DePaul, West Virginia University Latest Institutions To Face Large Budget Deficits

DePaul University and West Virginia University are the latest major universities to reveal they’re facing large budget deficits that will require substantial reductions in programs and personnel. The current deficits are projected to be about $56 million at Depaul and $35 million at West Virginia University.

DePaul University

Late in March, DePaul University administrators projected that the university was facing a $56.5 million budget deficit for the the 2023-24 academic year. That amount was much larger than the estimated $25 million dollar figure that had been circulating among DePaul faculty and staff earlier in the year, according to reporting in The DePaulia, DePaul’s student newspaper.

In December, DePaul University President Robert L. Manuel had indicated that the university would take a number of steps to try to bring its budget in line. Those actions included implementing a hiring slowdown, limiting discretionary spending, consolidating non-academic departments, delaying or deferring maintenance, repair and renovation projects, and spending an additional $4 million from the university’s endowment.

In a March 15 update to the campus, Manuel wrote that the “budget gap requires us to consider cost reductions beyond non-personnel expenses, such as reviewing teaching load/scheduling, eliminating currently vacant positions, and the possibility of launching a Voluntary Separation Incentive Program for the administration and staff. It is our full intention to cover the budget gap through these larger options first before considering staff reductions, which we absolutely hope to avoid.”

Just a few weeks later, on April 4, Manuel revealed that the university’s board of trustees had approved offering the Voluntary Separation Incentive Program. He estimated that out of nearly 1,400 full-time staff and administration, roughly 200 people were eligible for the program.

DePaul, the largest Catholic university in the U.S., is not making the program available to faculty. In fact, according to The DePaulia, six term faculty members (faculty who aren’t on the tenure track) have already been notified that their contracts will not be renewed for next year, and more notifications are expected.

Although final decisions on where the rest of the cuts will be imposed are expected later this month, internal campus communications reported by The DePaulia suggested that more than 60% of the cuts will come from academic affairs.

DePaul faculty are frustrated with what they see as hastiness and a lack of transparency in the budget decision-making so far. “We can’t make decisions like these on a dime,” Marcy Dinius, professor of English at DePaul told The DePaulia. “60% of this budget cut is happening through the very part of the university that is supposed to try to make these kinds of decisions on a much longer timetable, and with much, much greater deliberation, and certainly with much more information than any of us had been given.”

West Virginia University

In March, West Virginia University (WVU) officials reported that the university, which is the state’s land-grant institution, was facing a $35 million budget hole for fiscal year 2024, equal to about 3% of its total budget. But they also predicted that the deficit could grow to as much as $75 million over the next five years, largely because of projected enrollment declines and continuing cost increases.

In an interview with the state’s press, WVU President Gordon Gee said, “We are attacking the issue immediately and vigorously in order to make sure we don’t have a huge problem. … We know fundamentally we’ll have fewer programs and fewer people, but we will have a stronger institution. That is the issue.”

WVU has begun to address the shortfall by restricting travel, hiring and spending, but Gee acknowledged that more cost-cutting steps would be required. “We will invest in our strengths – both in programs and in talent. Every unit will examine their priorities to ensure we are investing wisely. Armed with that data, we also will need to make the difficult decision to stop investing in those things that no longer meet our expectations.”

Like scores of other institutions currently suffering from budget shortfalls, DePaul and WVU pointed to enrollment declines and disruptions from the pandemic as major contributors to their financial woes. At DePaul, enrollment has fallen every year between 2018, when its total headcount was 22,457, to 2022, when it stood at 20,917, an overall 6.8% decrease. WVU has seen a 10% enrollment slide since 2015 and predicts it could see and additional loss of as many as 5,000 students in the coming years.

Regarding the pandemic’s impact, Gee said, “If I give myself fault, I would say I didn’t anticipate how quickly this pandemic could impact everything we were doing.”

College budget shortfalls have been rife since the pandemic, and while the tendency has been to focus on the existential threats they’ve posed to regional public universities, small private institutions, and community colleges, it’s now become clear that large research universities are not immune to significant financial problems. Earlier this year, four Big Ten universities, long among higher education’s most well-resourced and influential public institutions, all reported large budget deficits. It’s a trend likely to continue.