Citing increasing economic and demographic pressures, Marquette University’s executive leadership team this week announced places to cut the institution’s overall budget by $31 million over the next six years.
The cuts would be phased in, with about 2.5% or $11 million being cut by July 2025, before the start of the 2025-26 academic year, officials said, with 7% or $20 million being shaved from the university’s operating budget through July 2031.
Marquette’s annual budget was roughly $453.6 million at the close of fiscal year 2022-23, according to its most recent consolidated financial statement. The budget cuts are based, on its projected budget for fiscal year 2024-25, which will begin in July and is expected to be $452 million.
“Although we are in a strong financial position, Marquette – like other universities – is facing increasing economic and demographic pressures. Fewer traditional students are attending college, and those who do attend often need more financial and other support” wrote university leaders, including president Michael Lovell, in a letter to the campus community on Monday. “Marquette relies on enrollment to generate revenue to operate the university – nearly three-quarters of our operating revenue comes from tuition and room and board. The reality is that while tuition sticker prices have risen over the last decade, market-driven increases in financial aid awards to students have resulted in limited growth for overall net tuition revenue relative to rising costs and significant inflation.”
That statement seems to be born out by the institution’s 2022-23 consolidated financial statement, which shows that the overall amount of financial aid received by its students increased from $187.4 million in the 2018-19 school year to $215 million in 2022-23. A sizable portion of that aid, according to the report, has come from the university itself in the form of scholarships, with the institution handing out more than $164.7 million in 2022-23 – an increase of 18.5% over the 2018-19 academic year.
At the same time the private university has handed out more in financial aid, it has also substantially increased its annual tuition by more than 21% in the last seven years. In the 2018-19 academic year, the university’s annual tuition rate was $41,290. This year it is just over $50,000. Room and board rates have also increased in recent years. In 2022-23 room and board at the university was $14,120 a year – an increase of about 14% over the 2018-19 school year.
The university has also seen its enrollment fall by about 5% over the last 10 years. It currently has 11,167 students.
‘Time to Rise’
The budget cut news comes in stark contrast to fundraising boons the university has celebrated in recent years.
Less than two months ago, for instance, Lovell announced that the 142-year-old Jesuit university had raised $767 million during its multi-year “Time to Rise” fundraising campaign, exceeding the goal university leaders set roughly eight years ago for the effort.
Launched privately in 2016, and publicly announced in August 2021, the campaign set out to raise $750 million for the campus’s “Beyond Boundaries” strategic plan, which aims to raise funds for enriching and expanding student opportunities, supporting teacher-scholars, fostering university-wide innovation, and transforming the campus environment. Projects supported by the campaign have included, O’Brien Hall, the $60 million College of Business Administration facility completed in January 2023.
In their letter this week, university leaders wrote that they plan to reinvest 40% or $12.4 million of the $31 million it plans to cut from other – as yet unnamed – areas of its budget into its funding priorities set in that “Beyond Boundaries” plan.
“We believe Marquette will be best served by reallocating resources to invest strategically in what we do best, as outlined in our Marquette 2031 strategic plan, which charts a bold course as we approach our 150th anniversary. This means we will need to consider our program offerings, our physical and organizational structures, and the way we do our work,” the letter adds. “This inclusive discernment process will be called Marquette 2031: Securing Our Future. The executive leadership team (president, provost, and executive vice president/COO) has asked Dr. Jill Guttormson, dean of the College of Nursing, and Ralph Weber, acting general counsel, to lead this multi-year effort.”
Budget cut process
The process for determine budget cuts and priorities will kick off this year, according to the letter, with a steering committee tasked with “gathering input on actions to reduce and reallocate expenses and increase revenue.”
That committee would then develop recommendations to be presented to Marquette’s board of trustees.
Implementation of the cuts would then begin sometime next spring or summer. Some cuts will require a multi-year, phased approach, the letter states.
“Change is never easy, but we are confident that if we work collaboratively in a spirit of shared governance and mutual grace, we will emerge from this process a stronger university for the long term,” the university leaders add. “Even if you are frustrated or uncertain, we ask that you join us in the process of charting our path forward.”
