August 31, 2021
Colleagues,
With the beginning of a new academic year, we have much to celebrate. We welcomed to campus a new class of students who have spent the last 18 months learning remotely. We held a ribbon cutting for the Nursing and Instructional Building. The design phase to upgrade Taylor Theatre will begin this fall. Soon, we will launch a capital campaign designed to increase philanthropic funds to support our priorities. There is positive news coming out of Raleigh regarding a state budget. And, it bears repeating – we have been able to successfully manage COVID-19 and provide a safe experience for our students and campus community. Although UNCG is fundamentally financially sound, the enrollment dip from the previous two years (and its impact on continuing student enrollment) continues to have significant consequences. The Higher Education Emergency Relief Fund (HEERF) along with state stimulus funding provided much needed relief to our students and mitigated some of our revenue losses, but HEERF funding is extremely restrictive and discrete. As a result, the University as a whole will need to be even more strategic and work together to regain our momentum.
Our budget model is reliant on enrollment, with 75% of our budget coming from state appropriations, tuition and fees, and auxiliaries (housing, dining, etc.). More precisely, the state appropriation formula is based on increases or decreases in student credit hour production. Any drop in enrollment has a cascading effect beyond a simple reduction to our state appropriation. A decline in enrollment results in revenue loss from tuition, fees, and auxiliaries, which directly impacts the entire campus – from student and academic programs to ITS and athletics.
As our fall enrollment numbers firm up, we anticipate overall headcount and student credit hours will be down from last year. The good news is that we will meet our new first year student target. However, the enrollment dips from the previous two years have created a “cohort drag” – the smaller cohorts ahead of our new first time cohort will continue to weigh on the budget despite gains in new students. It is nearly impossible to make up that gap with a single incoming class. Our excellent first-time in college (FTIC) retention rate surpasses the national average, and is demonstrative of the success of our students and the outstanding student matriculation efforts and commitment from individuals across campus. Great retention helps maintain our student credit hours, and, because we are working with a couple of smaller cohorts, all efforts that continue to help our students enroll and complete courses from semester-to-semester and year-to-year will help us transition through the current number of student credit hours.
Because we expect our headcount and student credit hour production to be down from last year, we must plan for three different scenarios for the current fiscal year. We have asked each division to submit plans to reduce their state budgets by 4%, 5%, and 6%, which is an aggregate reduction of between $8 million and $12 million in state funds. The reduction is in response to declining enrollment, to address unbudgeted institutional obligations, and the need to invest in strategic initiatives to attract new students and retain existing students.
We have communicated with vice chancellors, deans, faculty and staff senate leadership, and others, and outlined key guidelines and principles as we make decisions:
- Hold steadfast to our values during this process: shared fate, transparency, shared governance, broad consultation, communication, student success.
- Make strategic reductions and not across-the-board reductions.
- Our strategic framework and priorities will guide decision making around reductions and investments.
- Cost reductions should always account for the impact on revenue generation.
- Work to identify initiatives, programs, and practices that we may rethink, pause, or stop altogether.
- Reevaluate filling vacant positions, enabling units to think creatively about reorganizing, consolidating, and sharing support services across the unit or through cross-unit collaborations.
Our current situation is certainly not unique in public higher education, but reductions of this magnitude will be challenging for the entire campus community over the next two years. It is incumbent upon all of us to recruit and retain students, and it’s the most direct way to remedy our budget situation. It is also incumbent upon all of us to continue to look at how we can support the University in the most efficient and cost-effective way possible. Our promise to you is that we will continue to be transparent as the enrollment forecast becomes clearer and as we make decisions.
It is imperative that we continue to look forward and thoughtfully shape the future of UNCG. We will engage in meaningful and results-driven conversations in order for us to collaborate on actionable and sustainable long-term solutions. We see this as a real opportunity to move the University forward and we appreciate your partnership.
Sincerely,
Chancellor Franklin D. Gilliam, Jr.
Provost and Executive Vice Chancellor Debbie Storrs
Vice Chancellor for Finance and Administration Bob Shea