UK budget holds down prices, debt and continues investing in state’s future

LEXINGTON, Ky. (June 13, 2025) — Holding down prices so more students can attend college.

Helping more students graduate and enter the workforce without any student debt.

Prudently planning for the future by making strategic investments in the state and growth in areas ranging from health care and research to athletics.

Those principles are the drivers of the $8.6 billion budget for the University of Kentucky in Fiscal Year (FY) 2025-26. UK President Eli Capilouto said the budget, approved today by the UK Board of Trustees, is how the university intends to “advance Kentucky” in the coming year.

“This budget demonstrates with clarity and focus, humility and pride, compassion and commitment, what we care about: Kentucky,” Capilouto said. “Our aspirations, no matter the time or how daunting the challenge, have never been higher or more essential: We dream of a state that tomorrow is healthier, wealthier and wiser than it is today.”

Key highlights of the budget include:

Students and their success

• The budget includes a modest increase of 3% as authorized by the Council on Postsecondary Education (CPE) in tuition and mandatory fees, designed to hold down prices and increase access. The Fall 2025 tuition and mandatory fee rate for undergraduate students from Kentucky will be $6,953.50, up from $6,751 in Fall 2024.
• At UK, for six years, the rolling, four-year average for tuition and fee increases has been under 3%.
• The percentage of UK students graduating without debt is now over 50%, backed by continually increasing levels of financial aid.
• More than 90% of resident undergraduate students at UK receive financial aid, comprised of university, federal and state resources, that doesn’t have to be repaid.
• The result of those efforts is the preliminary projection of a record number of more than 6,800 first-time, first-year students this fall — what would be the fourth straight class of more than 6,000 students, even as six-year graduation rates continue to climb with a historic high of more than 70%, placing us among the top 100 institutions in the country.

Caring for the people who care for the mission

• The budget includes a 1.5% increase in compensation for all eligible UK and UK HealthCare employees, with a minimum raise of $750.
• It’s the 12th time in 13 years UK will have provided compensation increases.
• In this budget, UK is investing more than $80 million in additional compensation and benefits.
• The university is also expanding parental leave and elder care leave — from two weeks to four weeks for parental leave and from one week to two weeks for elder care leave.

Prudent investments in discovery, health and growth

• UK’s budget anticipates a record level of more than $500 million in research funding and expenditures in the year ending June 30, 2025.
• So much of that research is funded by the federal government and focused on the diseases, maladies and challenges that most confront the state.
• UK is projecting an approximate 10% decline — what Capilouto said is a prudent approach — given the uncertainty of funding streams and the current federal research agenda.
• The health care enterprise, which cares for people in every region of the state and beyond Kentucky’s borders, has a more than $5.1 billion budget for FY 2025-26.
• Over the last 15 years, the university has initiated more than $7 billion in new construction — classrooms and labs, living and learning spaces, health care and athletics facilities.
• Yet, in FY 2025-26, debt service as a percentage of the total budget will remain below 2%.
• This budget also details potential investments by UK Athletics of up to $110 million in their facilities over the next few years, part of a new governing model and operating structure for UK Athletics, designed to grow revenues to ensure long-term financial stability and a capacity to grow. You can read more about those investments here: UK Board considers more than $100 million in investments in future of UK Athletics | UKNow.

“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.”