Loyola University Chicago

Financial Services

Update on the University Budget

April 25, 2023

The higher education landscape across the country is rapidly changing with many colleges and universities facing daunting budget shortfalls due to shrinking enrollments, rising costs, and historically high inflation. While Loyola University Chicago is not immune to these pressures, we have been and currently remain in a financially strong position, with the current fiscal year expected to generate a modest operating surplus. Unlike many other institutions, Loyola does not face a financial crisis.

At the same time, the factors that will have a significant impact on Loyola’s operating budget in the coming years include: the nationwide demographic cliff that will significantly reduce the number of high school graduates in the next 12 years; declining enrollments at the graduate level; intense pressures on faculty and staff compensation levels, and; our continued commitment to supporting financial aid and minimizing future tuition increases. If we do not proactively remove expenses from our operations at this time, we will find ourselves unable to make planned strategic investments in the University’s future that will have long-term consequences for our academic and fiscal health. Moreover, we could find ourselves having to make swift reductions that would impact our current faculty and staff and weaken our ability to effectively serve our students. We want to do all we can now to avoid making decisions under more pressing and inopportune circumstances.

For these reasons, working preemptively now to reduce our operating expenses—when we have the luxury of time to strategically look ahead—is the right thing to do for our students and their families. Doing so will give us a few years to assess our current program offerings and shape and implement plans for new programs that will attract new markets of students and have a material impact on our financial performance. 

As we assess our current operations, forecast for the coming 2024 academic year, and begin to prepare for the FY25 operating budget planning process which will begin in October 2023, identifying and removing $20 million of our operating expenses now—prior to October 1—will help us remain financially strong in the coming years and allow us to invest in key academic growth areas and University-wide priorities. We would also be strengthened to continue meeting our debt and pension obligations and investing in strategic areas such as research and funding academic priorities. $20 million represents 3 percent of the overall operating expenses of the University. Success in this endeavor now will also put us in a better position to continue to support a merit increase plan for faculty and staff for calendar year 2024 amidst a job market that continues to be challenging on all levels.

Know that the University remains committed to being as transparent as possible in communicating financial updates. To date, more than 500 Loyolans have attended Finance Division Budget Town Halls to learn about and engage in dialogue on the University’s fiscal health. We believe that most of our target reductions can be achieved without compromising our students’ experience in and out of the classroom. We have shared with the vice presidents, deans, and other senior leaders some concrete ways to identify these budget adjustments.

I am confident that our University leadership—vice presidents and deans—will carefully embrace this exercise with thoughtful engagement, realistic expectations, and sound judgment. Doing so will continue to ensure that Loyola will maintain our global reputation as a leader in Jesuit, Catholic education.

Wayne Magdziarz
Senior Vice President, Chief Financial Officer & Chief Business Officer