Beloit College deficit rises to $7 million after unexpected low enrollment
Beloit College will face a $7 million deficit in the 2018-2019 fiscal year, college administration announced at two town hall meetings on May 7 and 8, 2018. “At the end of the day, there’s some tough news that we face,” President Scott Bierman said at the first Budget Town Hall meeting, where Beloit College professors, staff, faculty and students heard what many had been expecting since last year’s deficit was announced.
In the 2017-2018 fiscal year, Beloit faced a $3.3 million deficit. While the administration hoped to mitigate this deficit, unexpected factors have managed to expand the amount considerably.
This combination includes a significantly lower incoming 2018-2019 class size than the administration had aspired for: “Lower than the lowest” they had imagined, Bierman said. As of May 14, 263 freshmen will arrive on campus this August; the count for recent incoming classes has hovered above 300 students.The incoming class will also be paying an average of one thousand dollars less than the previous class, meaning a large decline in net comprehensive tuition. The amount of current freshmen returning next fall was also lower than the college hoped. 30 to 40 more students than usual will not be re-enrolling, making for a notably low retention rate for the class of 2021, at 79 percent. Healthcare costs for staff and faculty also increased, along with other expenses made when restructuring the budget.
At the meeting, President Bierman emphasized the gravity of the situation the college now faces, but he also attempted to encourage the community: “I get the difficulty of difficult news…[but] we’re in this enterprise together. This enterprise is a great, great thing in so many ways.”
The Board of Trustees was updated on the situation shortly before the rest of the community, Bierman said, but “they don’t have a solution for this.”
Director of Enrollment Rob Mirabile briefly touched on what exactly went wrong with enrollment, but he did not offer much explanation. Enrollment and admissions “can be quite volatile,” Mirabile explained, and the proportion of students who accepted their Beloit College admission for the Class of 2022 was lower than what has been seen historically.
This marks the second year in a row that Beloit enrollment is lower than desired. For now, Mirabile and the admissions team will continue “looking into” why students are finding other colleges more desirable, even if this year’s application rate indicates that interest in the college has not wavered.The college received the second highest total of applications in its history.
Administration will also have to assess why there was a jump in students leaving the college.
Beloit has an ‘exit interview’ process for any student who decides to leave the college before graduating. However, Dean of Students Christina Klawitter noted that the information she and the college receives from the process depends on how much the student is willing to tell her.
Bierman and others suggested, however, that the tense “campus climate” is an ongoing issue they hope to solve. The administrators who lead the meeting did not elaborate on how they chose to define the term “campus climate” when they were prompted by other faculty in the audience.
Former Provost and Dean of the College Ann Davies–who resigned just before the semester ended–wanted to emphasize that Beloit provides “the kind of education…that is capable of ethical and thoughtful action.” She once again shared data collected from student surveys that displayed how Beloit College students recognize Beloit’s strengths. “Our mission gives me confidence in more than one way,” Davies said, and she hoped that the audience could take away three things: that “we are a strong college that puts student experience at the center;” that “our mission matters” and that “our community matters.” Davies concluded, “we will do some great problem solving together.”
While administration hopes the entire community can remain positive, the reality is that the college will see cuts in the coming year or years. At the town hall, Lori Rhead, Vice President for Human Resources and Operations, shared the timeline that administration has been working through.
In September 2017, various committees were formed with senior staff to develop suggested budget cuts. In November of that year, these suggested cuts were brought forth, and community feedback was collected in December. Full Senior Staff reviewed the feedback, and proposed “Phase 1” between January and February of this year. Phase 1 was fully approved by Senior Staff in March and April, and implementation began in April.
This Phase 1 Cost Restructuring was also developed in conjunction with the Academic Strategic Planning Committee, the Fringe Benefits Committee, the Faculty Status and Performance Committee and the Financial Advisory Committee. The plan’s stated purpose was to “decrease expenses or increase revenue.”
In accordance with Phase 1 of the cost restructuring plan, all open positions are now frozen, along with raises. Open positions and vacancies had been frozen earlier in the 2017-2018 school year to observe whether the deficit would increase or decrease and thus, the freeze will continue following the negative outcomes outlined above.
However, individual positions that are being cut would not be spoken about at that meeting, Rhead added. Positions will be eliminated, but Rhead added that administration would be analyzing “how we can approach that strategically.”
Rhead did clarify that positions to be frozen and left vacant would not be “essential positions.” Rhead told the Round Table that “the essential positions are those that help to increase demand for the college, generate revenue, maintain compliance or ensure safety and security of our students, faculty and staff.” She also added that “positions that are funded by grants or gifts will also be filled.” For the 2017-2018 school year, those positions included a financial aid director, admissions staff, a database administrator, security officer, housekeepers and a financial analyst. A search for a vice president for development; a director of government and foundation relations; a costume designer for the school’s theater department; an admissions counselor; and a director for the Powerhouse project, a position which is funded by an endowed gift, will continue next year.
Beloit will also reduce its on-campus utilities budget by temporarily closing the freshman residence hall 609 Emerson for refurbishment; low enrollment for the Class of 2022 will allow the college to do so.
The full changes remain to be seen, and Bierman suggested that the budget deficit has led to the Board of Trustees requesting further oversight to not only solve the budget crisis, but also to answer the question of the decline in short term enrollment.
A student and a faculty member will also be added to the Board, Bierman added; however, how this will be done was not expanded upon at the meeting.
Beloit College chief communications and integrated marketing officer Tim Jones told the Beloit Daily News that a $3 million deficit four years ago “was managed without hurting the college in any significant way.”
Understanding who Beloit College is will continue to be the main mission as the college undertakes this challenge.