Wittenberg new student enrollment down, but cash flow improving


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By The Numbers

5.3 percent: Decrease in first-year student at Wittenberg this fall

1,800: Total enrollment at Wittenberg this fall semester

1,900: Total enrollment at Wittenberg in fall of 2014

$4.5 million: Amount of budget cuts originally needed by 2017

Wittenberg University new student enrollment has declined by 5.3 percent since last year, a drop university officials predicted.

University officials announced this week there were 550 first-year students who began the new school year at the university last week, down from 581 at the start of the fall semester of last school year and short of its goal of 576 students.

“Since the fall of 2014, our campus leadership has predicted that we would likely be 30-40 students short of this goal if we held our tuition discount rate steady, which has, in fact, taken place,” said Wendy Kobler, interim vice president for advancement.

The decline in enrollment was no surprise and does not concern the university, which has seen stronger revenues from tuition and fees as officials work to close a five-year, $10 million budget shortfall.

“We continue to make significant progress on the financial front,” Kobler said. “For example, at the end of (fiscal year 2015) we posted the best operating performance in the past decade.

“Further, we have reduced our drawdown from the endowment and have covered principal payments as well as funded capital projects with cash from operations,” she continued. “Despite these accomplishments, our financial sustainability efforts are still a work in progress.”

In 2013, Wittenberg’s board of directors approved a plan to cut a total of $4.5 million by 2017.

But the reductions have been much steeper.

The university made $5.2 million in cuts from its budget through 2017 by reducing expenses and faculty and staff members, university officials said previously.

A total of 29 faculty positions were eliminated — most of the positions were vacant and two tenured professors are retiring, officials have said.

The university also eliminated 13 non-faculty positions. Half of those positions were through retirements and the other half were layoffs or a reduction in force.

“In 2012, the university faced a minimum structural deficit of $7 million. Over time, it has become clear that this number was likely closer to $10 million,” Kobler said. “During the past year, the leadership team has engaged in multiple efforts to generate additional revenue while continuing to contain costs.”

She said Wittenberg has improved its financial stability and reduced debt and expects to reach its tuition and fee revenue goal.

Kobler added that the university’s strategy has been to focus on diversifying academic programs and markets within a five-year financial sustainability plan.

Moody’s Investors Service in June affirmed Wittenberg’s B1 rating on $32.6 million of rated debt issued through the Ohio Higher Educational Facility Commission, but the outlook for the university remained negative.

“Affirmation of Wittenberg’s B1 rating favorably incorporates improved cash flow sufficient to cover annual debt service in (fiscal year) 2015, earlier than the university’s original projections,” according to Moody’s report.

“This follows aggressive board and leadership efforts to stabilize operations and liquidity, with a commitment to take actions to balance the operating budget by (fiscal year) 2017. Gift revenues remain strong for the rating category, providing important budgetary support,” the report said.

The report also outlined ongoing challenges for the university, such as competition for students and weak revenue trends with “very high discounting” to draw students.

The report also noted the university’s under $52 million of operating revenues, which it said provides less flexibility to continue to adjust expenses over multiple years.

Moody’s report also said that the university’s negative outlook reflects improving but still weak performance in the near-term as it looks to produce stronger cash flow through expense adjustments.

“Inability to sustain enrollment or adjust the budget for a constrained revenue growth environment could result in additional rating pressure, particularly given the university’s more limited liquidity profile,” the report said.

But Kobler said officials are not concerned about the drop in enrollment. Instead, they are pleased with the quality and diversity of the incoming class of students as well as revenues.

“We have recognized for the past three years that creating a sustainable financial model will depend upon a number of strategic decisions such as diversifying our programs and markets,” Kobler said.

She said the class of 2019 comes from 34 states and 12 countries outside of the U.S.

In addition, the incoming class has a 3.5 out of 4.0 average high school grade point average, Kobler said.

Wittenberg’s retention for first-to-second year students has averaged 78 percent and current total enrollment is approximately 1,800, down from just more than 1,900 last year, she said.

Kobler noted the university’s Nursing Pathways Program, which partners with Clark State Community College, allows nursing students to get both their Associate’s and Bachelor’s degrees in four years.

Other programs include a new major in Sports Management and a new Master’s program in Business Analytics, called Exercise Science.

“Wittenberg has not raised tuition in three years and we are exploring a number of new shared service agreements with other organizations to help further contain costs and keep our highly-rated Wittenberg education affordable for students and families,” Kobler said.

Karen Hunt, director of admissions, has said all Ohio colleges and universities have struggled with enrollment in recent years.

“Demographic shifts remain a big part of the issue for independent colleges and universities, especially in the Midwest. Wittenberg remains focused on reaching out to students in diverse markets, offering quality, high-demand academic programs, and working to contain costs to address affordability concerns,” Kobler said.

“We are also committed to educating the public and the media about the value of independent education in the state,” she continued. “For example, independent colleges and universities, like Wittenberg, offer significant financial aid and typically boast higher retention and completion rates than many of our larger peers.”

C. Todd Jones, president and general counsel of the Association of Independent Colleges and Universities of Ohio, said there has been a decline in enrollment in Ohio in private and independent colleges every year in the last three years.

In the public four-year colleges, there was less than a tenth of one percent increase last year. But they too have seen declines in the last couple of years.

“That’s a trend that is reflective of much of the Midwest and it’s demographically driven,” Jones said. “The state of Ohio has seen declines in the number of high school graduates every year since 2010. This is a decline that will continue until about 2017 and will pick up again and then will start dropping again through 2027.”

The trend is affecting Ohio and Midwestern states and has hit Michigan much worse, he said.

Traditional-aged college students are a much smaller pool than they used to be, Jones added.

He said to survive, schools are seeking international students, non-traditional-aged students, using of athletics, creating new programs that fill a need in a particular geographic area, such as a pharmacy program, and using collaborations with other schools.

“It will be a combination of factors that doesn’t necessarily point to closure for high ed institutions,” Jones said. “Adaptation (is the key), some colleges will focus on being a smaller institution … some will partner together, some will reduce costs and align their cost structure.

“But this is a demographic change that all colleges have been aware of for a number of years.”

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