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“Painful, but necessary”: Assanis asks faculty and staff to consider voluntary retirement amongst other cost-cutting measures

NewsCampus News“Painful, but necessary”: Assanis asks faculty and staff to consider voluntary retirement amongst other cost-cutting measures

Campus Pictures-Spring
​Morgan Brownell/THE REVIEW
​Assanis projected a total deficit of $228 to $288 million. The university plans, with approval from the Board of Trustees, to pull about $100 million from their endowment to offset the loss.

​Associate News Editor​

On September 24, university President Dennis Assanis and the Office of Communications and Marketing sent an email statement to students and faculty regarding the university’s financial situation.

“Our fall semester is now fully underway at the University of Delaware, and I sincerely hope that you and your loved ones are staying safe and healthy during this challenging time,” Assanis said in the statement. “The COVID-19 pandemic has tested all of us in many ways, both individually and as an institution, and I want you to know how grateful I am for your dedication to care for each other and our entire community.”

According to the statement, 90% of all courses have been adapted for a virtual format and 85% of all research projects have resumed. However, Assanis said the pandemic continued to have a negative impact on the university’s finances.

The university was already seeing enrollment challenges for first-year and returning students. These challenges caused a projected $168 million deficit. Assanis said this financial gap was due to several factors:

  1. The freeze in tuition
  2. A decline of 700 first-year enrollments
  3. Increased financial aid due to demographics changes
  4. Projected revenue losses in sponsored research, philanthropy, investments and self-supporting operation
  5. Increased pandemic-related expenses
  6. Increased investment in online course conversion and technology

“We began experiencing the impact in the spring as the fiscal year 2019-20 budget ended, and we expect this to continue through the current fiscal year 2020-21 budget and beyond,” Assanis said in the statement.

Assanis said that “without extensive mitigation steps,” the university could face a $250 million deficit. Even though the university eliminated almost all of its discretionary expenses for the fiscal year, the university had to turn to its personnel.

These cost-cutting measures include a “voluntary retirement incentive” program for staff, voluntary schedule reductions and personnel reductions.

Non-academic units will cut spending by 25% to 35% overall, and academic units will cut expenses by 15%.

Over the next several weeks, the university will implement a period of unpaid leave and temporary reductions in retirement contributions across the entire university. These details are still being discussed and will be updated as soon as possible.

According to Assanis’ statement, the fiscal 2020-21 year was approved by the Board of Trustees back in June under the assumption that everyone would be back under a hybrid format.

“We simply have no other recourse than to take painful but necessary personnel-related measures,” Assanis said in the statement. “These steps will achieve temporary and permanent savings, while creating some choices for our employees and spreading the impact over multiple measures.”

The university looked for “immediate cost-saving measures” while still preserving core employees. These measures include:

  1. Salary cuts for senior administrators
  2. Salary freezes for all employees
  3. University-wide hiring freeze
  4. Significant reductions in spending on supplies, contracts, equipment and travel
  5. Reduced spending on deferred maintenance
  6. Reduction in part-time workers

Assanis said that the reduced on-campus population caused ripple effects on the university’s budget. The total effects are still being calculated, but include:

  1. 10% decline in first-year student enrollment and a 5% decline in students returning as sophomores
  2. Loss of tuition and losses from free transferable credits for the summer and winter sessions
  3. Loss of fee revenues
  4. Increased financial aid to due to current economic downturn
  5. Residence halls at 20% capacity
  6. Maintaining isolation and quarantine spaces
  7. Increased costs of coronavirus testing, personal protective equipment and other pandemic-related measures
  8. Increased costs of campus transportation and loss of parking revenue

Factoring in all of these cost-cutting measures, Assanis projected a total deficit of $228 to $288 million. The university plans, with approval from the Board of Trustees, to pull about $100 million from the endowment to offset the deficit as much as possible.

“The pandemic has challenged the University of Delaware and our entire world in myriad ways, and, no doubt, additional challenges lie ahead,” Assanis said in the statement. “I sincerely thank each and every one of you for everything you have done and continue to do to keep yourselves, each other and our entire community healthy and strong.”

Assanis will provide more details and answer questions from the university community during a virtual town hall scheduled for Oct. 1.




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