Decreased enrollment causes revenue loss, salary cuts
Because of COVID-19, Augustana experienced a near nine percent drop in total enrollment this fall from last fall, causing a $1.5 million to $2 million financial impact on the $50 million operating budget, according to Chief Financial Officer Shannan Nelson.
Director of undergraduate enrollment Madeleine Ellis said that this year the total undergraduate enrollment is 1,667 compared to the five-year average of 1,727.
Ellis said first-year student enrollment went from 430 students last fall to 323 this fall.
“It’s definitely been a different recruitment process for us just with the complications of COVID, the impact that had on students’ ability to visit campus, the economic complications and how families’ decision making has been altered by that,” Ellis said.
Despite the drop in total enrollment, Nelson said the university is making up for it with various changes with faculty and staff and an 11 percent reduction to operating costs.
“Operationally, I don’t know that we’ve really had to stop doing anything that we normally do,” Nelson said. “We’ve had to do some new things with cleaning and technology, but again, we’ve budgeted for those for this fall. The grants that we’ve received will also offset those dollars.”
In addition to recieving over $600,000 in federal grants from the CARES Act, Nelson says that the university has instigated an early retirement plan, attrition and salary cuts to make up the revenue loss.
“Last spring, we were considering furloughs, which we didn’t end up doing,” he said. “I didn’t like how that was going to impact faculty and staff. So, the plan that we’re taking is that we’re doing the early retirements.”
Vacancies in faculty positions created through early retirements and position eliminations have been filled, while most of the staff positions are on hold to be filled at a later date, according to Nelson.
For salary reductions, there is a five-tier system. There will be a 1% salary reduction for those making less than $30,000 annually, a 4% reduction for those making between $30,000 and $60,000 annually, a 5% reduction for those making between $60,000 and $100,000, a 6% reduction for those making over $100,000 and a 12% salary reduction for those making over $200,000.
With all of those efforts to save money, Nelson said he expects the university to save about $4 million over the next two years.
Augustana will also be able to cut costs because the pandemic doesn’t allow for travel.
“We know there’s going to be some savings out of the pandemic with items that we just can’t do,” Nelson said. “Think about this fall with athletic teams not being able to travel.”
Along with sports teams, faculty and staff won’t be traveling this fall either.
Back in spring 2020, the university delved into the endowment fund to offset student costs. Nelson says that a board-approved loan helped get through that as well.
“[The endowment] pretty much has rebounded,” said Nelson.
And during this process with this semester’s finances, he said that the endownment has not been touched.
As far as Vision 2030 and the approved strategic plan, Nelson says the investments and initiatives have not changed.
“The creation of the new schools, our commitment to those investments, we’ve made sure those have stayed whole,” he said. “The new programs that we’re going to be adding to campus, those are still going to be identified as fully funded programs.”
