Financial state of the university

On Feb. 17, Senior Vice President for Finance and Treasurerof the board Susan Scroggins presented to the Student Senate on the financial state of the university. Topics covered in Scroggins’ talk ranged from sources of revenue to full-time student enrollment and were aimed at providing transparency about the university’s financial health.

The university’s campus has changed a lot over the years as many new buildings and features are constructed quite frequently. As of 2019, the University assets total $600 million. Since the year 2000, the number of these planned assets have tripled as the construction of many new buildings such as the Harre Union (2009) and the Duesenberg Welcome Center (2013) have been almost completely funded by donors.

The university shifted its fundraising goals in 2010 to focus more on aid than buildings.

“We started to focus on fundraising for endowments. So rather than fundraising to build buildings, the switch was made to fundraise and focus on scholarships, focus on programs and focus on professorships,” Scroggins said.

The construction of buildings has not stopped since the shift in focus was made — in 2017, the construction of the Center for the Sciences was completed. Scroggins stated the university borrowed money after fundraising objectives shifted to construct certain buildings, such as the Arts and Sciences Building and Beacon. This has caused the university to accrue about $115 million in long term debt, which Scroggins defined as non-taxable, conservative debt that can be refinanced this year.

Enrollment of full-time students has decreased across all boards; the largest declines have been seen in law and graduate students. In 2017, the decision to stop admitting students into the law school was made, making the most negative impact in overall student population.

While the total amount of law school students had been on a slight decline between 2014 and 2016, Scroggins noted a drastic drop from 2016 to 2019 with the bulk of the decline happening from 2016 to 2018.  There are currently 16 students enrolled in the law school this school year — about 600 students fewer than how many were enrolled back in 2014.

The graduate school has also seen a drastic decline in enrolled students. According to Scroggins, most of the graduate students were part of the university’s graduate IT program who came from a single town in India.

“Once the agent stopped feeding those students to the US, and once it got a little bit harder for those students to actually come to the US, that population fell off,” Scroggins said.

Undergraduate enrollment has also decreased, but only slightly when compared to the law and graduate schools. The freshman classes in 2017 and 2018 were two of the largest in recent Valpo history. Specifically, 2017 saw the highest number of freshmen in 30 years. Comparing undergraduate enrollment in 2014 to that of 2019, undergraduate enrollment has decreased by about 20 people. While this does not seem like an issue now, Scroggins acknowledged it could be a problem in the future.

“The challenge is going to be if it holds flat and we’re bringing in a smaller freshman class, and these bigger classes are graduating then it multiplies very quickly,” Scroggins said.

According to Scroggins, preliminary numbers are looking good so far, however the university is planning ahead for another decrease in undergraduate enrollment. 

Scroggins noted the amount of high school graduates expected to attend college is projected to decrease from the next five to ten years. According to Scroggins, this problem will be felt at all institutions across the nation. 

To try and combat this, the university has ramped up their national advertising and has added new programs to the general catalogue such as Music Therapy and Bioengineering.

This decrease in overall enrollment has made it impossible for the university to make enough money from tuition, room and board. Scroggins stated the amount of revenue generated by these items in 2019 was $81.5 million. The cost of operation in 2019 was $126.5 million, leaving a $45 million gap between revenue and expenditures. This gap has increased over the years; ten years ago, it was only $30 million.

To combat this difference, the university turns to other sources of income. The university has an endowment fund it is allowed to dip into for a designated amount of money each year to put toward scholarships, professors and programs. Scroggins also stated the university receives annual grants and generates some revenue from houses rented to faculty and staff.

Scroggins stated the university spends most of its money on unfunded financial aid; about $73 million is spent on this. Scroggins stated this is done to try and help families afford to come to the university, and that Valpo spends much more on this than other institutions.

“We also know that we can’t probably sustain that over time,” Scroggins said.

Student Senators asked Scroggins many questions about how the university is responding to these financial troubles. Senior Senator Dylan Ogle questioned whether the removal of the Uptown East apartments as on campus housing and changing the requirements to live off campus were ways for the university to get more money out of students.

College of Engineering Senator Craig Behnke asked whether the university has considered abandoning the current model that increases tuition every year and adopting a flat rate model instead. Scroggins stated a board has been reviewing a variety of tuition pricing strategies. 

Junior Senator Isis Zaki prompted Scroggins to discuss whether these strategies are in response to the changes in enrollment.

“It’s actually a multitude of things. Some of it is enrollment . . . . Some of it is actually a nod to the realization that family wealth has not increased much over the past several years. And so there’s more pressure to try to help students to be able to afford a college education,” Scroggins said.

Sophomore Senator Jolie Foor mentioned that students would like the university to be more transparent about their financial state and asked whether an email could be sent out occasionally to disclose this information. Scroggins stated all universities are required to post their financial information online for the public to read. This information can be found by Googling “EMMA bond disclosure.”

Junior Senator Kaitlyn Steinhiser asked the question many have wondered themselves — whether the university will be around and in good shape in the next five years. 

“If we lose 500 students next year, that would be a problem. But I don’t see that happening,” Scroggins said.

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