Yale University has halted 10 construction projects amid growing concerns over federal funding, a university official revealed during a recent real estate forecast panel, according to the New Haven Register. The decision reflects a broader shift across higher education institutions, many of which are reevaluating capital plans in response to rising costs and shaky financial forecasts.

The trend of stalled construction on college campuses is becoming increasingly common. “Federal funding uncertainty has delayed planning and approvals at research-heavy institutions, prompting more conservative budgeting and a shift toward phased projects or alternative financing,” said Christopher Fields, senior vice president at Turner & Townsend Heery, in an interview with Construction Dive.

Krista Trofka, vice president of government and education advisory at JLL, echoed those concerns. “Universities are now increasingly reassessing their capital plans due to federal grant uncertainty, proposed endowment tax changes and shifting indirect cost recovery policies,” she said.

While institutional construction starts, including education and healthcare, rose 19% in May, most of the growth came from healthcare—not universities, according to Dodge Construction Network. Year-to-date, institutional construction activity is still down 2%, noted Fields.

Other schools are making similar moves. The University of North Carolina at Chapel Hill suspended work on a $228 million research building in May due to terminated grants, Axios reported. Johns Hopkins University also announced plans to reduce its capital construction and renovation spending by 10% to 20%, according to a June statement.

Even public universities are facing challenges. Virginia Gov. Glenn Youngkin paused over $600 million in funding for 10 higher ed projects in the latest state budget, writing in his veto letter: “It would not be financially prudent for me to advance these projects to the construction phase with the current risks to our General Fund forecast.”

According to Fields, broader economic conditions like tariffs, volatile material prices, and labor shortages are also contributing to the slowdown. As a result, institutions are becoming more selective.

“Many are increasingly turning to public-private partnerships and donor contributions to bridge funding gaps,” Fields added.

Trofka said that when universities do proceed, they’re focused on high-impact, revenue-generating projects. “Continue forward with projects that enhance an institution’s competitiveness,” she advised. “Prioritize those with diversified funding streams, private donations, state funding or private capital, that generate revenue.”

Yale’s pause highlights the difficult balancing act universities face in an uncertain fiscal environment—particularly institutions that rely heavily on federal grants for large-scale research and infrastructure. While elite schools like Yale have sizable endowments, even they are reassessing construction in light of possible policy changes to endowment taxation and federal cost recovery rules.

As many higher ed institutions seek to modernize aging facilities and adapt to new hybrid learning environments, funding delays could result in a backlog of outdated infrastructure. Experts note that schools are increasingly considering flexible project delivery methods, including phased construction, design-build models, and P3s to keep critical projects viable.

The ongoing pause in campus construction also raises concerns about workforce impacts for firms that specialize in academic buildings and research labs, many of which rely on predictable university pipelines. The outlook remains cautious unless federal funding pathways are clarified or alternate capital sources become more accessible.

Originally reported by Sebastian Obando in Construction Dive.