By Rafal Rogoza —
Tuition will continue to rise to cover expenses, according to Aaron Aska, NJCU’s VP of Administration and Finance. Rising salaries and lower funding from the state means that NJCU will be forced to raise tuition in order to balance a growing budget.
“As long as the state of New Jersey continues to underfund higher education there will be a need for tuition to rise,” said Aska. “The University can attempt to control rising expenses through various cost saving and efficiency measures but ultimately increased revenues will be needed to cover inflationary costs.”
NJCU’s budget has increased rapidly over the last five years, rising $18 million dollars to $156 million for fiscal year 2011. According to Aska, the growing budget is a result of salary increases due to collective bargaining contracts and an increase in adjunct expenses.
“Salary costs comprise approximately two thirds of the total budget,” said Aska. “In the contract that the union negotiated they have built in increases. This has nothing to do with the university, the state negotiated that with the union. They are looking into localizing those contracts but we’re not there yet. So our contracts are not different than Montclair or Kean They’re all a product of collective bargaining. What is unique to NJCU is rising adjunct costs. Our adjunct costs have increased 60 percent.”
Adjunct professors are not part of the union’s collective bargaining agreement, however, adjunct expenses are rising because NJCU is hiring more adjunct professors.
Asked why NJCU is hiring more adjunct professors, Aska answered, “Partly because we don’t have enough full time professors. Faculty maybe on sabbatical or faculty release time. There is a whole host of factors why adjunct costs are rising.”
Rising costs are a concern as enrollment in NJCU has fallen, decreasing the university’s potential revenue from tuition and fees. According to statistics provided by the NJ Secretary of Higher Education , NJCU is the only state university to have a decreasing enrollment rate. NJCU’s enrollment has fallen 3.5% since 2001.
“Our trajectory in revenue is going down and the trajectory of our expenses is going up. That is not a sustainable situation that we are in,” said Aska.
According to Aska, 80% of NJCU’s revenue comes from tuition and state funds. The recession has forced Trenton to tighten its belt and cut spending because of lower tax revenue. Moreover, state funding for higher education has been decreasing before the economic crisis, when asked why this is so Aska answered, “The perception is that higher education is not efficient. So we’re at fault ourselves. Can we deliver higher education more efficiently? I think we can. But I see this as the new normal, I don’t see the state restoring the funds for higher education.”
With less money coming from the state the university will primarily rely on increasing tuition to cover the school’s rising expenses.
“To reduce our dependence on tuition we have to diversify our revenue,” said Aska. “We have to be more entrepreneurial and look for revenue in other places like fund raising and auxiliary services.”
Aska suggests that the university may lower its expenses by implementing such initiatives as consolidating departments and services, outsourcing services, eliminating or restructuring low enrollment programs where academic integrity will not be impacted, and lobbying the state for more funds.
Besides a rising budget the university has to finance its long term debt of $142 million. In fiscal year 2012, NJCU spent $9.4 million in repaying its debt, $2.8 million paid the principal and the remaining $6.6 was charged interest.
“These are old bonds that have paid for the building of this university. We will take on new bonds and new debt to finance the west side campus. Last year, we took out $30 million in debt to finance maintenance costs on existing capital,” said Aska.
How does the debt effect tuition?
“We budget for it. When we are going to acquire new debt we look at the interest portion of our debt and we include it in our budget.,” said Aska.
The university has added a facility fee this year. According to Aska, the fee is for new construction and necessary renovations on campus. NJCU will not borrow money to pay for a new residence hall planned for West Side Avenue, instead rent paid by dorming students will cover the hall’s construction costs.
Aska also commented on the need for students to take action and pressure Trenton to increase funding for higher education. “You have to call your state legislature, they need to know that your voice needs to be heard. Students don’t like to vote, so they’re not even being recognized.”