Bad financial news from Oregon State University

Forwarded by a reader. Bargaining with their new faculty union starts in Feb, and bargaining with the legislature and governor has started already. So some “the sky is falling” messaging is to be expected, as when Sharon Rudnick told the UO faculty that we could have raises or wifi, but not both.

16 January 2019

Dear OSU faculty and staff,

You likely are aware that Oregon State’s fall term undergraduate enrollment in Corvallis declined for the first time in many years even as we had projected for a very modest increase. We had both fewer resident and non-resident undergraduates enrolled in fall term classes than we forecasted. Our forecast was not met as significantly lower numbers of admitted students enrolled, fewer international students applied and enrolled, and fewer students returned to OSU than had been the case in recent years. Underlying factors include changing student demographics nationwide and in Oregon and rising regional and national competition among universities for all students—resident, non-resident domestic and international.

As a result, the university’s revenues from tuition for fiscal year 2019 are $7.2 million, or 1.9 percent, short of our projections. Meanwhile, OSU also faces difficult budget cycles this year and next due to state-mandated increased contributions to Oregon’s Public Employee Retirement System; uncertain levels of future legislative funding; possible continued declines in undergraduate enrollment in Corvallis; and a slowdown in the rate of Ecampus enrollment growth. This all occurs at a time when tuition revenues continue to fund the vast majority of OSU’s education and general expenses, while the state’s share of funding proportionately declines or remains constant.

In response, significant work is underway throughout the university to change OSU’s budget trajectory. This work—which includes new enrollment management strategies related to financial aid and scholarships, more proactive recruiting, and transfer student support; the streamlining of business processes; improvements in research administration to reduce management and compliance costs; and investments to better serve our Portland-based students and collaborative partners in the metro region—will put the university in a better financial position. It is worth noting that all of these actions are among the priorities articulated in OSU’s 2019-23 (SP4.0) strategic plan, Transformation, Excellence and Impact.

In addition, we are revising our enrollment projection processes and models to improve our forecast accuracy in an increasingly unstable and competitive enrollment climate. Of course, our leadership, students, and stakeholders also are advocating actively in Salem for the importance of state support for OSU and Oregon higher education in general.

During this time, it is vital that the university’s operating budget is balanced. That means we must reduce FY19 operating budgets through June 30 by the $7.2 million in unrealized tuition revenues. Nearly all major university budget units have been assigned a share of this reduction, and senior university administrative and academic leaders are responsible for distributing the budget reductions to units within their organization as appropriate. The reductions are permanent, as the actual tuition revenues realized this year establish the university’s base revenues for next year.

We will continue to support our faculty, staff and students by maintaining our commitment to competitive salaries; improving our support of research and instruction; investing in public safety measures; and budgeting additional capital renewal funds to repair our aging infrastructure, particularly those that advance the university’s research mission and protect the safety of our community.

In keeping with those priorities, FY19 budget allocations for enrollment management, research office, and public safety will not be reduced. However, other central administrative functions will absorb a larger relative share of the reduction than academic units. Budgets for the units within the President’s Office, the Provost’s Office, the vice presidents of Finance and Administration and University Relations and Marketing will be reduced 1.8 to 2.7 percent. Budgets for colleges and academic units throughout the university will be reduced by 1.1 to 1.7 percent.

We regret having to take these actions and we realize these are challenging times for higher education in Oregon and across the United States. Yet, we firmly believe that our university’s outstanding faculty and staff, quality academic programs, research and engagement excellence, outstanding online programs, and presence throughout the state and the world will enable Oregon State University to succeed and contribute to the ongoing success of OSU’s faculty, staff and students.

We plan to hold campus meetings in Corvallis and Bend in the near future regarding these changes and will continue to share additional updates with you.


Edward Feser
Provost and Executive Vice President

Mike Green
Vice President of Finance and Administration

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10 Responses to Bad financial news from Oregon State University

  1. honest Uncle Bernie says:

    I expect similar news, or worse is headed to UO, given the sharp drop in out of state students.

  2. Deplorable Duck says:

    WiFi is highly overrated–raises for all please, especially our learned men and women.

    Sympathies to those whole lives are disrupted. Still, following the Eastern parable, it’s hard to know whether this will ultimately turn out to be bad or good. Diogenes was destitute and lived in a cistern. And yet, he’s still remembered and followed after two thousand years.

  3. charlie says:

    OSU’s functionary’s explanation for why there’s a drop in enrollment includes demographic changes and competition for students. How about…its too damn expensive to go to your college. Forget your old buildings, safety concerns, and the usual boilerplate as to why more debt has to be issued for more construction. If potential admits have finally realized that the cost of attending your institution overwhelms the value of a diploma, they’re not going to attend…

  4. Christina says:

    Simple. Every friend I know is going to UO because they offer a better All-around experience. Academics and Big time Athletics. It’s worked for Alabama. Their Academic profile has been raised by tons of Northeast kids wanting that experience. These are good students who have chosen this. Same is currently happening at UO. My neighbors sister is planning on attending UO. She wants to join a Sorority. All the data is online.

    • uomatters says:

      The empirical evidence that big-time sports increases enrollment (as opposed to applications) and student quality is very mixed. Most of the research, including some sponsored by the NCAA, finds that the effects are negative or small and not worth the costs, even when the costs of liability insurance and lawsuits are ignored.

      See for a slightly more positive take, although even that is heavily qualified in the conclusion. I haven’t looked at the sorority research – does anyone have a link for work on that?

    • honest Uncle Bernie says:

      Christina, perhaps you are right. But my guess is UO is in about as much difficulty as OSU.

      I wonder too about SAT scores. I wonder if OSU has passed UO by.

    • charlie says:

      Even mighty Bama is dealing with decreasing enrollment.

      UA has a plan if flat enrollment continues. Tuscaloosa News Sep 16, 2018

      Nearly all public unis, whether they have a major sports program, or not, have seen enrollment increases over the past twenty years. Cal State Long Beach/Fullerton/Northridge all dropped their football programs years ago. Didn’t affect enrollment. Of the nine UC campuses that make up the system, only three have an athletic program of any note. Has no impact on enrollment.

      Reality is, the number of potential admits willing to pay multiple times more in out of state tuition, is dwindling. That’s going to be the reality going forward…,

  5. Fishwrapper says:

    Also of note – though it was news on Friday, the institution is only making it news “official” todya, on a (holiday) Monday…

    Last Wednesday, the campus learned of the above-mentioned rescission decision; on Friday, the OSU Board of Trustees “[a]pproved a 6 percent pay raise for OSU President Ed Ray, which brings Ray’s annual compensation, effective Jan. 1, to $809,988.”

    I’m not sure what the message from the Board is supposed to be, other than that timing can be awkward.

    (To be at least fair to Ed Ray, he has returned each of his past raises from the Board to student scholarships.)

  6. uomatters says:

    It’s odd, but OSU’s PR flacks have a much more positive spin on enrollment:

    For the data see

    I can’t find the equivalent for UO, what data they do post is at

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