Altogether, Miami will reduce spending on the administration by 7.5 percent and by 10 percent in funding for athletics. The school will also reallocate 5 percent of academic funds to “high-impact programs.”
With the $17.3 million, Miami plans to spend more on faculty and staff while increasing need- and merit-based student financial aid, and will invest in academic initiatives to be described in a 2020 strategic plan, according to a letter to students from president Gregory Crawford.
Miami’s moves come as colleges see financial issues on the horizon, largely stemming from expected declines in enrollment. Those drops will be fueled by an anticipated decrease of more than 13,000 Ohio high school grads by 2031, according to the Western Interstate Commission for Higher Education.
“It’s just the environment we operate in today,” Creamer said. “I think institutions that plan and prepare for these issues manage them better.”
From fiscal year 2012 to fiscal year 2017, the University of Toledo saw a 10 percent enrollment decline, Youngstown State University had a 12 percent decline and the University of Akron had a 22 percent decrease, according to the Ohio Department of Higher Education.
While Miami’s enrollment hasn’t seen a dramatic decline yet, Wright State University just 52 miles northeast in Fairborn has already experienced decreases. Wright State swallowed a 13 percent decrease in full-time enrollment from FY 2012 to FY 2017.
The number of students enrolled at Wright State was projected to be around 16,224 last fall, nearly 3,550 below the school’s peak in 2010 when a transition from quarters to semesters started taking place, according to a fiscal year 2019 budget. Tuition is often the largest single source of revenue for colleges, meaning declines in enrollment translate to less funding.
The enrollment problems and years of overspending contributed to financial problems at WSU. Wright State was forced to reduce spending by around $53 million in fiscal yer 2018 in an attempt to rebuild its drained reserve fund and right-size its budget.
Unlike Wright State, Miami is not reducing spending but is moving money around to better position itself for the future, Creamer said. But, WSU is one of several colleges facing leaner fiscal times as they experienced a decline in customers, heightened competition and slashes to state and federal funding.
Wilberforce University — the nation’s first private historically black college — was placed on probation last year by a regional accreditation agency for running a deficit of more than $19 million in fiscal year 2017. Wilberforce has also previously struggled with enrollment issues.
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Central State University, another historically black institution, was removed from state fiscal watch almost two years ago after suffering a 15 percent decline in enrollment from 2013 to 2015. Nearby Antioch College briefly closed its doors in 2009 due to years of enrollment declines and revenue shortfalls.
The demand for a college degree has softened, and it could precipitate a closure of around 500 schools in the United States over the next several years, Richard Vedder, an Ohio University economist and director of the Center for College Affordability has said.
Though some older colleges are starting to face budget issues, Vedder has said that younger institutions may face financial strains first since they haven’t been around as long and often have smaller donor bases.
“All of them are in trouble. None of them are vibrant, blooming schools at the moment,” Vedder said.
The U.S. Department of Education lists 526 schools nationwide that they have determined to be “financially troubled.” As of the end of 2018, there were 22 Ohio institutions on the list including Wilberforce University.
Ohio State University, the University of Dayton and Miami were all founded in the 1800s and their longevity, Vedder said, has helped them avoid many deep budget issues in the past though that may not be the case going forward.
“Miami University has thrived for generations because of our ability to adapt—to find new paths to excellence in a world that is always changing. The current higher education landscape presents its own set of challenges for all universities, including reduced enrollments and budgetary constraints,” Crawford said. “Miami is not immune to these forces.”
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By the numbers
$17.3 million: Amount Miami University will reallocate in budget.
526: Total schools the U.S. Department of Education deems "financially troubled."
$53 million: Amount Wright State reduced spending by in FY 2018.
22: Total Ohio institutions the federal government is monitoring for financial reasons.
$19 million: Deficit run by Wilberforce University in FY 2017.