Dr. Knapp addresses long-term budget challenges.
Last March I wrote to the George Washington community about budgetary pressures caused by a decline, over several previous years, in the number of students enrolled in our graduate and professional programs. At that time, we were focused on turning around a relatively short-term problem. Although that process will continue over the next few years, we are on track to rebuild our enrollments, thanks to the concerted efforts of faculty and deans across the university.
We now turn our attention to a longer-term challenge, one that affects all universities across the nation: the growing disparity between the rising cost of these labor-intensive institutions and the stagnant or declining income and wealth of many students and their families. Since my arrival eight years ago, we have taken a number of steps to help address this challenge. These have included moderating the rate of undergraduate tuition increases (while maintaining our fixed tuition program); ramping up our fund-raising for student aid; and finding savings in administrative processes so we could hire new faculty members and build our academic programs without having to do so by extra growth in tuition rates.
We have also taken an important step designed to increase the autonomy of the schools, giving them more control of their own destiny and more flexibility in developing their own programs. The provost and deans designed together a new budget model, implemented for the first time this year, that allows the schools to retain a much higher percentage of the revenues generated by graduate, off-campus, and on-line programs than they did under the former model. Of course, the schools will need to continue focusing on building their enrollments to ensure that their revenues will be sufficient to meet their costs and support their aspirations.
The fact that more revenue will now be retained and controlled by the schools means that we need a corresponding reduction in the size of the university’s central administration. As we plan our budgets for the next five years, beginning with budget year 2017 and continuing through 2021, we are asking all central (non-school) units to develop scenarios showing annual cost reductions of 3 and 5 percent. How far we will need to go in implementing those scenarios remains to be seen, but we will have a far easier time navigating the economic waters ahead of all universities if we have plotted our course in advance.
In a separate and ongoing process, I have asked the deans and vice presidents to work together on removing roadblocks and improving administrative processes to make it easier for faculty, staff, and students to do their work. Although this effort is not directly related to the cost-savings the administrative units have been asked to find, I have no doubt that, if we can identify ways to operate more efficiently and effectively, that will inevitably suggest ways of saving time and money we can invest instead in our core missions of education, research, and service.
Fortunately, we are blessed as an institution with people of extraordinary talent, ingenuity, and good will who, I know, will rise to each of these challenges and ensure that we are poised, five years from now, to launch the third century of our great university.