“We’ve navigated a path through the woods, but we are not out of the woods yet,” Martha K. Hirst, senior vice president, chief financial officer, and treasurer, told more than 300 members of the University community over Zoom.
No Employee Furloughs or Layoffs
At the beginning of the pandemic, Fordham quickly pivoted from its original plans for the 2021 fiscal year and explored more than 15 possible scenarios based on two critical factors—loss of revenue from enrollment and on-campus student housing. The University ultimately managed more than $100 million in revenue loss and expense reductions through a series of budget actions, including a hiring and salary freeze and a temporary suspension of retirement match contributions for employees, said Hirst. But Fordham did not lay off or furlough a single employee, she added.
With two months left before the end of this fiscal year, Hirst and the finance team have closely monitored the difference in revenue and expenses between the budget adopted at the beginning of the pandemic and the current situation. Several factors, including higher-than-budgeted undergraduate and graduate enrollments, will generate $14 million more in revenue than budgeted. Although Fordham incurred $10.1 million more than anticipated in expenses, including student financial aid and COVID-19 operating costs, and will incur unplanned expenses for events like in-person graduation ceremonies over the next two months, the University’s likely $4 million operating margin is still “remarkable,” said Hirst.
“I know it’s remarkable because I talk to fellow CFOs at other institutions and the rating agency teams who are rating our bonds,” Hirst said. “We are an unusual institution in having managed through as well as we did.”
A 2022 Freeze on Undergraduate Tuition Rate and Increased Student Financial Aid
The operating budget for the upcoming fiscal year, which begins on July 1, is expected to benefit all members of the Fordham community. Benefits for Fordham students include two free summer courses for qualifying undergraduates; a freeze on the undergraduate tuition rate; federal stimulus funds to alleviate economic hardship; increased state aid to student recipients of TAP, HEOP, STEP, and CSTEP grants; and enhanced online programs for graduate and professional school students. For faculty and staff, benefits include the resumption of the retirement plan contribution match in April—three months earlier than originally anticipated—and, likely, modest salary increases.
To help students with affordability, there will be no undergraduate tuition rate increase across three undergraduate schools: Fordham College at Rose Hill, Fordham College at Lincoln Center, and the Gabelli School of Business. Some graduate schools—the Gabelli School of Business, the Graduate School of Education, and the School of Law—will have modest percentage increases, ranging from 2 to 3%, due to their unique needs and markets, said Hirst.
The upcoming budget will also provide approximately $11 million more in student financial aid than this year, said Hirst. This fiscal year, Fordham provided $247 million in financial aid; next year’s budget includes $259 million. It is also expected to aid diversity, equity, and inclusion initiatives, said Hirst.
“The most important way this budget invests in diversity, equity, and inclusion is in the financial aid budget: to be able to attract students of color to Fordham and recognize financial needs,” Hirst said. “While incoming first-year student deposit activity is strong, our enrollment team will be able to tell us more through the early summer as enrollments finalize. But the early picture suggests that the efforts that that team has made in attracting more students of color—particularly Black and brown students—are significant.”
These positive projections are attributed to an expected boost in revenue from student housing and food services of about $35 million in the upcoming year from students who are choosing to attend the University full time and in person, said Nicholas Milowski, vice president for finance and assistant treasurer. In addition, a significant infusion of federal funds will provide financial resources to augment student financial assistance, as well as manage the costs of maintaining a safe and healthy environment for the campus community and surrounding neighborhoods.
‘Good News’ in a Challenging Year
Hirst and Milowski stressed that nothing is certain in the pandemic, even as the percentage of Fordham community vaccinations grows. There are several key milestones in the upcoming fiscal year, including the fall and spring student censuses, which provide student enrollment numbers and the final numbers for student tuition and housing bills. But there is reason for optimism, said Milowski.
“We have seen some good news,” he said, “and we are happy about the prospects for this upcoming academic year.”
The finance team’s five-year forecast from 2022 to 2026 predicts that overall financial recovery will take some time. There will be several challenges ahead, including international travel limitations and community vaccination coverage. It is also likely that, with the continued momentum around diversity initiatives, student financial aid, and other initiatives, expenses are expected to increase at a faster pace than revenue over the next five years. In addition to recovery, it is critical that Fordham focuses equally on continual innovation and advancement in ways that will drive revenue growth and advance strategic initiatives, said Milowski.
The University’s ability to manage the pandemic’s extraordinary fiscal challenges demonstrates that it is capable of making a full recovery, said the finance team. But they emphasized that the pandemic is constantly evolving, and it is important to stay versatile and prepared for any situation, positive or negative.
“As we end the current fiscal year and begin a new one, we will proceed with care and a spirit of renewal,” Hirst said, adding that there will be another budget forum this fall. “We are excited to welcome back our students, to collaborate with colleagues across the University, and to explore new initiatives while exercising the same fiscal discipline that successfully brought Fordham through one of the most challenging years in its history.”
The full recording of the spring 2021 budget forum is below: