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Message Sent To:All Faculty, All Staff, All Students
Message From:Message from the Office of the President
Date Sent:Thursday, May 7, 2020 04:30 PM CDT

University update and financial impact

Dear Loyola Community,

This spring Loyolans showed how adaptable, driven, innovative, and supportive our community is by making the necessary changes to our campus and academic programs with speed and great care. We completed the semester successfully, though very differently than any of us originally imagined. Imagination has long been a hallmark of Jesuit education, and it has been instrumental in helping us remain focused on our core mission to prepare our students to lead extraordinary lives in service of others and the world. Our faculty, staff, and students have also used imagination and creativity to face the unsettling and very real challenges of a “changed normal” that carries with it new terms such as “social distancing” and “remote learning” and new disruptions to the rhythms of university life and human connection.

Now that we have completed the spring semester and will soon begin summer sessions, I know that it continues to be very hard for everyone in our community to deal with the uncertainty of “what is next?” especially as cases of COVID-19 and deaths from the virus continue to grow. Our emergency response team of 265 members (and growing) that includes faculty, staff, and administrators from across the University is collaborating and listening as we work diligently to address our common questions: How will we conduct classes in the fall—in person, online, or a blend of both? How do we use residence halls safely? When can we return to our offices? How many students will join us for the fall? How will we balance the budget? Will I have a job? How can I feel safe? While we run scenarios based on the evolving data and guidance from public health and government officials, our guiding principle is to share what we know, when we know it. I remain committed to communicating with you and reaching out to you every step of the way. I am confident that our response will be measured, thoughtful, and data-driven with the safety of our staff, faculty, and students at the forefront.

Last week I wrote you about steps that we have already taken to manage our finances in a way that has focused on supporting our students, staff, and faculty while also taking into account significant losses of revenue this spring. I also shared some initial steps that are in place to prepare for very uncertain economic times in the months ahead, with a promise to share more details as soon as possible. Families and friends are impacted not only by the loss of income but also by the human toll through sickness and the loss of life. News reports warn that the economy has radically constricted, and unemployment will likely rise to levels not seen since the Great Depression. The stark economic facts are going to impact us as students and their families lose jobs or are furloughed, and therefore, are unable to pay tuition. As you know, tuition is our primary source of revenue. We do not know yet to what degree we will be impacted, and several survey results of new and returning students force us to prepare for a number of scenarios, many of which, candidly, are quite grim. While I hope and pray that the worst-case scenarios do not come to pass, I will continue to be transparent with you about the challenges we are facing and how we are addressing them.

Let me share with you the four principles that are guideposts for our decision-making:

  • The safety, health, and well-being of our community is our top priority; we will continue to be guided by science and follow city and state requirements
  • Students and their needs get first consideration – that includes but is not limited to academic experience, support, and wellness, as well as financial considerations
  • We will not deviate from our mission to expand knowledge in the service of humanity through learning, justice, and faith. Our job is to be a Jesuit university balancing care of the whole person with care of the apostolic work
  • We will do whatever we can to support our employees and colleagues even as we recognize that it may not be possible to do so at the same level in coming months as it is today

Budget/Finance

Our financial modeling, based on limited use of the residence halls and a blended delivery of classes (some in-person and some online) with enrollment across the board lower than in previous years, optimistically predicts that we may have to cut $50 million dollars from our budget. Since we know neither enrollment for the fall nor when we will be able to safely resume many activities and group gatherings, it is difficult to determine the precise number with certainly. However, we do know that our fall revenue will be significantly impacted and we must begin to address the shortfall now. Unlike many other institutions, we will be able to follow a multi-phased approach based on more reliable, timely data as we continue throughout the summer months. We will be taking into account key drivers such as enrollment, registration patterns, government mandates, and student financial need. These key elements are dynamic and change, almost daily, and will serve as the basis for future projections, requiring us to make additional decisions in approximately 30-day intervals throughout the summer.

There are new academic programs launching in the fall and some special incentives for recent 2020 graduates to continue in master’s programs. The new programs are expected to bring in some new revenue, but will take time to attract a number of students and significantly impact enrollment. In order to help our graduating seniors enter a volatile work force, the provost and deans identified several master’s programs that we can provide at a discount to our 2020 graduates, giving them an additional attractive credential and some time before they enter a difficult job market.

We will continue to work together to develop and launch new, innovative programs that will support our future work and the changes facing all of us in academe. However, in our immediate future, we must identify ways to cut expenses to face our current reality. The expense reductions already being implemented and that I described to you last week (including suspension of non-essential capital project spending and staff hiring freezes) are part of the Phase One cost-cutting measures. The rest of Phase One that will be implemented beginning now through the start of the new fiscal year on July 1 also include the following:

  • A reduction in compensation for all University officers, deans, and senior administrators ranging from 15 percent for the president, 10 percent for the vice presidents, 5 percent for the deans, and between 2.5 and 3 percent for other senior administrators across the University.
  • The elimination of nearly all open and funded staff positions across the University and a freeze on hiring for any staff positions that become vacant unless they are essential to sustain campus operations for the fall.
  • A slowing of any new faculty hires for the fall to be done at the discretion of the provost and deans.
  • The partial elimination of the provost’s funded faculty reserve funds and unfilled faculty lines across the University.
  • The elimination of 50 percent of the salary control pools across all divisions. These funds would typically be available for mid-year equity adjustments or for other salary increases.
  • At the suggestion of the provost and with the support of the deans, a 50 percent reduction in PhD admits over the next two years.
  • A reduction in discretionary spending across all areas of the University including but not limited to travel, purchasing, consulting services.
  • Temporary suspension of future salary increases for all Loyola employees beginning January 2021.

While we have not yet taken the step toward reducing specific non-salary operating budgets, it will be important for all Loyolans to exercise prudent and conservative spending practices that commit limited resources only toward those expenditures that are absolutely essential for fall opening. In taking these steps now, we can reduce our expenses by approximately $22 million, nearly half of the $50 million potential revenue shortfall. The shared sacrifice of these actions means we will avoid a University-wide furlough or reduction-in-force initiative at this time. There will likely need to be some isolated staff furloughs within the next few weeks given the recent timelines for openings outlined by the governor and we must be prepared for the possibility of additional furloughs or layoffs if fall data continues to predict significant revenue shortfalls.

We also are assessing all aspects of our campus operations in the weeks ahead and will need to make the adjustments necessary to support a fall class schedule that will be safe and feasible for any residential students, commuters, faculty, and staff.

I am sharing this information not to alarm anyone but to explain some of the uncertainties we are facing for the upcoming academic year and our processes moving forward. We firmly believe that an incremental, thoughtful approach based on good available data and information is the most prudent and fair path forward in very uncertain times with unpredictable student enrollment and lingering impacts of the pandemic.

Consistent with our approach throughout the course of this health crisis, we will maintain timely communication and updates in the weeks ahead about activities, information, and the impacts of COVID-19 on our operations. The COVID-19 website remains an essential source for up-to-date and accurate information, so please refer to it regularly. In the days and weeks ahead, I will share an update and more detail on key decisions and target dates in our strategic approach to reopening, as well as on recruitment and retention. Also, we will be reaching out within the next two weeks to all of our faculty and staff with a survey that will provide us with critical feedback to incorporate into these planning efforts. Thank you in advance for participating through your responses.

One of the core principles of Ignatian spirituality is that we balance ourselves between opposing values. We often talk about a commitment to cura personalis, which is our desire to care for the whole individual. However, we balance that with cura apostolica, which is care for the institution and mission; something we do not talk about as often. There is a built-in, healthy tension between caring for both, but our Jesuit heritage helps us navigate this dynamic tension through discernment. Our difficult choices and decisions are made even more challenging by the lingering uncertainly of the nature of the “changed normal.” Prayerful discernment is the only way we can do everything possible to care for both our people and our beloved University. Let us keep each other in prayer throughout this journey.

Jo Ann Rooney JD, LLM, EdD
President