Enrollment and Financial Challenges—Facts, Initiatives, and Results

Posted on 2/1/2021 9:16:14 AM

A Pattern of Enrollment Decline

IUP’s enrollment this fall is 26 percent smaller than it was seven years ago.

IUP has seen a consistent drop in enrollment since its highest ever enrollment of 15,379 students (head count) in fall 2012.

Here’s our fall enrollment over the past decade:

I know that the IUP community has taken the responsibility of enrollment and retention very seriously, and there is a long list of initiatives that we have put in place to reverse this trend. Many of these ideas and program have shown positive results. Thank you for your perseverance and dedication to this critical work. This will continue to be a focus.

We know from our students and families that finances play a critical role in the college decision process and in retention of students.

We have done what we can to keep IUP affordable, including freezing tuition and fees for the last two years and introducing new tuition models to generate more revenue for student aid, to prevent cuts, and to help make our course offerings more efficient. We continue to work closely with the Foundation for IUP to keep housing costs down as much as possible.

In the 2019–20 academic year, the financial aid office awarded more than $135.5 million in federal, state, and private financial aid in the form of grants, scholarships, workstudy, and student loans to our students. In addition, more than 4,600 students received $10.7 million in university merit and athletic scholarships and need-based grants.  To further support of IUP’s commitment to affordability, in addition to scholarships provided by our generous alumni and friends, the university has now committed additional funding in the form of institutional scholarships and need-based grants beginning in the 2020–21 academic year.

Unfortunately, we have not been able to reverse this downward enrollment trend, due in great part to a major factor outside of our control: demographics.

According to the National Center for Education Statistics, the number of public high school graduates continues to drop in Pennsylvania. From 2012–13 to 2026–27, the number of high school graduates in the state is expected to drop by almost 13 percent; the decline of new high school graduates in the northeastern United States is projected at 5.6 percent. Western Pennsylvania, where a majority of our students live, is projected to be hit especially hard in terms of the decline in new high school graduates.

With fewer students available to recruit from the area where most of our students reside, our projections are that our enrollment, particularly undergraduate enrollment, decline will continue for the next several years.

The Need for Change: What Is Our Current Financial Picture?

In a word: challenging. And again, reflecting significant factors beyond our control.

During the last five years, (2014–19), the commonwealth has provided the State System with a combined increase of $65.7 million, which amounts to a 2 percent increase since 2011–12 in inflation- adjusted dollars. Prior to these funding increases, the commonwealth either cut or flat funded the State System for seven years.

State funding is at or near the same level as it was between 2005–06 and 2006–07, representing a $140-million cut in inflation-adjusted dollars over the time period.

This is an issue that we face with our State System institutions: Pennsylvania ranked 47th in the country in per student public spending in 2018.

Here is the bottom line: during the 1983–84 academic year, 62.95 percent of IUP’s budget came from state appropriations. Today, that total from the state is about 28 percent, so that means that the remainder of our E&G budget—72 percent—is from tuition and fees paid by students and other miscellaneous revenue.

While enrollment has declined 26 percent, our overall education and general (E&G) expenditures have declined only 4 percent.

Costs for educating our students continues to increase. In the last six years—from 2012–13 to 2018–19—total education and general expenditures per full-time equivalent student increased by 39 percent—from $14,360 to $19,999. Most of our academic programs—and our academic colleges—are net revenue negative, operating at a deficit.

Prior to fall 2020, we have tried to keep pace with our expenses and declining enrollment by everything short of active personnel reductions. We have cut departmental budgets by 50 percent or more and eliminated purchases of non-essential items; we have eliminated many one-time expenditures; and we have a stringent exception to hire policy, so that vacant positions are not filled unless they are judged to be essential.

I have called it “death by a thousand cuts.” While necessary and the best course of action at the time, it is not a sustainable model for a healthy university.

Our people—IUP’s talented faculty and staff—are the heart and soul of IUP. Predictably and appropriately, personnel costs are our largest expenditure. In FY2020–21, personnel costs make up 74 percent of our E&G budget.

Since July 1, 2019, through restructuring and attrition, we have reduced a total of 117.02 FTE non-faculty positions, or 17 percent, resulting in a savings in salaries and benefits of $11,156,413. This number includes a total of 85.69 FTE positions in the AFSCME and SCUPA unions and 31.33 FTE non-represented (management) positions. At the same time, through attrition, there has been a reduction in faculty FTE of about 69 positions*.

Overall, during the time that enrollment declined by 26 percent (2012–13 to 2018–19), our total employee headcount declined by 6.3 percent, from 1,553 to 1,436.

We had hoped for deeper workforce reductions to take place through attrition, including employees taking advantage of recent State System retirement incentives.

That did not happen.

In the face of declining enrollment and our projections, and current revenues and expenditures, we realized that we can no longer afford to maintain our current employee headcount. IUP was facing a shortfall of $33.9 million as we began the fall 2020 semester.

In October and December 2020, following faculty union collective bargaining guidelines, we delivered 82 letters of possible retrenchment by June 4 to faculty, with the expectation that we will reduce a total of 128 FTE positions by the beginning of the 2021–22 academic year.

We also will reduce 116.78 FTE non-faculty positions by the end of FY2021–22. Details of this work are not yet finalized.

As of Jan. 25, I have withdrawn a total of 28 notices of retrenchment sent to tenured faculty in the fall. This does not mean that positions are being restored; while some departments have changed in number of retrenchments needed, we must still make the overall reduction in our workforce. For the most part, letters have been withdrawn as the result of voluntary retrenchments, retirements, or other personnel departures.

The actions we have taken, including these faculty retrenchments, have reduced our budget deficit for this year to $16 million. For the short term, we will create a balanced budget by taking funds from our reserves. We have done this in the past to meet budget shortfalls, but it is not a sustainable solution, especially when we project another $16 million shortfall for FY2021–22.

Currently, our reserves total $66 million. If we continue to use our reserves to resolve our budget shortfalls of $16 million per year, we will run out of money in four years. Drawing from reserves is not the answer.

We must develop a budget that balances our revenues and our expenditures.

Enter COVID-19

To help our students and our families, IUP returned more than $10 million in April 2020 to students for housing, dining, and other fees as a result of the transition to distance learning. IUP also provided $3 million in assistance to all students in September 2020 in recognition of the challenges faced by our students.

I believed then, and I am even more firm in my resolve now, that these actions were the right thing to do.

I continue to be very grateful for everyone who has stepped up in so many ways to help our students and families, including everyone who has made contributions to the Student Assistance Fund/Food Pantry and Help Center. To date, we have raised more than $437,000 and helped more than 460 students through this effort.

While we received notice earlier this month that we will receive $15 million in federal funds to help the university and our students work through the pandemic, this funding will not be able to be used for general university expenses or to help us with our budget shortfall. We will provide more information to you as we get more guidelines about these funds and their use. We do know that part of this funding will go directly to students for COVID-19 relief.

While we did not include “work through a global pandemic” in our short-term or long-range planning, this university has stepped up in every way to move forward and to help our students continue their education. Thank you.

While the pandemic has created financial challenges, and made recruitment and enrollment more difficult, it is not the root cause of our budget issues. Certainly, it has accelerated the need for action, but it does not change the need for us to work together to create a financially sustainable university.

Next Steps: The Critical Need for New Thinking

I know that the workforce reductions announced in the fall caused a great deal of anger, anxiety, and sadness throughout this campus and community. I am sorry for what you are feeling. I wish our situation did not require these measures.

In spite of the distress that this has caused for so many, I see faculty and staff turning these challenges into the opportunity for new thinking: working together on next steps, coming up with new perspectives and ideas on how to address enrollment challenges and long-term budget stability, and talking about how best to move IUP NextGen forward. IUP NextGen is both a plan and a process.

IUP NextGen is a restructuring of its academic colleges and programs, designed to take advantage of changing student and workforce demands while creating a sustainable and more student-centered university. This work is ongoing and is involving collaboration throughout the university; changes will take effect in fall 2021. Change is very difficult and challenges all of us, but we must think about new ways of serving our students and doing all of our work. It’s not about doing the same with less; it’s about doing things differently.

IUP is a place that inspires great devotion and passion, and it deserve our best thinking—new thinking—on how it can continue to serve students for generations to come. While we feel these cuts very deeply, the work that we are doing remains focused on being strategic and student-centered, offering the programs that students and employers want and need for the future.

Dr. Fitzsimons and her team will continue to gather data and information to create IUP’s next Comprehensive Planning Process document to submit to the State System of Higher Education office; we will know more about our financial situation after the spring enrollment freeze on Feb. 8.

We will continue our communications with all of you, including during a Feb. 25 town hall. We will present more about our work related to enrollment and budget in this town hall, as well as information about IUP NextGen planning. Additional topics will be addressed in communications in the coming weeks.

As we keep in touch with you, please feel free to share your ideas and suggestions with us. You can submit your messages via the Contact Us email form. Messages can be sent anonymously.

Again, thank you for your continued commitment to IUP and to our students.

Stay well.



*Updated from 150 to 69 FTE faculty positions, to reflect the same time period as non-faculty positions data.