique to BU?
We are a tuition-dependent institution, so changes in enrollment, particularly at the graduate level, have a more immediate impact on our financial performance. At the same time, being located in Boston—a highly competitive market—creates pressure on recruiting and retaining faculty and staff, which directly drives compensation and benefits costs. Higher education is fundamentally a people business, and those costs represent our largest expense.
We also face significant infrastructure and capital pressures. Our urban campus requires ongoing investment, and we have approximately $2.8 billion in deferred maintenance, reflecting years of underinvestment in both physical and technological infrastructure. That dynamic often forces reactive spending rather than proactive modernization.
So while these challenges aren’t unique, the combination of tuition dependence, competitive location, people-driven costs, and infrastructure needs makes them more immediate and interconnected for BU.
BU Today: Given these challenges, what is Boston University doing to maintain its strong financial position for the future?
We’re taking a proactive, disciplined approach—and it starts with transforming how we budget and plan. We’re redesigning our budgeting process to be more agile and strategic, enabling faster responses to short-term shifts while creating long-range planning and scenario modeling.
This began with an assessment conducted last fall in partnership with the technology and consulting firm Accenture. That assessment is now complete, and we are now moving to implement their recommendations focused on streamlining processes, improving data and forecasting, and better leveraging our financial levers.
We’re also being more intentional in asking: Are we allocating resources to the highest strategic priorities? And how do we shift when we’re not? That discipline is paired with targeted investments in areas like academics, research, and technology, as well as efforts to diversify revenue and improve operational efficiency.
BU Today: What did BU learn from that assessment?
Accenture benchmarked our budgeting practices against leading institutions and identified areas where our processes were fragmented, manual, or not sufficiently aligned with strategy. They highlighted opportunities to improve consistency, strengthen governance, and better leverage data and technology. Importantly, they also introduced more modern budgeting approaches—including multiyear planning and scenario modeling—that allow for more proactive, forward-looking decision-making.
BU Today: What will BU gain from this new budget process?
The new budget process will make us more strategic and more aligned as an institution. It enables long-range planning, giving us a clearer multiyear financial outlook and a stronger ability to evaluate investments and trade-offs against our strategic priorities.
It also improves agility, with better data, forecasting, and scenario modeling—allowing us to act proactively and use a broader set of levers, rather than relying on reactive budget cuts.
At the same time, it fosters a more integrated and transparent approach, where everyone, within their individual units, operates as citizens of the University and stewards of shared resources, with clearer visibility into decisions and their role in advancing institutional priorities.
BU Today: How will University budget administrators be involved in this process? Will training be provided?
We’ve actively engaged them throughout the process with Accenture, both during the assessment and now in developing long-range plans, to ensure the new process is practical, value-added, and works for how units operate. The goal is to reduce transactional work and enable our schools and units to focus more on strategic resource planning. And, yes, there will be training. That information should start rolling out this summer.
Ideally, this approach will bring greater transparency and a stronger two-way partnership between units and central finance, giving budget administrators clearer insight into future needs while also increasing their autonomy in shaping financial decisions.
BU Today: This is a big undertaking. Why do it now?
Because we’re in a position of strength today—but the trajectory tells us we need to act now. From a balance sheet perspective, we’re stable. But over the past few years, expense growth has outpaced revenue growth, and without changes, that trend leads to future deficits. Acting now allows us to be proactive rather than reactive.
To make the right decisions, we need a longer-term view—understanding not just the immediate impact of choices, but how they play out over several years. That’s what this transformation enables: better insight, better trade-offs, and more informed decision-making.
Higher education is inherently cyclical, but this is an opportunity to better position the University for the next cycle and, more importantly, beyond. By strengthening our financial planning and sharing that insight more broadly, we enable leaders across the University—not just centrally—to make decisions that support the institution as a whole.
This is a University-wide effort, and its success depends on active participation and partnership from across the entire institution.