$8.6 billion budget for UK includes staff raises and tuition increase
The University of Kentucky board of trustees approved Friday a budget of $8.6 billion for the 2025-26 school year, which includes a 1.5% salary increase for employees and a 3% tuition increase for students.
The budget is about $252 million larger than last year’s and is the largest in UK’s history, though it’s a smaller increase than previous years. Last year, the acquisition of the King’s Daughters and St. Claire Healthcare systems contributed to a 23%, or $1.6 billion, budget increase over the previous year.
The budget was approved by the board, though student trustee Maddie Duff voted against the tuition and fee increase.
The budget comes with a dose of uncertainty, as higher education policies and federal funding under President Donald Trump could change, impacting the amount of research dollars. Higher education is also changing in Kentucky, with a new law banning spending on diversity, equity and inclusion and a restructuring of Kentucky’s performance funding model last year changed how state funding is allocated.
“This budget was actually very difficult, very challenging, to put together because of so many unknowns,” said Angie Martin, UK’s chief budget officer and vice president for financial planning.
UK President Eli Capilouto acknowledged that uncertainty at board meetings on Friday.
“We live and operate in a moment and time of heightened uncertainty — about how we are funded, how we are perceived in some spaces and how we should respond to the challenges at hand,” Capilouto said. “But if we remain firmly fixed on our mission — to advance this state in everything that we do — we will be successful. More importantly, our state will be better for it, with a more secure and sustainable future.”
This year, UK opted to give employees a percentage salary increase, rather than a salary increase pool, like in previous years. The 1.5% raise for UK and UK HealthCare marks the 12th time in 13 years a salary increase has been given to employees.
The budget also includes a $110 million internal loan to the athletics department to revamp the athletics campus off Alumni Drive, including three projects that directly affect Kroger Field. Additionally, the athletics department will receive a $31 million loan from the university to cover an expected deficit from revenue sharing with athletes made possible by the NCAA’s House settlement.
UK is predicting its largest-ever class of freshmen, estimating 6,850 freshmen will enroll this fall and a total enrollment of 36,700.
Tuition and fees for in-state undergraduate students will be $6,953, and $17,582 for out-of-state undergraduate students. Graduate student tuition will also increase by 3%, making tuition and fees for in-state students $7,541, and $18,662 for out-of-state students.
While spending on research is expected to increase in the coming fiscal year, UK is predicting a decrease the following year. Proposed federal caps on indirect costs of grants — which covers the costs of building maintenance, utilities and support staff needed to conduct research at universities — is currently in litigation, but would impact the amount UK receives for research.
This story was originally published June 13, 2025 at 11:38 AM.