This is just going to continue. The demographic shift is being accelerated by traditional colleges that undermine their own value proposition by shifting to virtual learning. Better to get control of the spending now. Small adjustments early are preferable to massive adjustments late.
Balances in tuition reserve funds across the University of Wisconsin System are at their lowest levels since 2008. Without a significant cushion, some campuses are cutting spending and staff to address financial problems caused by declining enrollment, the coronavirus pandemic and eight years of frozen tuition.
Within the UW System, some of the tuition fund balance declines were significant. UW-Stout reported a negative balance of $133,181 at the end of June. The campus had more than $8 million in reserves three years before. UW-Whitewater saw its tuition balances drop from more than $15.5 million to under $3 million in that same period, a decline of more than 81 percent.
UW-Stout lost more than 1,200 students between 2016 and fall of last year, according to the UW-System’s Accountability Dashboard, which works out to a near 13 percent decline. This year, enrollment has fallen again by around 5 percent from fall of 2019, meaning the campus will take in nearly $2 million less in tuition revenue than expected.
UW-Stout is the third regional campus to submit a savings plan to the UW System’s central finance office in the past year, following UW-Stevens Point and UW-Oshkosh.
In December 2019, UW-Oshkosh Chancellor Andrew Leavitt announced the university had to reduce its budget by 7.5 percent through 2021 or it would “simply spend more money than we will bring in,” without enough reserves to cover the difference. Leavitt said at the time that the university would use retirement buyouts to cut an estimated 70 staff positions.
As of June, UW-Oshkosh had nearly $11 million in tuition balances, which a campus spokesperson said works out to 4 percent of its overall budget and represents half a month of operating expenses.
After three years of significant enrollment declines, UW-Stevens Point made national news in 2018 when Chancellor Bernie Patterson announced up to 13 degree programs would be cut to save money. Ultimately, the plan was dropped.
That same year, the campus developed a financial recovery plan with the UW System, which runs through 2022 and included $8 million in cuts. A campus spokesperson told WPR the university has reduced its staff by 58 employees over the last two years through early retirement buyouts, leaving vacant positions unfilled and laying off a small number of people.