Declining enrollment forces SCSU to face financial deficit

in News/SCSU News by

Financial difficulties due to declining enrollment have effected almost every institution in the Minnesota State Colleges and Universities (MnSCU) system. However, as one of the largest institutions among the 31 different colleges and universities, St. Cloud State University’s nearly $10 million deficit for fiscal year 2015 has left the university facing tough budget cuts campus wide.
Enrollment numbers and trends
“I don’t know if I would call it a surprise,” Vice President for Finance and Administration at SCSU Tammy McGee said. “Enrollment has been trending downward the last couple of years.”
From its height of 18,319 students enrolled during the fall of 2010, SCSU has experienced a decline of approximately 1,000 students every year since, culminating in the current fall 2014 30th day enrollment numbers of 15,416 released at the beginning of October. In comparison to the 2013 academic year, SCSU has lost 829 students, a decrease of 5.1 percent, the largest decrease of all MnSCU universities. However, while a final headcount total will not be available until 45 days after the semester has ended, SCSU’s decline in enrollment is on track to be 3 percentage points higher than the average MnSCU university and 1.5 percent higher than all MnSCU colleges and universities combined.
In looking at SCSU’s main rival, Minnesota State University, Mankato, headcount enrollment numbers are staggering. MSU-Mankato, while still facing a decline in the number of students, is only looking at approximately 33 less students enrolled in their institution, a decrease of 0.2 percent from the 2013 academic year.
But it’s not just the decline in the number of students that seems to be placing a major financial burden on the university.
“Students are taking fewer credits. Even if we have the same number of students, the amount of credits they are taking has gone down,” McGee said.
As an institution that relies heavily on tuition dollars for revenue, the amount of credits students are enrolled for and are actively taking is crucial to their income. In comparison of the 30th day enrollments from fall of 2004 through fall of 2013, SCSU has seen a drop in the number of full-time students—students taking 12 or more credits—of 12.5 percent. Meanwhile, the number of part-time students has jumped from 23.2 percent in 2004 to 35.7 percent just last year.
As for McGee, this is a trend she has been monitoring since she started with the university a little less than a year ago.
“I’m looking at tuition revenues since FY [fiscal year] [20]13,” she said. In looking at those numbers, she has been able to determine the university has over projected its budget for fiscal year 2015 by about $9.5 million, with this number coming exclusively from the university’s general fund. And in order to balance the budget, McGee and other top administrators of the university are looking at options to cut back and consolidate resources.
SCSU evaluates budget
In order to reduce the $9.5 million problem, McGee said the university has implemented a plan of action in order to curb spending. Instituting a flexible hiring freeze in late August, McGee said this freeze will help the university reevaluate open positions and consider if filling them would be the best option.
“We don’t want to cut positions that deal with students, future students, or recruitment. We want to minimize the potential impact to our students,” McGee said. “Every time a position opens up, we will be wondering if we should fill it or pass. We have not begun the conversation surrounding layoffs.”
Instead, what McGee and others in administration are doing is looking at ways to utilize the faculty and staff they currently have on hand. McGee said work has already begun in reassigning general maintenance workers who were responsible for the now vacant Stearns and Holes Halls to other areas needing positions.
“We need to find where we can become more streamline,” she said.
Budget cuts and student organizations
While the flexible hiring freeze is in effect, students and student organizations will not be immune from this budget pitfall. In order to ensure people did not ignore the $9.5 million deficit, SCSU administration instituted a hold of approximately 5 percent on all non-personnel budgets, particularly student organizations. McGee estimates by doing so, this will reduce the budget deficit by $4 million. However, with the budget withholding being instituted after the start of the fiscal year, members of the SCSU student government fee allocations committee and the senate finance committee have had to undergo a massive re-haul of budgets proposed to them by student organizations back in January.
“In the spring semester we actually sat down and made budget allocations according to the enrollment and according to the fee caps and fee ceilings,” said Senate Finance Committee Chair and Internal Vice Chair for the Senate Finance Committee Waqas Muzammil.
Being informed to make their budget recommendations based on an enrollment decline of 3.2 percent, senate finance and fee allocations committees created a budget within those parameters. However, with the decline of enrollment currently at 5.1 percent, this oversight of 1.9 percent translates into less tuition dollars, less revenue coming into the university and less amount of money that can be used to fund student organizations.
According to Muzammil, the issues surrounding student organizations budgets deals primarily with how the bills are being paid including student stipends for different organizations.
“So they are actually using money from last semester to pay payrolls in this semester,” he said. “So because of some contracts the amount of salaries and expenses have increased and the amount budgeted was not enough so they are using current year payroll salaries to pay for the last semester,” he said.
Muzammil explains the reason for the 5 percent withholding from all student organizations, including academic departments, is designed as a safety to keep this year’s budget going. Since the decline in enrollment has exceeded the expectations of both student government financial committees, this money will in effect be used by the university to help balance its books for the current fiscal year.
McGee said the university did this so student organizations would not panic over the budget deficit and choose to spend all of their allocated funds.
“We wanted to give students the chance to think about it and give them the opportunity to figure out if they needed to reassign resources differently,” she said.
While student government will still be hearing requests for reserve funding to be used in addition to designated budgets for speakers, free balance, interpreter and equipment requests salaries to pay for the last semester,” he said.

Muzammil explains the reason for the 5 percent withholding from all student organizations, including academic departments, is designed as a safety to keep this year’s budget going. Since the decline in enrollment has exceeded the expectations of both student government financial committees, this money will in effect be used by the university to help balance its books for the current fiscal year.

McGee said the university did this so student organizations would not panic over the budget deficit and choose to spend all of their allocated funds.

“We wanted to give students the chance to think about it and give them the opportunity to figure out if they needed to reassign resources differently,” she said.

While student government will still be hearing requests for reserve funding to be used in addition to designated budgets for speakers, free balance, interpreter and equipment requests from student organizations, the dollar amount for these has been slashed in half. Now for free balance and equipment funds student organizations can only request a maximum of $1,000 and for speakers and interpreters, $400. According to Muzammil, this means student organizations will have to seek money outside of student fee dollars.

“They cannot rely on us completely since we are short on budgets,” he said.

While McGee and Muzammil insist the university is going to be fine, there are major steps they both outline that need to be addressed in order to create a sustainable system.

“When we build a budget, we are making an estimate of those revenues coming in,” McGee said. “When the fee dollars coming in are less than that and we continue to spend at the same rate, we do not have enough revenue to fund everything.”