Budgets Cut After Parsons Enrollment Falters
Parsons missed its enrollment target for the fall semester, which has put the rest of the university in a bind, forcing divisions to cut budgets in order to compensate for the lack of revenue.
Parsons has long been the financial foundation of The New School because it is the largest division by far. Unlike most other universities, The New School is funded by tuition revenue and not by an endowment. When Parsons enrollment drops, funding throughout the university drops as well.
According to Provost Tim Marshall, administrators hoped to increase Parsons’ overall enrollment by 4 percent but ultimately fell short. Enrollment rose by only 3 percent from 4,598 students in 2009 to 4,746 in the Fall 2010 semester.
Each year divisions try to increase their overall enrollment. The university then sets the budget for the divisions based on the expected revenue brought in by the increase in enrollment. However, when those enrollment targets aren’t met, they then have to adjust their budgets.
“The budget process is a dynamic one that requires continual adjustments,” Marshall added in an e-mail to the Free Press. “There is nothing out of the ordinary this year.”
Some divisions have already begun to feel the squeeze. At a Lang faculty meeting on October 21, Dean Stefania de Kenessey asked faculty to begin to conserve resources because the college’s budget would be cut by 1 percent next semester.
“Budgets are always tight at The New School, so belt-tightening never comes as a surprise,” de Kenessey wrote in a separate e-mail to the Free Press. “I expect spring to be financially tight, yes, but the cutbacks should be on a relatively small scale and manageable.”
She went on to say that while on a school-related trip to San Francisco, she had to sleep on a friend’s futon. “Every little bit helps,” she added.
Marshall said that the current budget process is too mercurial and he hopes to make it more stable in the future. “At the moment, we set the budget and then have to adjust it, so the divisions are planning their budgets on a number that ends up not being real,” Marshall said. “It’s a budget process we’ve had for a few years and we won’t do it this way [next year].”
In the future, the university hopes to switch to a multi-year budget model, which would adjust budgets after several years rather than every single year. This would allow the university to compensate for annual enrollment shifts without having to constantly readjust their budgets. If a division misses an enrollment target, they’re able to do more outreach the next year and then hit the final multi-year target without throwing everything off balance.
Although Parsons wasn’t able to hit its enrollment target this year, it did manage to grow along with the rest of the university. Now, 10,510 students are enrolled at The New School, up from 10,436 and consistent with the university’s overall growth trend. “The institution is still growing at a fairly healthy rate,” Marshall said. “The university continues to weather the downturn in remarkably good health.”