Vincent Matthew Franco
With the University of La Verne facing a marked decline in student enrollment, a group of faculty and administrators are working on a “Sustainability Plan” to bridge the anticipated tuition revenue gap and hopefully reverse the trend.
The University’s Chief Financial Officer Avo Kechichian said that the University has seen an overall 20% decrease in student enrollment. This is concerning in light of the fact that the school’s operating budget is 98%-99% reliant on tuition.
Because of the decrease in enrollment, the University is anticipating a $10 million dollar deficit for the next fiscal year. Similar deficits were avoided during the past two years, despite a decline in enrollment, thanks to the Higher Education Emergency Relief Fund, a federal relief program that helped higher education institutions deal with the budgetary effects of the Coronavirus pandemic.
The Sustainability Plan is a three-year plan to coordinate efforts to grow student enrollment and budgets, and “optimize” existing resources.
Assistant Vice President of Strategy and Implementation Shannon Capaldi, who is leading the effort across the University, said the Sustainability Plan focuses on four key components: Optimizing operations, harvesting resources, identifying opportunities and allocating resources.
“The first component, optimizing operations, is really looking at our University’s current ways of doing business and looking for opportunities to perhaps do them differently, in a manner that would save either dollars, or it would save employees time so they could be focused on other things to serve the students,” Capaldi said.
Capaldi said the University would essentially review its way of operations, consolidate as needed, and repurpose time, energy and effort into other areas of University.
“We would then be harvesting those resources to help bridge the $10 million gap and/or have that saved money to then reallocate into other initiatives or new programs, or future directions that the University wants to go,” Capaldi said.
This is where identifying opportunities in part of the sustainability plan would come in.
“We have to meet the demands and the needs of our students and the community and the employers who employ our graduates… Where do we want to reallocate or reinvest those dollars? Which is the fourth bullet, the allocation and reinvestment?” Capaldi said.
“The reason that this $10 million deficit is right in front of us at the moment is because of the Higher Education Emergency Relief Funds that the federal government put out for COVID,” Capaldi said. “Those will no longer be available or renewed after this fiscal year. We have been taking advantage of those funds to help us balance the budget the last couple of years.”
The anticipated deficit also could be mitigated by increasing enrollment.
Mary Aguayo, vice president of strategic enrollment management, said adult learners are the largest source of this enrollment decrease.
“There are just about 100,000 fewer adult learners in the state of California than there were pre-pandemic,” Aguayo said. “And the University of La Verne has a very large number of adult learners, students and regional campuses. Adults are finding that there’s increased competition with the job market. Salaries are going higher, and unemployment is very low. So adult learners are not pursuing higher education in the same way. There’s just been a lot of shifts in that market.”
The second largest student group affecting the decline are international students. With travel restrictions implemented throughout the course of the COVID-19 pandemic, fewer international students have been able to come to the University of La Verne, Aguayo said.
“We’re also seeing that there’s declines in the number of students completing MBA degrees and graduate business degrees,” Aguayo said. “That’s also consistent with Southern California in the region.”
However, the level of traditional undergraduate students has remained stable and has even grown recently, Aguayo said.
In efforts to be more frugal, the school has begun “vacancy management,” to not replace open positions when someone leaves the University. Another method to save money is by taking a hard look at budget requests to see if they are going to be able to move forward with them or send them back to the requester, a process Kechichian calls prudent fiscal operations.
Academic department operating budgets have also been cut substantially.
Rick Hasse, business professor and co-chair of the Faculty Budget and Compensation Committee, believes this way of saving money is not the best approach.
“Because the money is short, we’re trying to save it,” Hasse said. “But also we’re trying to (move) it into these other new programs, which could be… wonderful programs, but at the same time, you’re sacrificing other areas of the University.”
Hasse is referring to the timing of the establishment of the new College of Health and Community Well-Being, which the University hopes will eventually increase student enrollment and revenue.
The University has invested in the COH since it officially launched in July, with a $40 million loan from the city of Ontario to help fund the construction of the building located in Ontario.
Some faculty are skeptical about the new College of Health, and are concerned about the timing of taking on this project, when other University programs are struggling with staffing and budget shortfalls.
The College of Health was created with little faculty input, Hasse said.
“I didn’t see too many students being asked, ‘Would you like to have a College of Health?’ and ‘How would that help your education?’” Hasse added.
Kechichian said everything is on the table.
“Everything will be reviewed, because the decline in enrollment that we’re facing is not a one-year issue, it is going to continue if we do not pay attention to it.”
Anabel Martinez can be reached at email@example.com.
Vincent Matthew Franco can be reached at firstname.lastname@example.org.