The New School is expected to breakeven by the time the 2024 fiscal year ends on June 30, despite a projected $57 million budget deficit.
The university’s short-term and long-term financial stabilization plans to address the deficit were endorsed by the Board of Trustees in December, university spokesperson Merrie Snead told the New School Free Press in an email.
The university has made substantial progress in executing their plan through “several mitigation actions,” according to Snead. If their plan is fully realized, “the expectation is that the university will end the fiscal year near or breakeven,” Snead said.
The first phase of the university’s plan to address the deficit — stabilizing the university’s current finances — was accomplished by “reducing planned expenditures.” The university did not detail exactly what these expenditures were in their comment.
The objective of their long-term plan is to improve retention, student housing, and academics. This includes “integrating our Continuing Professional Education offerings into the academic core,” The New School said.
The university attributed their projected deficit to a series of one-time expenses, notably $37 million that was put towards the Stuyvesant Park Residence Hall renovations. Other factors include the “offset grant” allotted to students impacted by the 2022 part-time faculty strike, a decline in enrollment, and $15 million in investment funds the school put aside to draw upon when improving their long-term financial situation.
When the university initially shared an exact number for the deficit in a message to the community regarding financial sustainability initiatives, it was set at $52 million. In meetings with the student, faculty, and staff senates, the projection was said to increase to $57 million for the current fiscal year, with a $200 million deficit over a five year period. This increase was primarily due to enrollment deterioration, according to The New School’s comment.
The university did not give an updated five year projection when asked by the Free Press.
During the previous fiscal year (FY2023), the university began making efforts to address the financial instability of the school. At the time, the university projected an $85 million deficit over the next five years, based on assumptions regarding salary increases, enrollment, and tuition rates. In a letter, the Finance Committee and Chair of the Board of Trustees said the deficit was driven by the “financial impact of the collective bargaining agreement (CBA) with ACT-UAW Local 7902.”
The university did not list faculty wage increases as a major contributor to the deficit when asked by the Free Press.
The university has operated close to breakeven for a number of years, with the exception of a $66 million deficit in 2021 due to COVID-19 related revenue losses. According to recent financial statements, the 2023 change in net assets from operating revenues reflected a $12 million surplus. Similarly, in 2022, the statement showed a $16 million budget surplus.
This is a developing story in a running package on university finances. Follow the New School Free Press to stay updated.