13 things (and numbers) to know about Gettysburg College’s budget growth, enrollment, tuition and financial aid

John Cadigan and Daniel Konstalid, as representatives of the Faculty Finance Committee and Office of Finance & Administration, respectively, prepared a presentation on the school’s budget for a March 1 faculty meeting, addressing the concerns of a reported lack of growth. President Janet Riggs had some opening remarks before the in-depth presentation on the budget. Here are some of the takeaways (more than 10) from this meeting:

  • There are national issues when it comes to high school graduates enrolling in institutions of higher education across the US, which have been prevalent over the last decade. There has been a shift in demographics — decreasing number of high school graduates — as well as a lack of growth in family income. As a result, a greater portion of this shrinking high school graduate pool is having a harder time affording a college education. A larger majority of this pool are becoming apart of families who sit in lower socioeconomic status groups. This all leads to a higher level of questioning as to the value of a college degree and higher concerns of college debt. Cadigan, Konstalid and President Riggs see this as an issue that colleges will continue to face because there aren’t any signs of improving. Many colleges have announced that enrollment numbers are on the decline. Gettysburg’s enrollment was 2467 (average between fall and spring semesters) in 2008, 2564 in 2013 and 2393 this year. There is an expectation that the college will maintain this average enrollment of between 2370 and 2400 students.
  • There has been a concern over the lack of budget growth as a result of the lack of growth in net tuition revenue. The three main factors are the price of tuition increasing, financial aid awards increasing and enrollment decreasing that has added to the hindering of growth. Cadigan emphasized these three drivers don’t act in isolation; they are all tied together. One part of the solution lies in adding more value to the student and creating more demand for the Gettysburg education. This is a tuition revenue driven college. Growth in tuition revenue has flattened — 59% of the operating budget was net tuition revenue, ten years ago, and is currently at 57%. The last ten years averages 1.9% in annual growth of net tuition and 0.9% over the last five years. “This is not a sense of alarm but a sense of alert,” Konstalid said.
  • “I want to be clear. This isn’t an all doom and gloom scenario. First of all, everyone is dealing with this. If you talk to any college president, everyone is wrestling with these things,” said President Riggs. “We are a highly attractive place for high school students. What did we have 6100 applications this year? We are an incredibly high quality education for those students and our students are doing extraordinarily well when they graduate.”
  • Financial aid has grown over the last several years, due to a desire to offset this increasing cost of tuition for current high school graduates seeking to attend college. In 2008, financial aid awards totaled almost $33 million and currently sits at around $61 million. This increase in the tuition discount rate is common across many other colleges.
  • Endowment plays a small but significant role, President Riggs said. There was the 2008 financial crash, and as a result, the endowment was worth less at this time. Amidst the recovery from 2008, there have been historically low interest rates and limited GDP growth, explaining the flat family incomes and future prospective students not being able to afford a college education. The size of the endowment is increasing because of the college’s gift giving campaign. And this portion of the college’s financial position has improved with this economic recovery. Endowment is 9% of the college’s revenue stream and was evaluated as being worth $336 million in Dec. 2017. There is a $17.1 million annual average of monetary gifts given to the college. The endowment is not currently a huge factor or focus when looking at the college’s recent budgetary crunch.
  • Total personnel cost takes up 61% of the expenditures on the school’s budget (broken down by salary and fringe benefits). Salary expense is currently at 43%. Fringe benefits sit at 18%. Consumables, supplies, travel, etc take up around 15%.
  • As revenue declines, the college’s decisions become more market based. The budget was $99 million, ten years ago, and is currently $129 million today. The budget has grown 30% over ten years (around 2.7% every year).
  • Konstalid projects that there will be similar class sizes, similar overall enrollment, similar tuition increases, similar tuition discount rates for first-years, and fund raising will continue to be pursued aggressively. He also gave the projection that tuition revenue will continue to grow 3% over the next five years, and salaries/fringe benefits continue to grow.
  • “We are much more fortunate than a majority of colleges in the country,” said Konstalid. “There are a lot of [colleges and universities] that would trade places with us readily. By the same token, we are not immune to these changes [in the higher education market].”
  • “I would just like to focus again on salaries, fringe benefits and net tuition revenue. That tells you everything you need to know about where the budget is headed. Our costs are accelerating, our revenues are flat and so it is a challenging environment. We are not looking at this with panic or grave alarm,” said Konstalid.
  • Some examples cited as the college looking to enhance the “attractiveness” of the Gettysburg experience: facilities improvement (CUB), availability of financial aid, new website, career development focus, entrepreneurship and leadership focus, undergrad research, creative activities, diversity and inclusion initiative
  • The average age of people who retired as a part of the retirement incentive program is 78. There has been a focus on creating an alternative second retirement plan as well as a comprehensive review of benefits. Another mentioned side fact is that the financial aid need of international students is decreasing.
  • President Riggs assured the faculty that Gettysburg College is addressing the interests and needs of current and future students.

 

~Message from the author~

This report was put together based on information presented at the March 1 faculty meeting, after going over meeting notes for multiple hours. There was a second presentation given at the following faculty meeting as a “sequel” to this one. No member of GNN attended this meeting, so I apologize in advance if there was information presented at this following meeting that contradicts or denies any of the information presented here. Please reach out to me at miloan01@gettysburg.edu if there is any information presented here that is no longer accurate. Thank you. – Andy Milone
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