SCSU’s financial mishap

Whenever one hears that St. Cloud State University is facing a budget loss of $9.5 million in student enrollment, we typically assume that future financial prospects are not looking good. That is true, but in fewer ways than what people may think.

“As an enrollment management person, I am worried that people will jump the gun and misunderstand this. ‘Oh, we have less money, so we are going to give less services to each student,’ not exactly,” said Bruce Busby, the dean of university college and associate provost for student success. “What it really means is, there are fewer students, so we need fewer people to provide the same services.”

That statement is part of the plan SCSU has created to counter the loss from enrollment. Their goal is to reduce their workforce between 5 and 7 percent. That percentage would result in the loss of 100 to 125 staff and faculty. The idea is to make cuts across the board, and where they are appropriate.

Overall, in the last three years, there has been a 17 percent reduction of the student population. Despite that significant loss, the number of employees for full-time has actually risen.

“There is a little disconnect, and that’s what is behind all of that stuff,” said Tammy McGee, the vice president for Finance and Administration.

The University also plans to use all of their square footage of their buildings appropriately, and close off some of them that are not needed.

“This gives a sense of what we are looking at and the assumptions that were made when looking at the plans for moving forward,” said McGee.

The cuts, in total, reflect the income that is generated from tuition and the revenue that the school receives from the state.

That leaves the question of how did SCSU get into this financial position?

According to the university’s FY15 Financial Recovery Plan, rising enrollments that occurred during the economic recession masked the “inefficiencies and poor practices” that were eventually revealed as student enrollment began to decline during the economic recovery.

The document lists reasons such as failure to pursue marketing opportunities, ineffective program reviews and consistent leadership transitions were partially to blame.

SCSU had received a substantial growth of students when the economic recession hit. Busby said their theory is that more students chose to attend school, simply because their other options for work were limited at that time. And, as the United States has slowly risen out of that recession, the school has faced a steady decline in enrollment.

The university’s financial report states that part-time students are more vulnerable to economic ups and downs, which results in a higher likelihood of not returning to finish their degrees. SCSU’s student population includes more part-time students compared to other universities, a number that is reportedly increasing.

“Full time students actually produce a bigger impact for our numbers than the students who are taking a smaller number of credit hours,” Busby said. “So notice, if we had 1,000 new students and they were all taking one credit per hour apiece, it would actually not generate a larger piece of the state pie for us, but it does generate a larger expense for us.”

The basic four-year model for an undergrad consists of 30 credits a year, typically 15 a semester to graduate on time. So if there is a student taking 12 credits, they will be here longer than four years. More time means they will be receiving the university’s full services longer, which ends up costing SCSU more.

“Many people will say, ‘gosh, these students have to take fewer credits because they are working part-time,’” Busby said. “They are working part-time because they need more money to come to school. They need more money to come to school because they are going five years instead of four, so if you start thinking about it, it is a catch 22.”

Many people believe that the cost of higher education is spiraling out of control, which may be a factual perception. But, Busby says that is just a perception.

Busby said the cost of higher education varies by college. The cost for undergraduates who go to SCSU differ than those who choose to go to Harvard.

The Chronicle Education released a recent study suggesting the return on investment of a four-year undergraduate degree in comparison to what someone who only has a high school diploma will earn over a lifetime is $500,000.

It may be true that people are more likely to find jobs out of high school now than during the recession, but the return on investment suggests the thought to bypass receiving a college education should be reconsidered.

Busby compared the investment to a car. The price tag on the average four-year university is $32,000, which is less than the price of many new cars. How long will cars last versus a college education?

Through SCSU’s financial recovery plan, they are looking at reducing the $9.5 million by $4 million. By 2016, they will have mid-term measures that will result in further cost reductions.

In this time, they plan to have new programs and new practices that will stem losses and grow enrollment numbers in certain areas, such as RN to BSN programs and software engineering, since there is a high demand for graduates in those fields. The FY Financial Recovery Plan also states plans to expand analytics and data to inform targeted strategies in admissions, student success, developing new programs, and using more effective resource planning while targeting cost reductions.

Common Student Misconceptions:

Students have many concerns regarding the University’s current financial status, some of which include a loss of funding for student organizations, the school’s overall image and possibly receiving poor quality of the services.

“I know in the past years, PRSSA’s membership has been a lot higher,” said Emily Cash, PRSSA’s president. “Our student organizations are forced to rely on their own methods of raising funds, which can be extremely stressful.”

As for student organizations, Busby explained that the University actually does not control the money that is allocated.

“The student organizations are funded by fee money that students pay. These fee dollars are lower because there are fewer students, meaning there are fewer fee dollars coming in,” Busby said. “They are in a different pool of money. They pay per credit, up to 12 credits.”

All students have certain fees that they cover through their tuition. It is the same as the athletic fee students pay in order to get into all games free of charge at the door.

Therefore, reducing the number of faculty and staff will not increase the dollars that come to student organizations, but they will aid in reducing the school’s financial loss. As the school as a whole faces drawbacks from the loss of money, so do student organizations.

Busby explained that all schools go through a period of enrollment decline, and that is typical behavior. He said SCSU is still committed to providing the best education possible should not affect the overall image of the school.

As for the quality of services, Busby and McGee said that the services students will receive will not be changing drastically.

The future financial recovery plan discusses the reduction of staff, appropriately using the school’s square footage and working on student admissions. This will not have an impact on the quality of the school’s service.

“Our commitment to you, and your commitment to us, is that we are going to work together and learn how to think well, how to communicate well, how to understand diversity and be ready to engage diversity,” Busby said. “Not as something on TV, not as something in a textbook, but something that you live. Our campus will become a sort of laboratory for learning how to live in a world that’s very different than the world we grew up in.”

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