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Dear Â鶹ÊÓƵ Community,

An important milestone every fall semester is the annual university census. The measurement provides insights about the size and composition of our undergraduate and graduate student community and data for our ongoing budget management. More broadly, this information helps us move our mission forward. Understanding the makeup of our student community contributes to our ongoing enrollment and retention work, which is fundamental to supporting student thriving and helping students graduate and achieve their goals.

In assessing our census results, it is important to be mindful of broader trends in higher education that are creating challenges in enrollment and retention, pressuring institutions across the country and requiring new thinking. Nationally, graduate student enrollment declined 1.2 percent last year, with particular impacts on the number of international graduate students. While graduate enrollment saw growth during the pandemic, the overall market shows signs of concern moving forward due to economic factors and changing student perspectives on the value proposition of postsecondary education. On the undergraduate side, overall undergraduate enrollment nationwide dropped by 12 percent since 2010, and projections show a 10 percent decline in the number of high school graduates between 2026 and 2037. In regions of the country where Â鶹ÊÓƵ traditionally recruits a significant number of students─such as the Northeast, Mid-Atlantic, and Southeast─the number of 18-year-olds could decline by more than 20 percent. Alongside additional factors such as the changing value proposition for higher education, we must account for these macro developments concurrent with the specific conditions for Â鶹ÊÓƵ.

With this year’s census now complete, we can provide the latest information on FY24 enrollment progress and related budget outcomes and the plan for the FY25 budget. As we previously communicated, we projected an approximately $30 million shortfall in the FY24 budget due primarily to enrollment and retention results not meeting this year’s targets. The fall census enrollment numbers update our projected shortfall to $30.8 million. Within the shortfall, undergraduate enrollment revenue is $7.3 million below budget and graduate enrollment revenue is $18.5 million below budget.

This is a challenge, but one that we are addressing through careful expense management, increased revenues in select areas, and reserve funds. As part of strong fiscal management, the university maintains reserve funds for onetime uses in unforeseen circumstances, whether opportunities or challenges. These funds can be used to cover a singular financial gap, but they are not additional discretionary funds or a source to manage multiyear or structural financial shortfalls.

Based on our ongoing budget management efforts, we are positioned to resolve the FY24 shortfall provided spring enrollment, retention, and study abroad targets are met. Teams across the university are moving this critical work forward. We all can contribute to its success by providing excellent support to and engagement with our students. Retention and admissions are a top priority now and for our future.

Moving forward, we have a thoughtful approach to continuing our momentum and preventing negative impacts from the larger higher education contexts. While we manage the FY24 budget, we are concurrently planning for FY25. We will craft a one-year FY25 budget that reflects our community values and the principles of previous budgets, including affordability and access, research, student thriving, experiential learning, revenue growth and diversification, inclusive excellence, and investing in compensation and benefits for our people. The FY25 budget will be balanced, accounting for this year’s shortfalls and projecting any future potential impacts. A one-year budget will allow us to advance both near and long-term strategic priorities, maintain our momentum, invest in our people as we move our mission forward, and prepare for the presidential transition in the spring.

Extensive work is already underway to evolve and strengthen our enrollment and retention strategies, which directly impact our budget planning and ultimate financial outcomes. With more than 90 percent of our revenue based on student enrollment and retention (e.g., tuition, housing, fees, etc.), our success in supporting student thriving bolsters our mission and furthers the financial health of the institution. The one-year FY25 budget will provide our teams with the opportunity to make substantial progress in these areas as we negotiate the full range of decisions required in any strong budget process to achieve a balanced budget.

Additionally, we will use this year to thoughtfully review how we approach our work to help inform future strategy and budget decision-making. This includes our academic vision; our student support services; our research; our people structures and support, including our ongoing investments in compensation; our resource management; our revenue diversification including the endowment and the post-Change Can’t Wait fundraising priorities; and our expense management and operational efficiencies. This approach will enable the next president to work with the Â鶹ÊÓƵ community on a strategic two-year (FY26 and FY27) budget with extensive data that informs our future goals and path forward.

We will craft the FY25 budget in two phases─determining tuition, housing and meal plan costs, and fees in February 2024 and finalizing the remainder of the budget, including expenses and compensation and benefits investments, in April 2024. All elements of the budget are ultimately approved by the Board of Trustees. Budget guidelines and instructions will be provided to schools, colleges, and administrative units this fall. We will host a series of faculty and staff forums in partnership with the Faculty Senate and Staff Council to discuss this budgeting process and the institutional assessments that will be undertaken this year (RSVP for Ìý´Ç°ùÌý). These are important opportunities to hear from you and help the community understand of the key aspects within the budget.

We look forward to engaging with you in these sessions as we plan our budget together.

Sincerely,

Vicky Wilkins
Acting Provost and Chief Academic Officer

Bronté Burleigh-Jones
CFO, Vice President, and Treasurer