Universities and colleges in Illinois and across the nation are confronting financial challenges stemming from declining enrollments, rising costs, increased competition and, in the case of public universities, decreases in state support. We are not alone in navigating financial hardship and complexities, and we must make lasting, meaningful changes to achieve financial stability.
Achieving a sustainable, balanced budget requires that we simultaneously grow the university’s revenue streams while reducing our expenditures in this fiscal year and beyond.
Revenue Generation
In FY24, NIU initiated multiple actions to maximize existing revenue streams and create new opportunities. First and foremost, the university is actively leveraging our strategic enrollment plan to drive recruitment, retention and re-enrollment. Additional examples include maximizing our student housing capacity; enlarging our community college partnership portfolio; leveraging licensing, sales and services; and fundraising.
Where possible, the university is also working to identify strategic opportunities that simultaneously create revenue and reduce costs. One effective way the university is doing this is through the continuous assessment of our physical footprint. Recently, the university sold non-essential real estate (including a building in Hoffman Estates and the former nursing building at 1240 Normal Road) that no longer aligns with our needs, priorities and future plans. By strategically reducing our non-essential holdings, we have the potential to earn revenue from their one-time sales and then reduce operational costs for the long term.
One additional tactic the university can implement is adjusting tuition, fees and room and board. Our commitment to access and affordability is unwavering, so actions such as this have been infrequent and data-informed. The university has increased tuition and room and board fees twice in the past nine years, including FY24. Student fees have only increased once in the past nine years with decreases in seven of the past nine years. Revenue from tuition changes is realized over a period of four years due to the Truth in Tuition policy in Illinois which limits tuition increases to incoming students only. From FY19 to FY24, NIU had the smallest percentage tuition and fees increase (0.60%) compared to any of the twelve Illinois public institutions. As we explore this opportunity, we will continue to keep students at the center of this conversation, ensuring we remain accessible for all students.
Expense Reduction
Cost-cutting can involve making adjustments in spending priorities; finding efficiencies; and eliminating non-essentials. Reductions and cuts must be done strategically instead of unilaterally, or via a one-size-fits-all approach. Strategic cost reduction actions that have been taken, are ongoing or are currently in development include reducing low-enrollment classes; reducing reliance on extra help positions and non-essential overtime for employees; and a long-term energy savings program through a partnership with Trane.
One key area where all employees can help deliver on reducing costs is by differentiating needs from wants, and acting only on the former.
University leadership continues to work across campus to build on these existing efforts and will provide updates as appropriate.