After a $68 million shortfall largely due to missed enrollment targets for the 2024-2025 school year, American University has announced its projected budget for the coming 2026 fiscal year — $827.9 million.
A Dec. 5 community forum was held to discuss the current budget deficit, primarily focusing on the administrative plan to stabilize the declining enrollment rates for both undergraduate and graduate students. The expenses and revenues for the projected 2026 budget was also discussed.
Chief Financial Officer, Vice President and Treasurer Bronté Burleigh-Jones led the discussion alongside Acting Provost Vicky Wilkins and Associate Vice President and Chief Human Resources Officer Marshall Taylor.
“[There are] lots of questions coming up about whether we actually, really have a deficit — we really have a deficit,” Jones said. “We don’t have an immediate revenue solution for the expense growth that we’re realizing. That is a structural deficit.”
The University is projecting an $80 million shortfall next year, according to Burleigh-Jones. Housing and auxiliary revenue was down $6.4 million this year, due to a smaller incoming class, with less underclassmen living on campus. To improve this, the University is instituting a two-year mandatory housing requirement, beginning for the incoming freshmen class next fall. This loss in revenue was “not as severe as we thought it would be,” according to Jones.
The University was tracking for the $33 million shortfall and planned accordingly, prior to the additional loss from enrollment, according to Jones.
“We are in the process of doing a comprehensive institutional assessment, where we were looking at how we're doing everything at the University,” Jones said during the Dec. 5 community forum.
Low enrollment is the root of the University's need to pull from reserves and savings to maintain a balanced budget. Evelyn Thimba, vice president of Undergraduate Enrollment Management who joined the AU administrative team last summer, attributed low enrollment to a dip in rankings, an impacted campus climate after protests post-Oct. 7 and updates to the annual Free Application for Federal Student Aid, or FAFSA. She was not present at the Dec. 5 community budget forum.
“AU has maintained relatively flat application numbers, even when we knew that high school students were applying to more schools,” Thimba said in a Nov. 20 interview with The Eagle. “That wasn’t a good formula for us.”
Thimba hopes to see an uptick in enrollment numbers as soon as next year, after she initiated an Early Action option for prospective American University applicants. According to Thimba, the University has already seen 14,000 applicants through Early Action. This is almost 75 percent of last year’s total applicant pool, showing a likelihood of a larger applicant pool overall for this year.
The new Early Action application option paired with improved University marketing strategies and prioritization on demonstrated interest is planned to improve enrollment rates.
“The cast of leaders who have been brought to this institution are some of the best in the industry,” Thimba said. “I firmly believe that once we get out of this past year, the type of vision and strategy that we’re putting in place will allow us to propel this institution forward. This is a great place, I wouldn’t have come if I didn’t think so.”
Matt Bennett, vice president and chief communication officer, said dips in enrollment are a trend across higher education.
“We knew last year we were going to see, you know, a dip, and we're planning for and accounting for that and figuring out how we go forward,” Bennett said in an interview with The Eagle. “We continue to focus on, you know, meeting our enrollment targets and aligning the budget and our resources to that reality.”
The University is offering a voluntary retirement incentive program to long-serving employees to consider retiring from AU with a “defined financial compensation package,” according to a Dec. 4 email from Wilkins and Burleigh-Jones.
Faculty and staff who are at least 55 years old, and served at least five years of consecutive full-time service at AU are eligible for VRIP. The application process will open for eligible employees on Jan. 6, 2025 and close on Feb. 7, 2025. Retirements will take effect in May 2025.
Burleigh-Jones said not everyone who submits a VRIP application may be eligible for the retirement package as administration works to ensure alignment with how they’re thinking about restructuring the University.
“We reserve the right to limit the number of critical roles that we would allow to participate in the program,” Burleigh-Jones said in an interview with The Eagle. “Lots of people are eligible, but we will take into consideration what the University's needs are as we entertain the applications that are submitted.”
Wilkins and Burleigh-Jones said in the Dec. 4 email that the University will update organizational structures to “our resources with our student, academic, and operational needs, the changed enrollment environment, and future strategic opportunities.”
While Burleigh-Jones said the University doesn’t yet have specific criteria to determine the changes, she said there are a “number of redundancies across the University.”
“We don't have a road map to say that we're going to get rid of this and this, and this is to do a critical examination about what is appropriate for us going forward,” she said. “So that's why we're telling people we're not rushing to judgment.”
The University hired Huron Consulting last year to conduct a strategic workforce assessment and started to meet with staff and faculty who supervise staff last December.
Students and faculty raised concerns over Huron Consulting’s history of layoffs and program cuts at other universities.
Burleigh-Jones said Huron’s assessment is just one data point under consideration that will be “further informed by the job architecture.”
“They did an assessment across the University and said, you do have some redundancy and services here, there and in other places. That's a simple data point. And I want to be very clear here, Huron does not tell us, did not tell us, right, how to structure our University,” she said.
When The Eagle asked if she anticipates layoffs, Burleigh-Jones said “the possibility exists that there will be some streamlining of our workforce.”
One attendee at the Dec. 5 community forum expressed their frustration at the disparity in administrative salaries compared to faculty compensation, asking if the University is considering cutting those expenses to aid bridging the deficit. Other faculty expressed their support for the question, and though Taylor did provide a response, the meeting was quickly cut short.
“I think it’s really telling that the meeting ended very quickly after that question got brought up,” said Aubrey Hill, a career services systems administrator. “[Real leadership] would be willing to step up and make reductions in order to maintain the integrity of the community. I think that it’s really telling that they’re not even talking about it.”
This article was edited by Olivia Wood and Tyler Davis. Copy editing done by Luna Jinks.
