UWM faces daunting financial challenges

The UWM student union

Last updated on July 15, 2021 at 3:59 pm

The University of Wisconsin-Milwaukee falls behind its peers nationwide in revenue and enrollment, leading to worrying financial prospects for the institution, according to a new report.

These challenges could jeopardize the UWM’s “R1” award – the highest research rating in the Carnegie University Classification that the UWM has held since 2016, so the analysis of the Wisconsin Policy Forum.

“We find that the UWM stands out from other public urban universities,” says the report. “In terms of enrollment and government funding and study income, almost none of the colleagues at the UWM are facing such major challenges and together they could endanger their status as a first-class R1 research institution.”

The university’s financial dilemma is a confluence of several factors, including a decade of decline in enrollments, an 8-year government freeze, and delayed government funding – all of which were exacerbated by the COVID-19 pandemic, the report said.

The report, commissioned and partially funded by the UWM Foundation, follows a report published by the WPF late last year that examines how the UW System and UW-Madison are also losing their competitive advantage.

The total income of the UWM (excluding state study grants) has increased by 11.7% in the last ten years, which is well below the inflation rate. Total revenue, including US financial aid dollars, declined slightly over the decade.

As of 2008, the UWM’s state funding and study revenues were roughly the same; today his tuition fees tower above the state appropriations. UWM’s total budgeted spending remained essentially unchanged between 2011 and 2021, with the largest impact falling on UWM’s core activities (including an 11% decrease in tuition spending and a 25% decrease in student funding, the report said.

In 2019, the UWM received government funding of $ 5,229 per student, 28% below the average of 15 peer universities and the third highest in this group. That same year, UWM received $ 14,038 in combined government funding and tuition and fee income, the second lowest of its peers.

In the meantime the registration has decreased. The UWM enrollment rate in full-time equivalents decreased by 6.4% from 2013 to 2019 compared to its national counterparts, which recorded an average enrollment increase of 3.6% during this period. UWM’s enrollment loss was the fourth largest among its competitors.

The report found that declining enrollments are typical of a university in Wisconsin and the upper Midwest, given demographic trends of falling birth rates and net churn, but the UWM’s losses are worse than those of others in the state and most national counterparts. The report cited the decline in the number of students in the greater Milwaukee area who graduated from high school in the past decade as an explanation for the decline in UWM. By comparison, UW-Madison’s prestige may have isolated the flagship university (where enrollments have increased 10% over the past decade) from that trend, the report said.

However, the report emphasizes the important role of the UWM in the state as the second largest university in the state after UW-Madison and the third largest research institution after UW-Madison and the Medical College of Wisconsin. It also fills a crucial niche in caring for those underrepresented in higher ED, with the largest number of black, Latin American, and Southeast Asian students of any UW campus and a large representation of students receiving Pell scholarships, it said Report.

The decline in enrollments at the UWM combined with the state tuition freeze has moved tuition fees from a source of revenue growth in the 2000s to a slightly lower decline since 2019, the report said. It remains to be seen how much tuition fees will rise in the future. The state budget 2021-23 lifts the freeze and transfers this decision-making power to the Board of Regents.

COVID-19 has exacerbated these challenges. The university posted a total loss of nearly $ 92 million from the pandemic. While the university in turn received $ 95 million in federal pandemic aid, the UWM has to pour $ 42 million of that into emergency grants for students, leaving $ 53 million for the institution. UWM has filled most of the gap by providing $ 32 million in vacation time for employees and cuts in hiring, travel and other expenses, the report said.

“The pandemic dealt the already weakened finances of UWM a sharp blow and threatened permanent damage to the institution,” the report said.

The faculty is facing the financial challenges. The UWM had 100 fewer faculty members in 2020 than in 2010, and the loss would have been greater, according to the report, had the UWM not merged with the Washington County and Waukesha campuses.

The faculty remuneration of the UWM also lags behind their colleagues. The average salary at UWM was the second lowest in its peer group. Full professors at UWM earned an average of $ 105,884 in 2020, the third highest among their peers.

All of these factors affect the UWM as a research facility, according to the report. R&D spending at UWM decreased 12% from 2011 to 2019, compared to an average increase in spending of 13.8% at comparable companies. That decline was mainly due to cuts in state, local and federal funding, the report said.

“Just as the UWM’s surge in research efforts and gaining R1 status have benefited the entire region, the recent decline is one of the most worrying trends for the University and Greater Milwaukee as a whole, as research can fuel a regional economy, by attracting federal funding and stimulating innovative new products and businesses, ”the report reads.

The report offers several recommendations for addressing these challenges, including:

• Increased state and local funding. With state general fund tax collections expected to be $ 4.4 billion higher than previously anticipated through June 2023, the state could afford to direct additional funds to the UW system and UWM, the report said .
• Increased financial support to attract new students to the UWM. One approach would be to expand a statewide plan like Bucky’s Tuition Promise, which guarantees enough scholarships and grants to cover four years of tuition and fees for UW Madison students with gross household income of $ 60,000 or less, the report said.
• Establishment of a foundation to finance student grants and programs for low-income students.
• A “thaw” in class. For UWM, a 2.5% increase in tuition fees would bring the university an additional $ 3.2 million in revenue, the report said.
• Better service for colored students, low income and non-traditional students.

But cuts may be necessary, the report admitted. She pointed out several possibilities:

• Consolidation of underutilized academic programs / majors.
• Cut out some schools and colleges. (At 14, UWM has more than most of its peers).
• Cut campuses in Waukesha and Washington Counties, where enrollments have declined by roughly half over the past decade. “If enrollments continue to decline, UWM officials will struggle to avoid major cuts or even closures in these locations,” the report said.

Other universities in UWM’s peer group for the study were Cleveland State University, Georgia State University, University of Illinois at Chicago, University of Louisville, University of New Orleans, Wayne State University, University of Missouri-Kansas City, Rutgers University-Newark, State University of New York in Buffalo, University of Akron Main Campus, University of Cincinnati-Main Campus, University of Toledo, University of Texas in Dallas and Temple University.

source https://collegeeducationnewsllc.com/uwm-faces-daunting-financial-challenges/