SLU struggles with new financial straits

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SLU struggles with new financial straits

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In recent months, Saint Louis University has taken action to combat its struggling financial standing, which at one point had the university facing a potential budget shortfall of $8.5 million, about one percent of SLU’s overall budget.

According to David Heimburger, Vice President and Chief Financial Officer, the university’s revenue has not been able to keep up with its costs, resulting in a shrinking operating margin.

“It’s important to note the challenges we are currently facing are being experienced throughout higher education,” Heimburger explained. “You can find a number of news reports about the impact of this on other schools, both locally and nationally. “

What Heimburger is referring to is the overall decline in graduating high school students across the nation, resulting in a decline in students enrolling in higher education. In a presentation to the Student Government Association on Jan. 22, Jay Goff, Vice President of Enrollment and Retention Management, discussed the decline in enrollment, saying that since 2010 there had been a steady decline of 4 to 7 percent every year due to fewer college-aged students in the overall population.

A decline in enrollment contributes to a cycle that affects revenue and student costs.

In the latest version of the university’s strategic plan, the document acknowledges the university’s challenges, stating, “Rising tuition costs pose a growing barrier to those seeking access to the advantages of a higher education, and indebtedness is a growing burden to graduates. The primary response of higher education—lowering the tuition charged on a case-by-case basis—means less revenue to support the people and activities of the university.”

However, Heimburger and the rest of the administration are implementing changes that will balance the budget by the end of the fiscal year, which goes from July 1 to June 30.

The university has made three strategic alterations in order to ensure a balanced budget, including: temporarily increasing the amount the university spends from its endowment, reducing general expenses across the institution, and instituting a position review process in which only open jobs deemed critical to its mission are being filled for the remainder of the fiscal year.

The Department of Student Development has worked particularly hard so that these changes have had a minimal impact on students.

“What we have to really look at in Student Development work is what are the things that have direct and significant impact on students and what are the things that we do that are a little bit more indirect,” said Kent Porterfield, Vice President of Student Development.

Porterfield emphasized meeting the students’ true needs and wants ahead of what the university might perceive as what the students might regard as important, saying, “we’ve sort have shifted our focus to be more intentional and more focused on what are the things that students want to participate in and where do they need our help—because right now we aren’t able to create a lot of other things because of our staffing so we’re really focused more on student self-authorship.”

In order to do so, the department has cut costs in areas that are indirect to students, such as food and beverages at events; professional development and travel costs; spending less for directors; and renegotiating contracts in order to lower costs, and in some cases, gain revenue.

However, one instance in which Porterfield admits that students have been affected is in the student involvement center.

Since the university is implementing this position review process, the center has not been able to fill the open positions.

“We do have some turn over in the student involvement center that’s been challenging for us—we just have a lot fewer people there right now. That will be something we won’t be able to sustain long-term that will be something we’ll have to back fill those positions,” said Porterfield.

Despite the strain these issues have placed on his department’s operation, Porterfield said that situations like these could also force universities to look closely at what they’re doing and how they can do it better.

“Sometimes you have situations when you have to tighten your belt a little bit with spending; it does require you to think a little bit more creatively about what you’re doing,” said Porterfield.

“It does cause you to challenge some of the assumptions that you have and I think periodically that’s a good thing.”

While the university is going through these financial issues, students can see two new residence halls going up on campus, which poses the question: where is this money coming from?

“The construction is being financed through a bond issue [similar to a loan] that will be repaid over a period of time,” said Heimburger.

“We’ve built those costs into our future budget projections. From a financial standpoint, we also expect that the new residence halls will generate additional revenues when they open, as well as make us more attractive to top students.”

Although next year’s budget and the cost of tuition have yet to be finalized, the administration will continue to have discussions about the state of the university’s finances.

“The President’s Advisory Council has discussed our budget challenges, our strategic plan, enrollment trends here and around the country, and opportunities for innovation and entrepreneurship,” said Heimburger.

As these discussions take place, Porterfield will continue to focus on how it will be impacting students, saying, “I know students are worried, and I don’t blame them … so I don’t want the quality of the student experience to be impacted to a significant extent.”