Tuition is No. 1 revenue source for CU Denver’s budget

Campus Conversation hones in on student retention and revenue diversification as keys to long-term fiscal sustainability

February 4, 2019

Student tuition and fees account for 80 percent of the university’s $214 million annual budget. That was one key piece of information that university leaders shared with the university community during a Campus Conversation on Jan. 29 in the Lawrence Street Center Terrace Room.

During the session, titled “Higher Ed Funding Demystified,” Todd Saliman, CU System vice president and chief financial officer, and Todd Haggerty, CU Denver assistant vice chancellor for budget, led a dialogue about higher education funding in Colorado and the impact on our campus.

Todd Haggerty, CU Denver assistant vice chancellor for budget
Improving student retention is a powerful way to grow university revenue, said Todd Haggerty, assistant vice chancellor for budget, during the Jan. 29 Campus Conversation.

To secure CU Denver’s long-term fiscal sustainability, “enrollment is really the key, and it’s not just enrolling new students but also retaining existing students,” Saliman said.

Colorado Gov. Jared Polis has recommended a budget increase in funding for higher education, with the stipulation that tuition be kept flat in the coming year. For this reason, improving student retention is a particularly powerful way to grow revenue for CU Denver, Haggerty added.

A 1-percent increase in student retention creates a $1.2 million impact on this campus, Haggerty said. By comparison, a 1-percent increase in new freshmen enrollment generates about $200,000 in additional revenue.

That’s why CU Denver’s “Unparalleled Student Experience” initiative has immense potential to stabilize the university in the near term. The project aims to streamline students’ academic journey to make it easier to navigate CU Denver’s systems and processes so they can spend more time on their studies.

“Student success is our financial success,” Haggerty said. “If we can reach that goal of 75-percent retention, it’s going to have a huge financial impact on this campus.”

CU has $12 billion impact to the state economy

  • The University of Colorado is the third-largest employer in the state.
  • With a $4.5 billion annual budget, CU generates more than $12 billion in economic impact through teaching, research, the arts and its health care system.

Learn more about the CU System budget.

Proposed 13-percent increase in state funding

State lawmakers recently proposed a 13-percent increase in state funding of higher education for fiscal year 2019-2020. This percentage amounts to $30 million – less than 2 percent of the CU System’s $4.5 billion annual budget.

Under the state’s funding formula, CU Denver receives about $4.5 million. Haggerty said this amount covers the essentials of the operating budget and allows for a balanced budget for next year – but with little margin for error.

“We’re excited to have a balanced budget but also know that there’s so much more we can do with additional revenue sources,” Haggerty said.

However, Saliman noted that while CU is anticipating an increase in funding next year, state support for higher education has declined significantly over the past two decades.

In 2001, state funding supported about two-thirds of a student’s education. Today, that figure has flipped, with students now carrying two-thirds of the cost. An estimated $6.4 billion in higher education costs have shifted to the students themselves.

“It’s had a dramatic impact on students,” Saliman said.

CU System fund types

CU’s revenue comes from various sources such as tuition and fees, state funding, research and gifts. The CU System groups these into three categories that dictate how they can be used.

  • Operating revenue (state funding, tuition and fees) – Pays for faculty, student advising, technology, administration and scholarships.
  • Restricted revenue (research grants and private gifts) – Pays for specified purpose, as designated by grantor or donor.
  • Auxiliary revenue (self-funded activities) – Pays for business operations, including dormitories, book stores, parking, athletics, medical clinics and dining halls. 

Learn more about the CU System budget

CU System has found over $112 million in efficiencies to control costs

“We’ve been working so hard to control costs,” Saliman said.

Through its efforts in recent years to become as cost effective as possible, CU has realized over $112 million in efficiencies. Saliman said this has helped keep higher education as affordable as possible for students, with out-of-pocket costs for some student groups actually trending downward in recent years.

While CU may look to other universities as models for additional cost-saving measures, Saliman said CU’s efforts and accomplishments in this area make it a cost-saving model itself.

Todd Saliman, CU System vice president and chief financial officer
“Enrollment is really the key, and it’s not just enrolling new students but also retaining existing students,” said Todd Saliman, CU System vice president and chief financial officer, during the Jan. 29 Campus Conversation.

Entrepreneurial spirit, partnerships key to long-term success

Chancellor Dorothy Horrell said CU Denver’s long-term success will require entrepreneurial thinking.

“We need to be looking at how to expand our customer base through partnerships with business and industry, for example,” Horrell said.

In addition to diversifying revenue sources, she stressed the importance of creating educational offerings, such as stackable credentials and continuing education opportunities, to meet the needs of tomorrow’s learners.

Emphasizing the shared responsibility for student success, Horrell encouraged all staff and faculty to be a friendly, helpful face to students.

“Creating an unparalleled student experience is the job of everyone in this room,” she said.

Three people sit and listen intently
Staff and faculty listen closely to a discussion of funding sources during the Jan. 29 Campus Conversation.