‘Challenging days remain ahead’: DePaul approves budget for next two fiscal years

After a financially turbulent year due to the Covid-19 pandemic, DePaul’s budget for the next two fiscal years have been approved — and big cuts are coming. 

According to a Newsline post by President A. Gabriel Esteban, Provost Salma Ghanem and Executive Vice President Sherri Sidler published May 13, the university aims to cut $13 million in expenses during the 2022 fiscal year. While the university claims workforce reductions will occur “only as a last resort,” $3 million of that figure will come from a “planned reduction in force amount,” according to the budget memorandum. That reduction will come from filled and unfilled positions, according to Newsline.

“Universities across the country are grappling with the same challenges DePaul is facing,” the post reads. “That fact does not make this news any easier to share.”

In addition to cuts, tuition will be raised for most students by 2 percent each of the two fiscal years. The university is projected to make roughly an additional $11 million in 2022 and $13 million in 2023 with these increases, according to the proposed operating budget. 

DePaul expects that fewer students will enroll or continue enrollment at the university in fall 2021 and 2022, according to the budget memorandum. The enrollment budget for those years are 21,657 and 21,991 students, respectively — a slight decline from fall 2020’s enrollment of 22,041 students. 

“The enrollment projections are influenced by increased competition and declining numbers of college-going students,” the Newsline post reads. “Record-breaking new first-year student enrollment has been offset by declines in continuing undergraduate and transfer enrollments. Challenging days remain ahead.”

The university’s operating margin — a measurement of profitability — took a hit in 2021, dropping to -3.1 percent from 2020’s 2.9 percent, according to rolling financial results. It’s the lowest operating margin on record since at least 2014. 

With cuts and revenue increases, DePaul projects its operating margin could reach 1.9 percent in 2022 and 2 percent in 2023. 

But it’s not all bad news. 

The budget for institutional financial aid will increase by 4 percent in 2022 to $274.5 million and 3 more percent in 2023 to $282.6 million — a decision made to “honor commitments to continuing undergraduate students and to support new scholarship strategies for transfer and graduate students,” according to the budget memorandum. 

DePaul’s 403(b) match — a benefit expense which was slashed from 10 to 5 percent to address pandemic finances — will also be partially restored to 7.5 percent in the 2022  fiscal year, increasing benefit expenses by $3.5 million. 

Additionally, if DePaul’s net tuition revenue exceeds the budget target of $444 million by more than $3 million, both full and part-time faculty and staff may receive a one-time payment in 2022. A 2 percent compensation pool for full- and part-time faculty and staff base increases is contingent on whether net tuition revenue meets the university’s 2023 budgeted target, $457 million.

The budget was proposed by DePaul’s Strategic Resource Allocation Committee (SRAC), comprised of the following individuals: Alyssa Isberto, Student Government Association president; Scott Paeth, Faculty Council president; Bamshad Mobasher, faculty representative; Victoria Van Kirk Pride, Staff Council president; Paul Zionts, dean of the School of Education; Guillermo Vasquez de Velasco, dean of the College of Liberal Arts and Social Sciences; Mr. Robert McCormick, vice president for Information Services; Salma Ghanem, provost and co-SRAC chair; and Sherri Sidler, executive vice president, chief financial officer and co-SRAC chair.

“​The DePaul community has shown incredible resolve and commitment to the university’s mission in the face of enrollment declines over the last decade and other financial challenges,” the Newsline article reads. “…Developing the programs and initiatives that will propel DePaul into the future will require collective community work. We are counting on you to help us meet this pivotal moment for our university and our students.”