By Loraine DeBonis/For The Sentinel
MURRAY – Calloway County’s largest industry – education services – faces the potential for millions in federal funding cuts following President Donald Trump’s flurry of executive orders aimed at education; diversity, equity and inclusion (DEI); school lunches; and scientific research.
Between the county’s two K-12 school districts and Murray State University, education is also the largest employer, accounting for 16.7% of the workforce, followed by manufacturing (12.2%), and health care and social assistance (11.9%), according to Data USA.
MSU is the centerpiece of Calloway County’s economy, generating $265 million in annual total revenue from university employee, student and visitor spending, according to an MSU economic impact report updated in 2024.
The university expended $60.5 million of federal grant and student financial aid funds in fiscal year ‘23-24, 87% of which was for student financial aid, Shawn Touney, MSU’s executive director of marketing and communication, told The Sentinel in an email.
“Murray State has not received any official communication [about federal funding cuts] and will continue to monitor, along with all other policies and procedures at the state and federal levels. Any possible impacts are speculative in nature at this time,” Touney wrote.
Trump’s executive orders affecting education, many of which are being challenged in court:
- promote using public funds to fund private institutions
- require colleges and universities to eliminate DEI offices and programs
- and restrict how funding for scientific research funding can be used.
At press time, widespread reports said an executive order to dismantle the United States Department of Education (ED) is imminent, although newly confirmed Education Secretary Linda McMahon said that eliminating the agency would require an act of Congress.
In addition to ensuring equal access to education, investigating civil rights violations in schools and conducting research, ED awards more than $120 billion a year in grants, work-study funds and low-interest loans to approximately 13 million students. The federal agency also manages $1.5 trillion in student loans and repayment programs.
Proponents of the plan suggest that disbursing and managing financial aid and loans could move to the U.S. Treasury while critics argue that the agency, which is facing staff and budget cuts of its own, would be hard-pressed to take over the task.
How these changes will affect MSU and our local economy “is always hard to predict because of how interconnected everything is,” said Shelly Baskin, finance and operations manager for the United Campus Workers-CWA. “For example, if a university loses grant funding for a big STEM (science, technology, engineering and math) program, they might just decide to close that program and lay off the staff.”
Or, he added, they might shut down a different program to keep the STEM program going.
The Trump Administration’s cuts to National Institutes of Health (NIH) funding for scientific research, including a 15% cap on indirect costs, are weighing on the mind of MSU Associate Professor of Cellular and Molecular Biology Gary ZeRuth.
“Our research program relies entirely on federal funding from the National Institutes of Health,” ZeRuth said. “NIH grants not only provide money for required supplies and reagents, but also pay researcher salaries, provide tuition support and stipends for graduate students, and help disseminate research findings at research conferences and in peer-reviewed journals.”
ZeRuth said his lab, which studies the role of genes in cellular division, could help identify therapeutic targets for the treatment or prevention of diseases such as diabetes and cancer.
Although NIH cuts will be more significant to tier-1 research schools like University of Kentucky and the University of Louisville, ZeRuth noted that research is an important recruiting tool for students and faculty alike.
“The success of our pre-health professional students, the college of science, engineering and technology, and the university as a whole would likely suffer if research was significantly impeded,” he said.
The potential loss in funding comes at a time when science has been expanding at MSU, including the $45.5 million construction of a new building for the School of Nursing and Health Professions and a $60 million veterinary sciences building.
Construction projects like these are among a handful expected to generate $43 million in tax revenue and 2,457 direct and indirect jobs through 2030, an MSU economic impact report estimates.
“What we know for sure is that institutions and communities tend to respond to financial uncertainty by imposing austerity in the short term,” Baskin added. “This usually starts with hiring freezes, but can quickly move to short-term furloughs, salary cuts, or even full-on layoffs depending on how dire the circumstances are.”
Salaries are the biggest expense and often the first place universities cut, but they could also look at deferring facilities maintenance, which Baskin said would affect local businesses that might be contracted to do the work or provide supplies.
“If there are cuts to the university, we will be directly impacted,” said Breanna Morales, Murray native and owner of The Willow Bistro, a restaurant located directly across from campus.
A favorite of professors and administrators hosting small parties, guest speakers or prospective employees, Willow Bistro took a 50% hit to sales at the start of the pandemic when activity on campus was limited, Morales said. “The more people on campus, the more sales.”
Tonya Wetherington is regional sales manager for Gopal Hospitality Management, which owns SpringHill Suites in Murray. She said the hotel has a great relationship with the university, which brings in many people but is not the primary source of sales.
Local factories, other businesses and groups like the Murray Chamber of Commerce often host visitors or events at the hotel in addition to the traffic from MSU parents, alumni, Greek organizations and athletic opponents.
“I don’t want anyone to lose their funding,” she said, but the prospect isn’t a big concern for the hotel, which opened in 2016 and employs 25 full-time and 10-15 part-time workers. Wetherington also pointed to the expansion of the MSU’s nursing program and new veterinary degree as positive signs for the future.
Sydney Littrell, from Little Rock, Ark., chose Murray State specifically because it was the closest university to her hometown that offered a “strong” undergraduate Teaching English as a Second Language (TESOL) program.
“I’m personally most concerned about schools losing Title I and Title III funding, and teacher pay remaining low,” said Littrell, who is in her third year at MSU.
Federal Title I funding is used to support low-income students, and TItle III funding is used to help English language learners, like those Littrell teaches in her current practicum placement in Mayfield.
“I am worried about new legislation (especially budget cuts and anti-DEI) making work in our field more difficult,” she said.
This article is the second of a two-part series. Part One focused on K-12 education.
