University releases budget report for 2023-24 fiscal year with $30M projected shortfall
$1.74 billion budget approved by the Board of Trustees
American University’s budget report for the 2023-24 fiscal year projected a $30 million shortfall for the year amid rising tuition costs.
The report, which was released in August, comes from President Sylvia Burwell and Chief Financial Officer Bronté Burleigh-Jones. According to the report, the Board of Trustees approved an operating budget of $1.74 billion for fiscal years 2023 and 2024.
The budget focuses on factors such as increases in financial aid offerings, progress on academic programs, priorities for AU’s plan for Inclusive Excellence and “reimagined campus operations based on the lessons learned from the pandemic.”
The coronavirus pandemic resulted in a $100 million revenue loss, according to the budget report. Students received a 10 percent tuition discount in 2021 due to the University’s remote status, and the Class of 2024 was significantly smaller than expected, all of which went into account as the 2023-24 budget was created.
According to a July email from Burleigh-Jones and Acting Provost Vicky Wilkins, the University is experiencing a $30 million shortfall this year, “due primarily to undergraduate and graduate enrollments coming in lower than our targets.”
The email gave two main financial causes of the shortfall: “$21 million less than budgeted in undergraduate and graduate tuition revenue … and $5 million in additional investments above budget that we decided to make in our people for compensation and student financial aid. The remainder of the shortfall is contingency funding.”
Last year, the Board of Trustees decided to increase tuition for the 2023-24 year by five percent for undergraduate students, three percent for graduate students and three and a half percent for Washington College of Law students. Additionally, residence hall rates increased by three percent for 2023 and four and a half percent for 2024.
Over the next two years, the University plans to invest an additional $32 million in financial aid at the undergraduate and graduate levels, including WCL.
In 2017, the University created “Changemakers for a Changing World,” a seven-year strategic plan from 2019-2025 to improve the school through areas of impact including retention and graduation rates, operational excellence, enhancing the University’s reputation and diversifying and growing revenue. Funding strategies for years four and five were taken into account while making the 2023-24 budget. These apply to academic advising, counseling and support, a financial aid strategy to improve student retention and graduation, student wage increases in compliance with the D.C. minimum wage requirement, residence hall updates and the Change Can’t Wait campaign.
The University’s Staff Union went on strike during fall 2022’s All-American Welcome after months of bargaining for a new contract. The 2023-24 budget includes the largest staff salary increase pool in more than 15 years. The largest overall increase in the entire budget will be invested in compensation for faculty in staff – $76 million – as part of “a focused, multiyear effort on salary equity and retention,” according to the report.
In August, President Burwell announced that the 2023-24 school year would be her last after seven years in the position. The search for a new president, who will help create the budget going forward, is ongoing ahead of myriad renovations on campus, including a new Student Thriving Complex set to be completed in 2026.
This story was edited by Tyler Davis, Jordan Young and Abigail Pritchard. Copy editing done by Isabelle Kravis.