PORTLAND, Ore. — A near record number of first-year students signaled their intent to start classes at the University of Portland this fall, a seeming boon for the school after two years of small class sizes during the pandemic.
But then a record number canceled their deposits.
After originally receiving deposits from almost 1,100 students, the North Portland private university started classes this week with only 860 first-year students, one of its smallest incoming classes in the last decade, Eric Barger, the university’s vice president for financial affairs, wrote in an email to faculty and staff last week.
The record number of withdrawals and other missed budget projections have left the school $8.9 million behind where it expected to be this fall, according to Barger. As a result, the school has temporarily reduced its retirement plan contributions for faculty and staff and put a freeze on hiring as administrators figure out how they’re going to balance the budget.
“We optimistically were looking at the trends and the indicators and it all pointed upward,” said Michael Lewellen, vice president of marketing and communications. “We planned accordingly and things changed. And so, you have to pivot.”
Around 21% of students who put money down to attend the University of Portland backed out, three times the roughly 7% who withdraw in a typical year, Barger said.
Brent Wilder, president of the Oregon Alliance of Independent Colleges and Universities, said he isn’t aware of other private schools in the state that have seen the same level of cancellations.
“This seems to be fairly unique,” Wilder said. “Having conversations with our campuses, everybody was indicating that they were trending toward their budgeted numbers, or a slight increase.”
Some 82% of the students who withdrew said they were doing so for financial reasons, Barger wrote. He pointed to contributing factors like COVID-driven student fatigue and mental health challenges, increased competition among schools for fewer high school graduates, and competition with other private schools that had discounted tuition to increase their enrollment.
Enrollment in higher education generally has dropped during the pandemic. The National Student Clearinghouse Research Center reports that colleges and universities lost 1.3 million students between the spring of 2020 and 2022. The state Higher Education Coordinating Commission will release fall 2022-23 enrollment data for Oregon’s public universities in November.
It cost first-year undergraduate students an average of $35,535 to attend the University of Portland during the 2020-21 school year, according to the National Center for Education Statistics. In comparison, it cost an average of $18,556 to attend the University of Oregon and an average of $20,318 to attend Oregon State University that year.
The withdrawals will cost University of Portland $2.3 million in first-year enrollment revenue and $3.9 million from students expected to live in dorm rooms, Barger’s email said. Retention was down to 86% from an estimated 90%, costing the school almost a million dollars. And summer tuition was down from $6 million to $4.6 million. The school also ended up offering slightly more in scholarships than anticipated, according to Barger’s email. University of Portland was already budgeting for a $4.5 million deficit as it attempts to “grow (its) way back to a sustainable bottom line” following the COVID years, Barger’s email said. With the additional loss in expected revenue, the university is facing a $13.4 million budget deficit.
“We won’t end up there, of course, because we are addressing this,” Barger wrote in an email to The Oregonian/OregonLive.
The impact is big enough that it can’t be offset elsewhere in the budget, Barger told faculty. The school doesn’t have an especially large endowment, he wrote, and it doesn’t draw state funding.
The university has paused most hiring and said it could save money by leaving vacant 80 staff and 13 faculty positions. Administrators are not considering cutting faculty or staff salaries, Barger’s email said, but they could consider changes to retirement and other benefits. The school has reduced its contribution to staff retirement accounts from 11% to 5% temporarily while it works out a permanent plan.
Jeff Gauthier, professor of philosophy and the chair of the University of Portland faculty senate, said his peers appreciate that the school administration has been transparent about the budget constraints and that their salaries will remain intact. But he said no one is happy to see retirement benefits cut.
“We’re waiting and seeing how it’s going to impact us,” Gauthier said. “At this point there are a lot of unknowns out there and of course that doesn’t make faculty secure.”
Administrators are working on a plan for how to balance the budget and increase revenue, which they expect to have in place before the school’s fall break in October. When that new plan is announced, the hiring pause will end and retirement contributions will be adjusted to match the plan, Barger said in his email.
“Making these changes now will lessen the current year deficit and give us the time we need to formulate a more comprehensive, sustainable plan,” Barger wrote.