Fordham Dean Predicts ‘Necessity for Tuition Raise’

Fordham’s finance team analyzes the fiscal years of 2021-22 and assembles a plan for 2023 and onward

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MADDIE SANDHOLM

The operating revenue at the end of the fall 2021 semester is above that of the spring semester.

By OLIVIA LEDUC

Fordham’s finance team has its sights set on forecasting a rather “modest” budget for the 2022 fiscal year (FY), a result of the lingering effects of the pandemic on the previous years’ budget. 

The bi-annual budget forum was hosted on Nov. 17 by Martha K. Hirst, senior vice president and chief financial officer and treasurer, and Nicholas Milowski, vice president for finance and assistant treasurer. They explained to over 300 members of the Fordham community how the university managed to craft a budget through the uncertainties of the pandemic and navigated the FY 2022 operating budget and projections, alongside plans for FY 2023. 

Hirst recalled that preparation for the FY 2021 budget began when the pandemic worsened in March of 2020. Fordham promptly designed a budget foreseen as fitting for FY 2021. 

“We are very gratified by how well Fordham did in managing through FY 2021 financially.” Martha Hirst, CFO and treasurer

It was daunting … the uncertainties that existed then rolled out in unanticipated ways throughout the course of the year,” Hirst said. “We are very gratified by how well Fordham did in managing through FY 2021 financially.” 

The “unanticipatedly strong” operating results in revenue of FY 2021 arose from better-than-predicted enrollments, additional housing revenues and the benefit of receiving almost $13 million in federal stimulus funds from Higher Education Emergency Relief Fund (HEERF). 

FY 2021 expenses, reduced to ensure a balanced budget, ended the year off with $7.9 million operating results, an “excellent outcome for us given all that we encountered last year,” Hirst said.

“If we had not received the federal income we had, it would have been a very different picture.” Martha Hirst

“In FY 2021, we had a lot of unpredictability, we budgeted conservatively, and certain circumstances broke in our favor,” Hirst explained. “If we had not received the federal income we had, it would have been a very different picture.”

The operating budget for FY 2022 is mostly supported by the proceeds of the $7.9 million operating margin, remainders of the federal stimulus money earned and other sources deemed “insignificant” in comparison. 

The increase in students has also had an effect on the budget. The bulk of Fordham’s revenue stems from student and tuition fees, and room and board. Fordham welcomed its largest and most ethnically diverse first-year class in the university’s history, credited for a positive boost in revenue. Hirst stated that the university will focus on prioritizing the maintenance of this first-year class size to continue revenues from student and tuition fees.

Student leaders have been affected by the fluctuation in the budget this fiscal year, especially regarding the increase in enrollment. Treasurer of United Student Government (USG) and Chair of the Student Activities Budget Committee (SABC), Cort McElroy, Fordham College at Lincoln Center ’24, noted that SABC’s budget is based on student enrollment. Consequently, the largest first-year class in Fordham’s history prompts the highest SABC budget. McElroy explained that the increase in enrollment has also resulted in growth for event expenses, costing SABC more this year.

Hirst described the operating and forecast budget of FY 2022 as a balanced budget at the “modest” level. Salary and fringe benefits are higher due to contingent faculty assistance of additional students, which translated to over 100 new course sections offered across the university to accommodate for the rise in student population. 

“The budget is … at a (more) modest level of expenditures than several years ago because we are working our way back from the pandemic; we still have a lot of unknowns and we are not back to normal yet,” Hirst said. 

“We want our financial priorities and decisions to help support the implementation of our Strategic Plan.” Martha Hirst

Without federal stimulus funds, Fordham would have raised tuition costs for the 2021-22 academic year and “faced a downfall of $10 million,” Milowski said. No stimulus funds are expected for the upcoming fiscal year, so the Fordham finance team must reestablish different sources of revenue or expense refinements moving forward in planning for FY 2023, he said.

Planning for FY 2023 and beyond has already begun, Hirst stated. 

We want our financial priorities and decisions to help support the implementation of our Strategic Plan … some of those initiatives require work that we need to plan for,” Hirst said.

Fordham is currently working toward restoring travel expenses as it is “critical to the mission of the university,” although it may take a while for expenditures to return to pre-pandemic levels, Hirst explained.

It is predicted that there will be a necessity for a tuition raise in the coming year, but students will continue to be supported with financial aid.

Hirst also acknowledged that the university is monitoring inflation rates, which have been on the rise in recent years and could potentially affect the university’s expenses.  

Plans to construct the new campus center at Fordham College at Rose Hill will result in more operating budget expenses, with “no direct new revenue to subsidize them,” Hirst reported.

As federal stimulus funds will likely not be available for FY 2023, it is predicted that there will be a necessity for a tuition raise in the coming year, but students will continue to be supported with financial aid, Hirst assured. 

“The lack of stimulus funding moving forward and the inflationary cycle the economy finds itself in” are key factors in outlining for FY 2023, she explained.

The next budget forum will be held in the spring semester of 2022.