Ahead of the inevitable enrollment cliff and associated financial losses, President Davis’ Resource Optimization Initiative laid out plans to cut low enrollment programs, avoid furloughs, layoffs and benefit cuts as higher education institutions across Arkansas lag behind UCA’s financial and enrollment numbers.
President Davis held a campus forum Thursday, March 17, entitled ROI 2.0, with the goal of providing greater transparency surrounding the ROI initiative and confidence in UCA’s plan for the future.
“We can be very proud of the fact that we started ROI. It explains why we haven’t had to go into those bags of tricks that a lot of universities have had to. They’ve already burned up their bags of tricks,” Davis said.
Public four-year universities have been facing steady enrollment declines, according to data presented by Davis. Arkansas four-year public institutions have experienced -9.5% change in the past five years. Numbers for the fall term headcount fell from 100,413 in 2016 to 90,920.
Credit hours, which Davis believes are a greater marker of financial health, have also fallen. Annual student credit hours produced fell from 308,812 in fiscal year 2016 to 257,136 in fiscal year 2022.
“Headcount is just a number that’s for PR … the reality is, around 15,000 to 16,000 students are enrolled at UCA across the year. Ultimately all of that is toward taking hours in credit-based courses. Headcount is nothing but PR, student credit hours are everything,” Davis said.
Data analyzed by EAB, a consulting firm specializing in education, predicts a 20% or more decline in student enrollment for the state of Arkansas from 2017-2029.
“We’re about halfway there,” Davis said. “It’s all about counting 18-year-olds, five-year-olds, and one-year-olds. That’s all that’s going on in all that math,” Davis said.
“We want to make certain today to have a better understanding about why we probably are in better shape than 90% of colleges and universities, but an understanding that it’s not magic,” Davis said.
Despite falling enrollment numbers, UCA’s share of fall semester freshman cohorts, compared to other four-year public Arkansas universities, increased from 13.2% to 14.2%. This data includes the University of Arkansas at Fayetteville.
Without UofA, UCA’s share of the freshman cohort has increased from 20% in 2016, to 26.6% in 2021.
ROI began three years ago in response to “unpredictable enrollment trends and limited state funding,” according to UCA.edu.
“[ROI] started about 5 years ago with us thinking about how we’re positioning UCA for its future. That future wasn’t just a four- or five-year period, but what we’re going to look like 50 years from now,” Davis said.
Drops in high school graduates and predicted enrollment declines are at the center of the ROI program.
Davis said the university plans to, “develop budgets that are grounded in reality.”
“We’re going to continue to expect limited state funding … and moderate tuition increases,” Davis said. “We’re not going to solve this by raising tuition levels up by an exaggerated amount.”
Davis was met with applause from the audience after reiterating his commitment to avoiding furloughs and layoffs.
“There are so many people that have stopped me over the past two years and there will be questions like, ‘why is the University of Michigan laying off and we’re not?’”
“I can’t help it if they’re not doing the work,” Davis said. “There are a lot of lazy people in leadership positions all around higher education, and there are an awful lot of people who only want to solve this year to year.”
The university plans to continue to avoid benefit cuts and will continue to invest in growing academic programs.
“We cannot starve them to death,” Davis said. “That’s the most short-sighted thing that we can do for positioning the university to where it needs to be 25 years from now.”
“We will not defer maintenance,” Davis said. “That’s one of the tricks that a lot of campuses are doing right now and their shell is falling apart. That’s only going to get worse as we look forward to 10 years from now.”
Deferring maintenance refers to postponing maintenance activities and repairs to save costs.
Davis also stated that the university will be maintaining its budget reserves and will not be relying on pulling from them.
In response to the enrollment cliff, Davis laid out what the University has been doing to keep the budget healthy and maintain the aforementioned goals.
UCA has implemented temporary hiring freezes, reductions in temporary and part-time positions, purchasing controls and contract reductions among other things.
New initiatives of ROI that will likely be implemented in the next five years as part of ROI 2.0 as the enrollment cliff draws nearer are the reorganization of departments and units, streamlining of academic programs, and cutting of low enrollment programs.
“There are things that might be nice to be able to have a concentration in that particular area. But I don’t know that we can afford to do that,” Davis said. “If there’s a position that comes open and we have to make a hard decision because we’ve got growing academic programs … we’re going to have the courage to do that. And when we do that, you can get angry at this face. Period,” Davis said.
“With all the carnage that’s about to come in higher education, we will not be alone. We are going to face significantly harder times within the next four to five years, but we worked hard and got uncommon results,” Davis said.