IUP has until July 2025 to eliminate its remaining deficit and balance its budget.
To achieve this, the university has been in the middle of its current Comprehensive Planning Process (CPP) since 2022. As part of the CPP, IUP held its second open forum this semester about its finances on April 30.
During the first, held in January, it was revealed that IUP was facing a general education deficit of around $10 million . Significant progress has been made since then, as IUP’s general education deficit stood at $4.2 million as of April 30. The university is still identifying further reductions.
If IUP fails to balance its budget by July 2025, which is 14 months away, then the Office of Chancellor Dan Greenstein of the Pennsylvania State System of Higher Education (PASSHE) will intervene. This intervention would result in PASSHE deciding how IUP will balance its budget.
Vice President of Administration and Finance, Debra Fitzsimons, said that no one at IUP wants to see that happen.
“If we don’t meet that target and do the work ourselves, then the state chancellor’s office would step in,” Fitzsimons said. “We want to chart our own course.”
During the forum, Fitzsimons discussed ways that the deficit has already been reduced as well as areas for further reductions.
IUP’s finances were benefited by a higher enrollment than expected for the 2023-24 academic year. Enrollment was 5% higher than projected meaning that IUP received an additional $3 million in revenue than expected.
In other enrollment news, IUP reduced its student aid allocations by $2.2 million. The aid that individual students will receive is not decreasing, but the university had apparently overestimated the amount of funding needed for student aid resulting in around $3 million in unspent aid each year.
IUP also identified $500,000 in savings by eliminating redundant contracts with possible further reductions in contracting and consulting.
Revenue projections into the future are still uncertain, however, because of enrollment fluctuations and the nature of PASSHE’s funding. Due to nationwide issues with the FAFSA resulting from a botched update , prospective IUP students are receiving delayed award letters. This delay in notification could cost IUP.
Another issue is that the state legislature could decline to increase PASSHE’s budget as has happened in the past. IUP is still assuming an extra $4.5 million in state appropriations for next year, however, as the state legislature has increased PASSHE’s funding the past several years . Still, IUP is preparing a budget model for if the state legislature does not increase funding.
“Our revenue projections as we mentioned are still very uncertain,” Fitzsimons said.
IUP is also facing a $5.7 million auxiliary fund deficit. The auxiliary fund relates to IUP’s housing and dining services. A work group will be put together to increase occupancy in IUP’s dorms and increase dining revenues.
Additionally, IUP holds around $28 million in housing and dining debt which is currently costing the university $3 million a year. According to Fitzsimons, this level of debt is too high and must be paid off soon for the university to remain financially solvent.
The Academic Restructuring Plan to combine departments is another avenue to reducing costs. Elections of new departments chairs and department names are almost complete. IUP is also looking into course sharing between PASSHE schools to provide greater course offerings to students.
It was reiterated that the proposed College of Osteopathic Medicine is being funded entirely by donations and appropriations that are entirely separate from the university’s regular budget.
Updates will continue to be provided with the next one being on May 22.
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