Raises for faculty and staff are in the forecast as Ohio University’s financial position improves

Posted on:

< < Back to

ATHENS, Ohio (WOUB) — Ohio University’s financial picture is improving, driven by more students, fewer employees and a big helping of federal stimulus funds.

Faculty and staff will see something this year they haven’t seen in a while as a result: a pay raise, coming with the start of the new fiscal year in July.

The university still faces an ongoing structural deficit, but President Hugh Sherman told the board of trustees at its meeting Friday it was becoming more manageable. He said the latest round of voluntary buyouts combined with operational savings from more centralized university services should help close the gap between revenue and expenses.

This is a much different picture than the board has grown accustomed to seeing at its quarterly meetings.

When the COVID-19 pandemic hit in early 2020, the university’s enrollment — its chief source of revenue — was already several years into a steady decline. Budget projections showed massive deficits for years if something wasn’t done to either cut costs, grow enrollment or a combination of both.

The pandemic compounded the university’s woes, with campus shutdowns resulting in huge losses in room and board revenue and further declines in enrollment. Plus, there were millions of dollars in new expenses for cleaning and testing and other measures taken to protect students and employees from the virus.

The two big federal stimulus packages, one under President Trump and one under President Biden, have helped offset these costs, and then some.

The university expects to end this fiscal year in June with a $36.3 million surplus, due in large part to an additional $25.6 million in pandemic relief funds. This, however, will likely be the end of it.

Another financial boost came from an enrollment gain. Fall semester brought 538 more first-time freshmen students than the year before, back when the university was still locked down and classes were online. These additional students translate into millions of dollars in revenue.

Enrollment is now back to where it was before the pandemic, although still well below where it was just a few years ago.

But the university is having to work harder to get these students. The percentage of admitted students who decide to enroll at the university, known as the yield, has declined significantly over the past several years.

One strategy the university is using to increase its yield is making more offers of admission earlier, giving more time to actively court these potential students. This is part of a more “high-touch” marketing and recruiting strategy the university is deploying to attract and recruit students.

Looking ahead to fall, enrollments so far are pretty much on track with where they were this time last year. The university is seeing more applications from Ohio residents relative to students who live elsewhere. Competition for out-of-state students, who pay much higher tuition, is becoming much stiffer.

Also helping out the bottom line this year is millions of dollars in savings from hundreds of vacant positions on campus. Some of these positions have gone unfilled to save money. Others remain open because just like employers nationwide, the university is struggling to find applicants.

As it fills positions, the university will keep an eye on which areas on campus are showing the most promise. For example, Sherman told the board the university is moving to “rebalance faculty into areas where there is high demand from students.”

Right now the biggest demand by far is in majors related to health care, which he said accounts for about 30 percent of the student body.