Yale University announced that an increase in the federal endowment tax will force the institution to cut costs, delay hiring and consider layoffs across units — a response to an expected roughly $300 million annual tax hit beginning in 2026. Senior leaders signaled workforce reductions may be necessary if other savings prove insufficient and said they plan to finalize any downsizing by the end of 2026 unless financial conditions change. The announcement comes as three credit-rating agencies issued negative outlooks for the higher-education sector, warning of mounting operating pressures, enrollment challenges and constrained state support. Rating firms (Fitch, S&P and Moody’s) cited enrollment declines, research funding uncertainty and new policy changes as drivers of sector consolidation and fiscal strain. Key actors: Yale senior leadership (Provost Scott Strobel, CFO Stephen Murphy, SVP Geoffrey Chatas) and major credit-rating agencies.