Ithaca College works to decrease budget deficit through revenue enhancement

Ithaca College has been working with Huron Consulting Group since October 2024 to identify strategies to close the budget deficit through a balance of cutting costs and increasing revenue. Administrators are pursuing multiple paths to increase revenue, including increasing enrollment, net tuition revenue, retention and philanthropic gifts.

Tim Downs, vice president of the Division of Finance and Administration and chief financial officer, said he projects that the college’s budget deficit will increase from $4.1 million at the end of Fiscal Year 2024 to $12 million by the end of FY 2025. Downs said the college hopes to close more than half of the deficit through revenue enhancement and growth.

“We cannot cut our way down because we would reach points at which the services we’d offer would just not be to the standard and caliber … for what the students expect and what the students really need,” Downs said. 

Melanie Stein, provost and senior vice president for Academic Affairs, explained during the February State of the College meeting that Huron has found four primary paths to increase revenue: tuition and fees, academic program development, athletics and advancement strategy.

Downs said enrollment and net tuition revenue have the largest impact on revenue. According to its FY 2024 audited financial statement, the college generated $167.4 million of its total $208.4 million revenue from student-related revenues: tuition, room and board. 

Downs said via email that the overall discount rate — the share of the listed cost of attendance that students actually pay after receiving merit aid and financial aid — for current students is about 55%. Information from the college’s consulting partners — Huron, HCRC and Carnegie Dartlet —  helped administrators set a new target discount rate for incoming students, 60%. This means incoming students will pay a larger share of the listed cost of attendance, which will increase revenue. The discount rate for current students will not change.

Maintaining Enrollment

The Western Interstate Commission for Higher Education, which studies higher education demographic trends and innovation, forecasts that college enrollment will significantly decline starting in Fall 2025 as the number of high school graduates decreases. WICHE predicts that concerns about college affordability and doubts about the value of a college education also contribute to declining enrollment.

Patrick Lane, vice president of Policy Analysis and Research at WICHE, said there is no perfect solution to the challenges facing colleges because each college’s context is so different. 

“Our big takeaway — and this is not by any means exciting or novel or new — is [colleges must] measure and evaluate and adjust,” Lane said. “Student-centered approaches that are really trying to put students at the forefront and make sure that they have a clear pathway to advance through the post-secondary pathway [are] essential.”

Lane said colleges should devote more resources to improving students’ access to higher education and providing support to help them complete college, which may require more staff members and physical resources, but it typically pays off with increased enrollment, retention and graduate job placement. 

Downs said the college is working to increase retention over the next three to four years and is considering ways to better support students while increasing efficiency. For example, he said the college is planning to move the Center for Student Success and the Center for Career Exploration and Development within the Division of Academic Affairs starting July 1. Downs said this will allow students to go to one central location for advising and career support and could reduce the number of staff members needed to support the volume of students. 

The college is also investing in intercollegiate athletics. Downs said students who otherwise might not consider IC often enroll because they have the opportunity to play their sport, and student-athletes have a higher retention rate than other student populations. Therefore, Downs said, the college decided to introduce a women’s wrestling team in the 2025-26 academic year. The college is also investing in capital projects for athletic facilities, including constructing a new outdoor track and throwing fields and new bleachers at the Hill Center.

Academic Program Development

Stein said administrators often look at the academic portfolio — the college’s undergraduate majors and minors and graduate program offerings — to make sure that the college has degree programs that students want to pursue.

The college started working with Hanover Research, a market research consulting firm, during the 2024-25 academic year to identify academic programs that the college can add or reimagine to attract more students and increase enrollment. Hanover benchmarks the number and types of academic programs at IC with peer institutions’ offerings, and it compares the number of students graduating from each program.

Stein said her office decided to start working with Hanover to obtain market research to guide faculty members’ academic program development work.

“In [this] kind of environment, every college needs to try to be as smart as possible about how it’s shifting and adapting its program mix to align with what the workforce markets need and what students are looking for,” Stein said.

Stein said her office is working on developing or reimagining 17 academic programs — including undergraduate majors and minors, as well as graduate degrees. It can take up to two years for the college to develop new programs or changes to existing programs and get them approved by the New York State Department of Education — and sometimes longer for more complex changes.

Stein said the college redeploys existing faculty, space and resources for some new or re-developed programs to better use resources as markets change. For programs like the physician assistant master’s degree that debuted in Fall 2021, the college does not already have faculty members with the necessary credentials and must hire new faculty members. 

Downs said the college calculates a profit-loss statement for each potential revenue opportunity to see if increasing spending in additional staff, faculty or resources will yield a return on investment. 

Philanthropy

Laine Norton, vice president for Philanthropy and Engagement, said the college is also working to grow the endowment. The college can spend up to 4.5% of its endowment each year, so growing the endowment will allow the college to take out more money.

Norton said the college is also trying to connect with alumni to attain more private gifts and grants, which can offset costs that the college would otherwise carry. Downs said private gifts can fund capital projects, like the new outdoor track, and scholarships, which count toward students’ financial aid awards. The college received $4,062,304 in private gifts and grants in FY 2024.

Norton said the Division of Advancement has hired more frontline fundraisers and gift officers to reach out to alumni. She said her team is also working with the Division of Information Technology and Analytics to track and quantify their outreach efforts, analyze IC’s alumni and donor bases and identify talking points that are most successful for soliciting donations.

“Our students sell the campus and the investment themselves, and so as much as we can bring people back and represent what is already organically here, it’s really just … exposure to what Ithaca College is today,” Norton said.

Norton said her team prepares endowment reports to show how donations impact current students and the campus community.

“Private dollars are going to be a significant contributor to our differentiation as an institution,” Norton said. “It’s a really powerful and transformative way to be involved in the future of the college.”