Message to the Campus Community:
Loyola and the Economy
12 February 2009
Dear Members of the Loyola Community:
In October, I wrote to you to address how the global economic crisis was affecting Loyola, as well as the steps we were taking to ensure the continued strength and stability of our university. While I am pleased to note that our overall financial condition remains sound, it is clear that the ongoing challenges in the economic environment are having an impact on Loyola, as they are on so many colleges and universities throughout our nation.
The most significant impact of the economic crisis has been the loss in value of Loyola’s endowment, which has declined by nearly a third in the past year. Because the value of the endowment affects the amount we are able to apply to annual operating budgets, we will need to reduce endowment spending significantly in the 2010 fiscal year. Other operating fund resources are also under pressure, including tuition revenues, philanthropic giving, and state support through the Sellinger Fund program, which was cut from $6.8 million to $5.9 million this year and will, at best, remain at the $5.9 million level next year.
While Loyola’s long history of conservative and collaborative fiscal management has and will continue to be a source of great strength, we must make difficult and realistic choices to ensure that we maintain our focus on our key priorities: advancing the excellent academic quality of our programs; meeting the increasing demand for need-based financial aid to ensure Loyola’s accessibility to all qualified undergraduate students, regardless of their socioeconomic background; supporting an environment conducive to study and research; maintaining the health and safety of our students; and protecting the jobs of our dedicated faculty, staff and administrators.
I am proud of Loyola’s longstanding commitment to offering competitive salaries and generous benefits to our employees—compensation which is critical to our ability to attract and retain talented individuals. Nevertheless, employee compensation comprises a significant portion of our operating costs and must be considered as we navigate this challenging time. Like many other colleges and universities, we will be freezing most employee salaries for the next year to help balance our budget. We are, however, hoping to be able to provide some type of additional compensation to those employees at the lower end of our salary scale. While freezing salaries at current levels is not ideal and will require sacrifice on the part of our employees, it does enable us to avoid layoffs, which are already taking place at many institutions of higher education.
Terrence Sawyer, vice president for administration, recently sent out an announcement to the Loyola community outlining a new hiring policy that requires all new and open positions to be vetted through the President’s Cabinet and ultimately approved by me before they are posted. This approach ensures that all hiring decisions are made with the greatest possible consideration for the responsible use of the university’s resources.
Funding for operating budgets will remain flat for the next fiscal year, and I have established a task force that is dedicated to identifying ways to cut costs and increase revenue opportunities. The work of this task force, chaired by David Beaupre, assistant vice president for financial services, will be ongoing.
I mentioned earlier the importance of maintaining our commitment to helping make a Loyola education possible for all undergraduate students, regardless of their socioeconomic status. The challenges of the economic environment are having a significant impact on the financial circumstances of many of our current and prospective undergraduates and their families. As a result, we have increased our financial aid budget for the next fiscal year, and we will be instituting Loyola’s smallest undergraduate tuition increase in 30 years—3.9 percent. This minimal increase is necessary to help offset the loss of revenues from the endowment and state funding and it will enable us to provide the required financial aid to our students.
There is no doubt these are difficult times for Loyola and all of the higher education community. Yet Loyola remains a healthy institution, and I am confident that through strong planning and stewardship we will emerge stronger, having made progress toward our goal of becoming the nation’s leading Catholic, comprehensive university. Some positive news arrived concerning our undergraduate fall to spring retention rates, which were consistent with those of past years. In addition, demand for a Loyola education has not waned. Our goal for the incoming Class of 2013 is to enroll approximately 1,000. With the application deadline having recently passed, more than 8,800 students—a Loyola record—have applied for undergraduate admission.
I remain very grateful to all members of the Loyola community for your spirit of cooperation, collaboration and understanding in these difficult times. I look forward to your continued support in the coming months and welcome your comments and questions about our plans for the future. Please do not hesitate to share your thoughts and concerns with me at firstname.lastname@example.org.
You and your families remain in my prayers as we work through these challenges together and look forward to a bright future for Loyola.
The Reverend Brian F. Linnane, S.J.