The University of Nebraska will need to implement a bold plan to strategically redeploy its resources in order to close its budget shortfall while advancing its highest priorities of affordability, academic competitiveness and operational efficiency, under a recommended 2023-24 budget released today by President Ted Carter.
Carter’s proposed operating budget, which will be considered by the Board of Regents on June 22, is highlighted by a minimal tuition increase that will maintain Nebraska’s status as one of the most affordable institutions among its peers. The tuition increase, the first since 2020-21, amounts to less than $300 more over the academic year for most Nebraska undergraduates who pay the full sticker price.
With the tuition increase, the NU System faces an estimated $58 million budget shortfall by the end of the 2024-25 year – a figure that will only grow in future years as inflation continues to put pressure on operating and payroll costs and new revenue is expected to be muted.
Notably, that number represents only what it would take to maintain the university’s current status quo; in other words, it assumes no new investments in strategic opportunities like faculty salaries, high-priority academic programs, student services like mental health or others.
That, Carter said, means the university must act now to stay ahead of the challenge.
“This is a period of significant and rapid change in higher education, and the University of Nebraska is not immune to the challenges facing our peers across the country,” Carter said. “Our task is to separate ourselves in terms of how we respond. As president, I’m not satisfied with the status quo, and I don’t think our board or most Nebraskans are either. We will need to think differently in the context of our new realities.
“This work is not easy, but we have a unique opportunity to reinvent ourselves – to look inward and figure out how to best deploy our limited resources in ways that will ensure a highly competitive, collaborative, accessible and efficient university for our next 150 years and beyond. The Board of Regents has made clear they expect us to bring new thinking to our resource deployment decisions, and we will deliver.”
At a special board meeting called last month by Chairman Tim Clare to review the university’s fiscal planning, regents rejected the “peanut-butter” approach the university has historically taken to address budget shortfalls, noting that such across-the-board cuts could weaken the entire institution at a time when the university needs to become more competitive in areas like research, enrollment and faculty pay.
Regents instead directed Carter to build a plan that sets priorities and invests in them accordingly so Nebraska can compete in the Big Ten and nationally while making efficient use of every dollar.
In accordance with the board’s directive, Carter will present his plan at the June 22 meeting. He said he anticipates announcing immediate steps to preserve cash in the short term, as well as a framework for addressing the longer-term challenges.
The proposed 2023-24 budget lays the groundwork for that plan. Its key elements include:
- The modest tuition increase that averages 3.5% for all students. Dollar-wise, the increase is among the lowest in the Big Ten for the upcoming year. Nebraska undergraduates taking a full course load at the University of Nebraska-Lincoln would pay $270 more next year, students at the University of Nebraska at Omaha would pay $240 more, and students at the University of Nebraska at Kearney would pay $210 more. Students who qualify for free tuition under the Nebraska Promise program would see no impact from the increase.
- A 3% increase in the salary pool for non-unionized faculty and staff. Salary increases are to be awarded based on merit. Carter noted that competitive compensation is one of the most crucial ingredients to attracting and retaining talent, and that his goal is for the university to be well above the peer average in paying its top faculty.
- An additional $2 million in state funding for the Nebraska Career Scholarships program, which provide scholarships to Nebraska students in fields like health care, IT and engineering that are key to the state’s workforce growth. Carter thanked Gov. Jim Pillen and the Legislature for their continued support for the program.
- A $27 million shortfall in 2023-24, the result of inflationary pressures and lower-than-projected enrollment. NU anticipates an additional $30 million challenge in 2024-25, bringing the total shortfall to almost $58 million by the end of the biennium. Without the tuition increase, the shortfall would be close to $70 million.
Regents will also consider the 2023-24 operating budget for the Nebraska College of Technical Agriculture at their June 22 meeting. Under the proposed tuition increase, NCTA students would pay $5 more per credit hour next year.