Rockhurst University is asking faculty to take on additional classes or accept pay cuts as the independent Kansas City university of fewer than 4,000 students deals with a budget shortfall.
The plan comes after the private university in the heart of Kansas City notified faculty of a quickly growing deficit. The information came in the form of updates from the university’s planning and budgeting committee and during town hall meetings.
In February 2021, Rockhurst said it projected a deficit of around $40,000. By April 2022, a report noted that the deficit was now larger than the $6 million figure given at earlier town hall meetings. Not long afterward, faculty members were told that the figure was closer to $10 million.
In an email to The Beacon, Timothy Linn, Rockhurst’s assistant director of university relations, confirmed that the university shared the $10 million figure with faculty and staff this June. He said the budget forecast had improved but declined to give an updated number or to make anyone available for an interview.
Linn sent a detailed response to The Beacon’s initial inquiry and two shorter follow-up emails in response to requests for an interview and current financial information. He said financial information available on ProPublica’s directory of tax-exempt institutions is the most recent update that can be made public.
The financial issues have frustrated faculty members, who worry they will suffer from a situation that hasn’t been explained to their satisfaction, said SJ Crasnow, an associate professor and department chair of theology and religious studies. Crasnow is a member of the faculty senate.
Lack of transparency “just exacerbates the situation and makes morale even worse, it deteriorates trust,” they said. “There’s a psychological and emotional toll that it takes, especially coming off of COVID and all of the stresses that people in education have felt as a result of that, and all the ways that people feel like they’ve had to work even harder without necessarily additional compensation.”
But experts on university finances say the explanation Rockhurst has provided for the deficit — low enrollment — is a common source of money troubles at private universities, and a situation from which it’s possible to recover.
“You could take out Rockhurst’s name and put in any number of smaller private institutions that are working hard this year to try to figure out how to balance revenue minus expenses linked to the fact that they did not meet their enrollment goals,” said Jim Hundrieser, vice president for consulting and business development at the National Association of College and University Business Officers.
Larry Ladd, a senior consultant for AGB consulting with experience as a financial executive for colleges and universities, said it’s important that the financial setback is temporary.
“Usually in any one year, it’s just an unexpected event,” he said. “If it goes on (for) three or four years and the university hasn’t adjusted its expense base to the lower student base or hasn’t come up with a strategy for restoring the enrollment, that’s a problem.”
Linn, in an email, said the current situation at Rockhurst is short-term. “What we’re experiencing is not a budget emergency,” he wrote. “It is a challenge for us, but we also believe that you cannot cut yourself to prosperity.”
How the Rockhurst University budget issues happened
In the email from Linn and updates sent to faculty, Rockhurst attributed deficits to declining enrollment.
“As a smaller institution, our revenues are sensitive to small changes in enrollment,” Linn wrote. While the 2021 freshman class was larger than expected, the fall 2022 class was smaller than expected, he explained. COVID relief funds, which cushioned the impact of the pandemic, are starting to run out.
For some faculty members, that isn’t a satisfactory answer.
“I’m in conversations where this is coming up quite a bit, people expressing that they have felt that they still haven’t received an explanation that really helps them understand how this happened in such a short period of time in particular,” Crasnow said. “Reasons like reduced enrollment, COVID, don’t really seem to explain the amount of change.”
Crasnow said they would appreciate a deeper dive into the budget details and more accountability about what went wrong, especially as multiple high-level administrators have left the university recently.
Rockhurst’s president is new this academic year and two cabinet positions — the chief financial officer and vice president for enrollment management — are listed as “interim” on the website.
Two higher-education experts told The Beacon that declining enrollment is a plausible explanation for a deficit of this size, even without major missteps from the administration.
“Hardly ever is it the case that it’s misconduct or mistakes,” Ladd said. “…You can always second-guess. Were efforts made to recruit enough students? But usually in any one year, it’s just an unexpected event.”
Hundrieser said most colleges and universities rely on tuition as a major revenue source.
If a university has on-campus housing, “not only do they lose the tuition revenue (when enrollment declines), they also lose the room revenue, and they would be relying on that revenue as well to pay off either debt on residence halls, or to pay operational expenses,” he said.
Rockhurst has three residence halls and several other housing options.
A regional college enrollment trend
Hundrieser said enrollment is especially challenging for small schools in the Midwest because the pool of high school graduates has shrunk, many larger institutions are reporting record enrollment, and a strong economy typically lowers college enrollment.
Rockhurst has been more successful at enrolling students over the past few years than some peer institutions, Linn said.
From 2017 to 2022, Rockhurst’s enrollment grew by about 12%, according to data from Missouri’s Coordinating Board for Higher Education that Linn shared with The Beacon. That’s compared to an overall decline of 17.5% among independent four-year colleges and universities in Missouri, and an overall decline of more than 13% for all institutions in the state.
In the Kansas City area, Avila University saw a 22% decline over the same period, Park University saw a nearly 31% decline, and William Jewell College enrollment declined by nearly 9%.
Ladd said many colleges have increased their focus on recruiting students that have traditionally been underrepresented, including those who qualify for Pell grants — a form of federal aid for families with high financial need.
Rockhurst is among them. A university administrator told The Beacon earlier this year that the university has been striving to increase its support for Pell grant recipients and has been enrolling more students of color.
That’s a compelling strategy for a school like Rockhurst because increasing access for those groups aligns with its mission as a Jesuit, Catholic university and because those students can boost enrollment, Ladd said.
But students who receive Pell grants don’t always bring in as much revenue as more affluent students, he said.
“They can afford to pay less, even with the support of Pell grants,” he said. “So a university has to adjust its expense base to match that lower revenue.”
How Rockhurst University is attempting to resolve financial issues
Linn’s email said that Rockhurst is working to boost enrollment numbers by improving recruitment, retaining current students and adding new sports teams.
“We are trending ahead of projections for our first-time college, transfer, and graduate programs for the fall 2023 semester, and interest in the online accelerated nursing offerings we launched in December 2021 are exceeding expectations,” he wrote.
A late-November email to faculty from Douglas Dunham, the university provost and senior vice president for academic affairs, also noted new academic programs; increases in tuition, room and board rates; and a partnership with online education provider Keypath Education as efforts to increase revenue.
But cuts are also part of the plan.
To reduce the number of part-time faculty, the university is calling on all faculty members to teach one more course than they otherwise would during the 2023-24 school year.
Alternatively, faculty members could opt to take a $3,000 cut to their salary or stipend.
Rockhurst is also awaiting data analysis and recommendations from a consulting firm called the rpk GROUP, expected in 2023.
Crasnow, the faculty member, said they worry that data will be used to provide an “objective” justification for cuts to programs and positions.
How universities bounce back from financial issues
Ladd said successful universities market themselves as unique.
Universities should consider student demand when determining programs, he and Hundrieser added.
“Sometimes universities will just continue their existing programs and try harder to convince students to enroll in them, and other universities adapt their programs specifically to attract students,” Ladd said. “Those are the ones that tend to thrive.”
Health care is one popular field, he said.
Rockhurst has recently poured resources into that area after it announced an end to a partnership with the Research College of Nursing.
In 2019, Rockhurst announced plans to take over Saint Luke’s College of Health Sciences. The university then merged its existing programs with the newly acquired college and renovated Sedgwick Hall to house Saint Luke’s College of Nursing and Health Sciences at Rockhurst University.
Hundrieser said it’s certainly possible for Rockhurst to bounce back from financial difficulties. Most universities have, he said, though he estimated 20 to 30 private nonprofit institutions nationwide have closed or merged with other schools during the past five years.
“It is harder to say today, ‘Oh, this is an easy fix,’” he said. “It’s not an easy fix. There’s a lot of strategic, thoughtful, intentional work that has to be done at the institution level to get to a balanced budget, but it certainly can be done.”
- A 15-year-old’s suicide while in Kansas foster care came amid a shortfall in mental health care November 27, 2023
- Kansas regulators give Evergy a smaller electrical rate hike than it asked for November 21, 2023
- Kansas City Public Schools face grievances from maintenance and cafeteria workers’ union November 21, 2023