Syracuse University’s fiscal year 2017 budget and projected 2018 budget each feature a surplus and illustrate a growing presence of online education programs at the university, a University Senate report shows.

SU expects to have revenues of about $1.39 billion in 2018 and expenses of about $1.388 billion, according to a report presented at Wednesday’s Senate meeting by the Committee on Budget and Fiscal Affairs that summarized SU’s fiscal year 2017 budget and broke down the university’s 2018 projections.

A full breakdown of the 2017 budget is not included in the report, but the report notes that SU had a budget surplus of slightly more than $17 million during the year. Expenses were 1.6 percent below projections, which was the result of less spending on fringe benefits than expected, according to the report. Fringe benefits are defined as costs to the university such as healthcare, retirement contributions, employee tuition benefits and other benefit costs.

The distribution of the university’s revenues and expenses outlined in the report closely mirror distributions in years past, but the report does highlight one new trend at SU: There has been rapid growth of online education in recent years. Tuition revenue from online graduate programs has more than doubled since 2015, a period of growth that coincides with the launch of partnerships between several of SU’s schools and colleges and 2U Inc., a provider of online education degree programs.

SU will also pay more than $34 million in 2018 in “online vendor fees,” which are fees charged by third-party vendors, such as 2U, that administer online programs for SU’s schools and colleges, according to the report.

In 2015, SU received about $7 million in net tuition revenue from online graduate programs, per the report. That figure surpassed $15 million in 2017 and is expected to approach $20 million in 2018. Over a similar period, SU has seen a drop in its revenue from the College of Law: SU received about $20 million in net tuition revenue in 2014 but less than $15 million in 2017. That figure is expected to grow in 2018 but still lags behind the growth of tuition revenue from online graduate programs.

“I think we were surprised,” said Sinéad Mac Namara, an associate professor of architecture and chair of the budget committee, in reference to the growth of online education revenue. “I personally was a little surprised to see how quickly it’s growing. That’s interesting.”

Since 2015, 2U has launched partnership programs with six of SU’s schools and colleges: The Martin J. Whitman School of Management, the S.I. Newhouse School of Public Communications, the College of Engineering and Computer Science, the School of Information Studies, the College of Law and the Maxwell School of Citizenship and Public Affairs.

Through its cloud-based software-as-a-service technology, 2U programs feature live, face-to-face exchanges between students and professors. Other universities and colleges that 2U has partnerships with include several of SU’s peer institutions: American University, Georgetown University, George Washington University, Northwestern University, Southern Methodist University, University of Dayton and Vanderbilt University.

2U charges fees to institutions that use its services in addition to receiving a share of tuition revenue.

Overall, online education programs still play only a small part in SU’s budget, according to the report. Undergraduate tuition dollars remain as the primary source of revenue for the university, with SU expected to receive more than $661 million in that area in 2018.

Other significant sources of revenue include about $272 million in “auxiliary direct revenues,” which consist mostly of room and board charges, about $202 million in total graduate and law school tuition revenue and $54 million in grants and contracts.

Anna Henderson | Contributing Design Editor

The primary sources of SU’s expenses include about $300 million in salaries paid to faculty and staff, about $253 million in undergraduate financial aid, about $220 million in administrative cost, about $187 million in operating costs, about $100 million in fringe benefits and about $56 million in graduate financial aid.

The budget committee consists mostly of faculty across several of SU’s schools and colleges but also includes staff and administrators, namely SU Chancellor Kent Syverud and Chief Financial Officer Amir Rahnamay-Azar.

Here are other notable takeaways from the report:

Buyout information sought

The report notes that several members of the Senate and of the budget committee have requested a full report on the outcomes of the buyout in 2015. That year, the university launched the Voluntary Separation Incentive Program, which offered a one-time payment equal to half of a year’s salary to staff members whose combined age and years as an employee were greater than 65.

Syverud said in 2016 that 254 staffers took the buyout, but there has not been a full report on the program. Wednesday’s budget committee report notes that senators have requested information on the number of staff members who participated in the buyout, the number of positions that were reduced, the costs savings and a breakdown of what those savings were used for.

Bruce Carter, an associate professor of child and family studies and a member of the budget committee, said responses from administrators to such requests have so far been non-committal as far as he can tell.

“We have not gotten the details that we’ve asked for,” he said.

Salary growth

The report notes that the university-wide assessment conducted by Bain & Company in 2014 found that salaries above $125,000 at SU grew at faster rates than lesser salaries. Wednesday’s report indicates that a full inspection of that trend is unlikely.

“A full report to the Senate on this matter by this committee would require access to confidential salary information and significant time investment,” the report stated.

Published on December 6, 2017 at 10:42 pm

Contact Michael: mdburk01@syr.edu