Piling up: The University of Akron’s new ‘financial problem’ could be $20.5M and climbing
by Chris Horne
There’s good news and bad news. The good news is that University of Akron students will soon get a refund on certain student fees. The bad news is that it means the university’s budget will, according to a press release, take up to a $4.1 million hit.
The worst news is that it’s just the tip of the iceberg.
For the last three years, freshmen enrollment at the university has been on the upswing. After losing about 400 students a year through 2013, the Board of Trustees approved a $519,383 annual contract for Royall & Company to help increase applications and improve marketing efforts. The move paid off as they helped stop the bleeding with the incoming class of 2014, losing only 46 students compared to the previous year. The return was even better last fall as freshmen enrollment increased slightly over the previous year.
It does not appear that this will be the case for Fall 2016. Reports from January 13, 2016 and February 24, 2016, show that applications and the number of admitted students are up over the 2014 numbers but the number of confirmations — students who have paid a fee to reserve their spot — are down dramatically over the previous two years: 22.2 percent lower than the same point in 2014 and 34.5 percent lower than the same point in 2015, according to the February 24 report.
In short, if that trend holds, it means the university will have almost 1400 fewer freshmen enrolled than the previous fall semesters. That would cost the cash-strapped university up to $16.6 million, based on these estimates. It does not include estimates based on the declining retention figures, nor does it include the drop in donations to the university foundation.
How we arrived at the projected $16.6 million drop:
As of February 24, a total of 1,083 potential students had confirmed their admission for Fall 2016. That’s down 34.5 percent from the same point last year when 1,654 were confirmed. If you apply the 34.5 percent drop from 2015’s total of 5,094 confirmations, then you get 3,337 confirmations for 2016. Figure the same 81.83 percent actually enrolling for a total of 2,731 new freshmen in Fall 2016. That would be 1,387 fewer enrolled students than in 2015. Using the estimate given at the latest Faculty Senate meeting by interim provost Rex Ramsier, who said each student is worth about $12,000 a year, you get $16,644,000 on the high side.
However, coupled with the facilities fee hike refund (see below), which follows the administration’s rebuffed attempt last July to increase tuition by 12 percent for upperclassmen, sources fear the “mismanagement” that has caused this new budget crunch will lead to another round of layoffs and budget cuts this summer.
Jeff Robinson, Director of Communications for the Ohio Department of Higher Education, says the errant fee increase was discovered in an annual tuition and fee review.
Check back for updates on this story as they become available.
***an earlier version of this story incorrectly estimated the cost at $20M to $24M if the university’s projections for Fall 2016 freshman enrollment follows the confirmed student figures’ current trend.***