May 6, 2024
Dear Colleagues,
We write to provide you with an update on the budget and resource planning that has occurred throughout the last several months. We also want to preview fiscal year 2025 (FY 2025) and the conditions related to the ongoing delays of the federal rollout of the new FAFSA process that must factor into our strategies and outcomes.
Administrative and academic leadership continue to work through budget priorities to build strategies that specifically align to our University Goals, including Goal 6A to implement an all-funds, multiyear budget and to reduce the deficit through universitywide efforts to generate revenue, as well as to reallocate and reduce expenses. These actions support our specific objective of reducing the existing $31.8 million deficit by approximately $16 million in FY 2025.
Deficit Mitigation
Multiple avenues for increasing revenue have been evaluated and identified to provide short-term and multiyear growth opportunities. These include our SEM 2.0 retention and reenrollment efforts; expanding our student housing capacity; successfully negotiating larger athletic licensing guarantees; enlarging our community college partnership portfolio; and leveraging opportunities with our facilities, sales and services.
Although the university did advocate for a larger increase for our FY 2025 state appropriation, the 2% increase in appropriations proposed by Gov. Pritzker in February would provide the FY 2025 budget plan $100.6M in operating appropriations, a nearly $2M increase over the current fiscal year. The FY 2025 state of Illinois budget, including this proposed level of appropriation, is not yet final and might not be adopted until later this month or June.
These items are in addition to the modest increase in FY 2025 tuition, fees, and housing and food set in February. This is only our second tuition increase in nine years, and was done with the utmost of sensitivity to maintain our commitment to access and affordability. On a parallel path, the university has also worked with the state to be able to expand our AIM HIGH Huskie Pledge program to broaden the number of students eligible to not pay tuition costs or general fees for their first year at NIU and potentially beyond. Currently, 43.1% of NIU undergraduates do not pay tuition or fees. With the new change in the household income threshold from $75,000 to $100,000 to qualify, that percentage will rise.
FAFSA Delays
As many of you are aware, whether as people who track higher education news or as family members of college-bound or current students, the Department of Education (DOE) has struggled since the fall to rollout and implement its new and simplified FAFSA. The results are repeated delays and technical errors. Normally, our current and admitted students would have had their full aid packages in hand since March to give them the confidence and ability to commit to fall enrollment, to secure housing and to plan for the fall semester. NIU and schools across the nation have only very recently received student data from the DOE, or are still awaiting it, to begin to process student aid. Without this vital information, students do not have the ability to make informed choices about where to go and, frankly, there’s growing concern across all of higher education that students, especially those who are first-generation and/or underserved, will chose to not go at all. We cannot understate the significant and negative implications these challenges are presenting to students, families, colleges and universities.
With these delays and many unknowns, students will need extra support and guidance to start with us in the fall. We are adding events and activities to host students and families on campus. We ask that each employee make every effort to personally encourage new and returning students to not let FAFSA challenges put off their dreams, and to seek help from our teams in Admissions, Financial Aid and Scholarships and Student Financial Advising Services.
FAFSA Financial Implications
Enrollment projection updates are expected over the next several weeks as additional data on student applications, admittances and confirmations are evaluated against the trends of recent admissions cycles, retention and reenrollment success, as well as the impact of lagging FAFSA completion rates and related challenges with financial aid award notifications.
A positive or negative 1% change in our enrollment is associated with a $1.27 million change in anticipated tuition and fee revenues. For reference, tuition and student fees represent 40.8% of projected FY 2024 revenues. Funding derived from services such as student housing and dining, and from entrepreneurial activities of colleges and units such as Outreach, Engagement and Regional Development comprise a significant portion of total university revenues: approximately 33% of projected FY 2024 revenues. Accordingly, the success of actions taken to increase FAFSA completion and to notify students regarding financial aid will have significant revenue implications.
FAFSA Requires Strong Response
The situation demands that we take immediate action. Every effort your team makes now is prudent and will directly benefit our ability to meet goals, effectively manage operations and decrease the potential for negative financial outcomes. Beginning immediately, all units are to:
