What is the current financial situation at the University
In the current fiscal year, the General Education budget (that portion of the University budget that funds the core instructional and administrative functions of the University) is partially funded with $4 million of University reserves. These one-time funds are supporting on-going activities and need to be replaced by a permanent source of funds. The Idaho legislature has reduced the University’s state support by about $3 million for the coming year – a 4.06% reduction in state support. Over the past few years the University has discounted its tuition revenue at unsustainable levels. As a result, undergraduate financial aid has been strategically restructured for the coming year to be more targeted and, hopefully, more effective in attracting and retaining students. This is a key step in “owning our own destiny” in creating a viable, sustainable and healthier financial picture. (revised 3-31-11)
How likely it is the University will issue another furlough? What is the likelihood for future pay increases for staff?
At this point there are no plans for a furlough next fiscal year and it seems unlikely; however, we cannot be definitive at this point because we do not know what the final level of legislative funding, tuition increase, or fall enrollment will be. The same goes for any salary changes. It is just too early to tell, but we are making fiscal progress.
What is the plan to improve the financial situation?
Despite the current situation, the outlook on the University’s fiscal position is positive. The plan is to improve funding sources that are controlled by the University so that external factors, such as state budget cuts, don’t have as much of an effect. There are a few ways we are planning to do this:
- Request a fee increase from the Board.
- Restructure tuition waiver program so that, over time, our University goes from discounting tuition by 42% to near 20%, which is slightly above where our peer institutions are. This would make a difference of about $20 million per year.
- Vandal Strategic Loan Fund – putting our funds to work for us in a collective model.
What effect will the plan to improve the University financial situation have on our own departments?
As the central budget grows, it will have a positive effect on individual department and college budgets. Eventually, there will be more funds available for university-wide growth.
If our department is successful at increasing enrollment will we have to teach more students with our limited staff?
There is a formula that will put $180 thousand of funding into instruction for every additional 100 full time students. The distribution of that money is determined by the Provost’s office. This amount will help the university maintain the faculty ratio as we grow. Enrollment growth is being built into our considerations for meeting next year’s needs.
What is the University going to do about inadequate classrooms and facilities to support increased enrollment?
The cost of improving facilities and technology is built into the cost of educating a student. As incoming students begin to be fully funded, money for those improvements will accumulate. Additionally, it is our goal to build a small, but consistent, amount into the base budget for physical improvements. Over time this amount will begin to make a difference across campus.
How can the university support increased enrollment when we are understaffed as it is?
Historically, there existed an idea that any additional student meant marginal revenue and was, therefore, a good thing. That mindset has led to understaffing and limited resources.
It costs approximately $12,000 per year to educate a student at this University. When a resident student enrolls, they bring tuition with them, plus state funding to cover that cost. A non-resident student only brings an average of $8,000; not enough to cover the cost to educate them. Students admitted without funding put a financial strain on the University.
Under the new plan, any student admitted must be funded one way or another to cover their costs. Up until now, non-resident students from surrounding states received blanket WUE waivers. Going forward, a limited number of scholarships and waivers will be granted on the basis of need and performance.
Will this limitation of waivers lead to reduced enrollment?
The University is working with a contracted recruiting agency and student applications are up 52% for this fall. The company identifies high-probability students who would be interested in what our school has to offer. So far the characteristics of applicants are comparable to last year’s students. Only a fraction of these applications will turn into admissions, but the evidence suggests that waiver limitation will not have a negative impact on enrollment.
Will the increase in fees make our institution less attractive to graduate and undergraduate students?
This university can compete on quality, not just price. Even after an increase, our tuition is below that of our peers. If we increase our prices to a competitive level, we will have the resources to make our program quality even more competitive as well.
How does the overall plan effect graduate students?
When focusing on revenue, an institution focuses on undergraduate students because they are the principle payers. Once central revenue is stabilized, there will be more money available for graduate recruitment, assistantships, and other programs.
How can the University support additional enrollment under a hiring freeze?
During this transition period, our proposal is to put $180,000 into support for instruction for every additional 100 full time students. As everyone knows, additional students don’t just require additional teachers. They also necessitate more support staff, supplies, and infrastructure. As we begin to require new students to generate enough revenue to cover their costs, there will be additional funding for educational and auxiliary services.
How will the University be able to fund large projects during this transition phase?
Every year, almost $30 million sits in discretionary budgets all over the university. The Vandal Strategic Loan Fund was implemented to use this money much like a credit union uses the money in member’s accounts. Funds will be loaned to projects with a good business plan and enough revenue to make payments back into the fund.
How will the Vandal Strategic Loans be distributed and who will receive the interest?
There will be a loan committee and board of directors who oversee and make decisions. The central budget will receive the interest to compensate for the foregone interest this money would have earned from outside investments.
How does the financial situation affect the strategic plan?
The new Strategic Plan, unveiled on January 18, includes “critical resources” to ensure that the University’s goals have the funding they require and are in concert with the budget. The plan also follows the framework of our accrediting body, the Northwest Commission on Colleges and Universities. Through this plan, the University can implement strategic growth while meeting the requirements of the NWCCU and using budgeted resources efficiently.