Reducing the Deficit, Creating Savings, Amid Enrollment Challenges
In October, Ithaca College partnered with the Huron Consulting Group to conduct a comprehensive budget and resource planning study aimed at addressing declining enrollment and a growing budget deficit. The study is expected to inform the Fiscal Year 2026 budget, due in May 2025. While some faculty and staff are concerned that the study may lead to job cuts, President La Jerne Cornish emphasized that the initiative is not solely focused on cost reduction, stating, “the college cannot cut its way to success.”
Deficit and Enrollment Challenges
Ithaca College has faced a budget deficit for three consecutive years due to a mismatch between its expense base and enrollment-driven revenue. Historically, the college enrolled 1,600–1,700 new students each fall, but numbers dropped significantly after the COVID-19 pandemic. Despite expectations of a rebound, only 1,128 new students enrolled in Fall 2024, missing the target by about 200 students and contributing to a projected $12 million deficit for FY 2025.
National trends compound the issue. While overall undergraduate enrollment rose by 3% in Fall 2024, first-year enrollment declined by 5%, and private institutions like Ithaca saw a ~6.5% average drop. The U.S. is also approaching an “enrollment cliff” in 2025/2026, as fewer graduates are pursuing college, and older students are less likely to return after entering the workforce.
Of course, private liberal arts colleges are particularly vulnerable due to perceptions of higher cost and a shift in student interest toward pre-professional fields. Ithaca College had a $373.7 million endowment and $99.2 million in cash reserves last school year, but it does not want to rely on these funds annually.
The Huron Consulting Group Study
The Huron study began in early October and involved regular meetings with college leadership, including weekly sessions with campus leadership, and monthly steering committee discussions. The study’s base cost is $700,000, with potential increases due to travel and other reimbursables.
Huron is tasked with helping the college reduce its $10 million deficit by identifying non-essential services and recommending potential staff reductions. Eliminating services would also eliminate associated workloads, preventing redistribution of tasks to remaining staff. But Ithaca may have little staff to cut, because past cuts have already increased workloads and stress among staff.
In addition to cost-cutting, the college is exploring revenue-generating opportunities. Ithaca's Provost and senior vice president for Academic Affairs is leading an academic program review with Hanover Research to identify growth areas, particularly in graduate education. Recent additions include a physician assistant program launched in 2021 and a part-time online speech-language pathology program introduced in Fall 2024.
Huron is also helping the college reallocate existing budget funds to cover rising costs, such as salaries, food, and energy. Ithaca acknowledges uncertainty about the extent of reallocation needed but emphasized the importance of thoughtful planning to ensure long-term sustainability.
Community Impact and Future Outlook
Ithaca College has stressed that the college’s leadership is committed to making informed decisions, even if they are unpopular, to secure the institution’s future. The school acknowledges the emotional toll of budget cuts and the importance of transparency and community engagement throughout the process.
The college aims to stabilize enrollment at 1,200 new students per year, with 1,100 considered a lower guardrail. Huron’s analysis will help refine enrollment assumptions, including retention rates and discount rates, to improve budget accuracy.
Ultimately, the study seeks to align Ithaca College’s operations with its financial realities, potentially resulting in a smaller institution with fewer offerings but greater sustainability. In a statement, Ithaca College emphasized that the goal is not to do more with less, but to focus on what is essential to the college’s mission.
E&I Can Help Facilitate Savings
With growing budget constraints and an urgency to increase savings and demonstrate fiscal responsibility, having access to partners who can dive deep into your finances and help identify solutions is a key step in improving efficiency and helping you focus on what really matters.
E&I Cooperative Services helps educational institutions access competitively solicited, cooperative contracts and procurement solutions. E&I’s solutions vary across categories, ranging from professional services, to technology, athletics, and even research and healthcare.
E&I can also help with cost studies and pricing analyses that enable institutions to identify added opportunities to create dollars needed to support initiatives on campus. Just recently, during a pilot program and pricing analysis with the NCAA, E&I was able to help institutions realize an average of 28% across categories. ABACC members can partner with E&I in our price study designed to help members find unique opportunities across their campus.
Connect with Bruce Hoeker to join the study.
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