UWM faces major financial challenges
Last updated on July 15, 2021 at 3:59 p.m.
the University of Wisconsin-Milwaukee lags behind its peers nationwide in revenue and enrollment, creating a worrying financial outlook for the institution, according to a new report.
These challenges could endanger UWM’s “R1” designation – the highest research score assigned by the Carnegie Classification of Higher Education Institutions, which UWM has maintained since 2016 – according to Wisconsin Policy Forum analysis.
“We find that UWM sets itself apart from other urban public universities,” the report says. “When it comes to enrollment as well as state funding and tuition income, almost none of UWM’s peers face such difficult challenges, and together they can threaten its very status as a student. leading R1 research institution. “
The university’s financial dilemma is the confluence of several factors, including a decade of declining enrollment, an 8-year tuition freeze, and delayed public funding – all of which have been exacerbated by the COVID-19 pandemic. , according to the report.
The report, which was commissioned and partially funded by the UWM Foundation, follows a report released by WPF late last year examining how the UW System and UW-Madison in particular are also losing their competitive edge.
Total UWM revenues (excluding federal student aid) have grown 11.7% over the past decade, well below the rate of inflation. With federal financial aid dollars included, its total revenues declined slightly over the decade.
In 2008, state funding and UWM tuition income were roughly equal; today, its tuition fees eclipse government credits. UWM’s total budgeted spending was essentially flat between 2011 and 2021, with the largest impact falling on UWM’s core business (including an 11% decrease in education spending and a 25% decrease in l student financial aid), according to the report.
In 2019, UWM received $ 5,229 in public funding per student, 28% below the average of 15 peer universities and the third lowest in this group. That same year, UWM received $ 14,038 in combined public funding and tuition and fee income, the second lowest of its peers.
Meanwhile, registrations have declined. UWM’s full-time equivalent student enrollment fell 6.4% from 2013 to 2019, compared to its national peers, which saw an average enrollment increase of 3.6% during this period. UWM’s enrollment loss was the fourth largest among its peers.
The report noted that the decline in enrollment is typical for a university in Wisconsin and the Upper Midwest, given demographic trends in declining birth rates and net out-migration, but UWM’s losses are worse. than those of the state and most national peers. The report pointed to the decline in the number of students in the greater Milwaukee area who graduate from high school over the past decade as one explanation for UWM’s decline. The prestige of UW-Madison, by comparison, may have isolated the flagship university (where enrollment has grown 10% over the past decade) from that trend, according to the report.
The report, however, highlights UWM’s important role in the state as the state’s second-largest university after UW-Madison, and third-largest research institution, after UW-Madison and the Medical College of Wisconsin. It also fills a crucial niche in serving those who are underrepresented in higher education, having the highest number of Black, Latino and Southeast Asian students of any UW campus and a broad representation of undergraduates receiving Pell scholarships, according to the report.
Declining UWM enrollment, combined with the state’s tuition freeze, pushed tuition fees from a source of income growth in the 2000s to a slight decline since 2019, according to the report. . It remains to be seen how much tuition fees will increase in the future. The 2021-2023 state budget lifts the freeze, giving this decision-making power to the Council of Regents.
COVID-19 has compounded these challenges. The university recorded nearly $ 92 million in total losses from the pandemic. While the university in turn received $ 95 million in federal pandemic aid, UWM is to spend $ 42 million of that total on emergency grants for students, leaving $ 53 million to the institution. UWM closed most of the gap with $ 32 million in employee leave and cuts in hiring, travel and other expenses, according to the report.
“The pandemic has dealt a heavy blow to the already weakened finances of the UWM and has threatened to cause lasting damage to the institution,” the report said.
The teachers were hit by the financial difficulties. UWM had 100 fewer faculty members in 2020 than in 2010, and the loss would have been greater had it not been for the UWM’s merger with the Washington County and Waukesha campuses, according to the report.
The remuneration of UWM professors is also lower than that of its peers. The average salary at UWM was the second lowest in its peer group. UWM full professors earned an average of $ 105,884 in 2020, the third lowest among its peers.
All of these factors affect UWM as a research institution, according to the report. R&D spending at UWM fell 12% from 2011 to 2019, compared to an average increase of 13.8% in spending among its peers. This drop is due in large part to decreased funding from state, local and federal governments, according to the report.
“Just as UWM’s increased research efforts and its achievement of R1 status have been a benefit to the entire region, the recent decline is one of the most worrying trends for the university and for the Greater Milwaukee region as a whole, as research can develop a regional economy by attracting federal funds and sparking new innovative products and businesses, ”the report said.
The report offers several recommendations to address these challenges, including:
- Increase in state and local funding. With general state fund tax collections through June 2023 expected to be $ 4.4 billion higher than expected, the state could afford to allocate additional funds to the UW system and the UWM, according to the report.
- Increased financial aid to attract new students to UWM. One approach would be to expand a statewide plan such as Bucky’s Tuition Promise, which guarantees enough scholarships and grants to cover four years of tuition and fees for UW-Madison students whose Adjusted gross income per household is $ 60,000 or less, according to the report.
- Build its endowment to pay for student aid and programming for low-income students.
- A “thaw” on tuition fees. For UWM, a 2.5% increase in tuition fees would provide the university with $ 3.2 million in additional income per year, according to the report.
- Better serve students of color, low income and non-traditional students.
But cuts may be needed, the report acknowledges. He put forward several possibilities:
- Consolidate underutilized academic / major programs.
- Cut some schools and colleges. (At 14, UWM is older than most of its peers).
- Cut the Waukesha and Washington County campuses, where enrollment has dropped by about half over the past decade. “If enrollment continues to decline, UWM officials will find it difficult to avoid major cuts to these campuses or even closure,” the report said.
Other universities in the UWM peer group for the study included Cleveland State University, Georgia State University, University of Illinois Chicago, University of Louisville, University of New Orleans , Wayne State University, University of Missouri-Kansas City, Rutgers University-Newark, State University of New York at Buffalo, Akron University main campus, University of Cincinnati main campus, University of Toledo, University of Texas at Dallas, and Temple University.