The university’s support for the Universities at Shady Grove last academic year led to about a million-dollar deficit, according to data from the Office of the Provost.
As Shady Grove continued to grow, rising enrollment and an increased number of programs brought higher costs, and this university lacked a way to pay for all of it, said Mary-Ann Rankin, provost and senior vice president. The Shady Grove programs generated $6.2 million of revenue from tuition and application fees for this university, but overt costs added up to about $6.7 million, leading to a deficit of more than $520,000 for this university’s 2014-15 academic year.
This does not include an additional estimate of $400,000 of “hidden costs,” such as employee work time that wasn’t measured or travel expenses, said Elizabeth Beise, the associate provost for academic planning and programs.
After accounting for expenses, government funds and funds from this university’s provost’s office, the Shady Grove undergraduate programs had $2.2 million in leftover funding to allocate toward one-time costs, such as building a lab, student programming and other opportunities. These funds can also be used to cover costs if state budget cuts were to impact the Shady Grove campus, Rankin said.
This university’s provost’s office contributed $1.76 million for space rental, instructor salaries and other administrative costs for the Shady Grove programs, Rankin said.
“Shady Grove has been an important investment for us and has also seen a lot of growth and success over time,” Rankin said. “Now, as we begin planning for additional programs, we need to review the way we approach the financial side of things.”
The provost’s office discovered the debt after a retired budget officer conducted a detailed audit on the provost’s office, going “well back” over the years of accounting and expenses, Rankin said.
The deficit comes during a time when Shady Grove is designing a $150 million building in Rockville for bioscience and engineering, with modern laboratories, Beise said. Shady Grove and the University System of Maryland are looking for government funding to cover the costs, she said.
University officials are thinking of ways to combat the deficit while still supporting Shady Grove’s programs and expansion, Rankin said, pointing toward the program’s academic success and high graduation rates.
“We need to create a new business model,” said Cynthia Hale, associate vice president for personnel and budget.
It is too early to be sure of any concrete plans, Hale said, but the provost’s office is rethinking its financial approach. This could include lowering various costs to either break even or chip away at the deficit. The office is also hoping the state will provide a larger budget to support Shady Grove’s growth. Currently, the state provides $2.9 million, distributed among three of the Shady Grove programs.
Shady Grove students pay the same tuition as students studying at this university, Rankin said. Raising tuition to lower the deficit is not an option because of the large number of Shady Grove students who also work or support families while studying, she said. The average age of Shady Grove undergraduate students is 29, according to Shady Grove’s website.
University President Wallace Loh said Shady Grove’s appeal to these “nontraditional students” is what makes it important and worth supporting.
“We’re absolutely committed to them, regardless of how much we pay,” Loh said. “We view it as part of our mission. They’re our students, and we need to spend whatever money is necessary for them to get a very high-quality education that’s no different than if they came to College Park.”
