University of Nebraska President Ted Carter on Thursday explained a two-pronged strategy the university system will undertake beginning this year to close a $58 million budget shortfall at a meeting of the Board of Regents.
While NU will take immediate measures to reduce its structural budget deficit, Carter told regents the university would also begin reshaping itself, pivoting to become more aggressive in recruiting students and faculty, growing its research spending and realizing operational efficiencies.
In the short term, NU will implement a systemwide hiring freeze for all non-faculty positions, including a “hard freeze†on any new administrative hires, and require chancellor approval for any new staff hires.
Chris Kabourek, vice president of business and finance, told regents the university will also withhold 2.5% from each department’s operating budget per quarter in the coming year in an effort to avoid dipping too far into NU’s cash reserve.
The non-personnel rescission, which would affect money allocated for supplies, purchasing new equipment and travel reimbursements, could trim as much as $10 million from the deficit.
"We think it's the most prudent action to take at this time to give us a little runway," he said.
But Carter said he also didn't want the university to be too hyper-focused on budget cuts and what it was unable to do, which he described as playing defense instead of embracing a "growth mindset."
The former naval aviator now in his fourth year leading NU outlined a five-point strategy for the university to reinvent itself to remain competitive in higher education and continue serving the state's interests.
"Nebraska needs its only public university to be strong and growing," Carter told regents.
Carter said his first goal is to double down on efforts to recruit more students to NU's campuses, which he said would require reinvesting funds from other areas of the university.
One potential plan Carter described includes creating a program that pays stipends to students that fan out across the state to draw more students to NU's campuses.
He pointed specifically to the 31 high school students who recently scored a perfect 36 on the ACT college-entrance exam, noting that only 12 said they intended to attend NU, a number he said was "not satisfactory."
The university also will look at setting up a program that hires 10 university seniors or recent graduates to serve as ambassadors at public events in order to raise the university's profile throughout the state, Carter said.
Another big focus Carter detailed was a desire for NU to regain entry into the Association of American Universities — the University of Nebraska-Lincoln was booted from the organization in 2011 — which would signal Nebraska is "among the best of the best" in the country.
To do that, Carter said administrators would look at how UNL and the University of Nebraska Medical Center could combine their research expenditures together — he was careful to note that did not mean the campuses would be merging, but would reflect an administrative realignment — that would immediately move NU's national research ranking from 117th to 66th.
"In other words, overnight we become a national player," he said.
Carter's plan also calls for a review of academic programs to look for redundancies across campuses by eliminating overlaps or exploring new opportunities for collaboration.
NU also will examine back-office functions like payroll, human resources, compliance, government and public relations to look for efficiencies across all campuses. A similar effort undertaken several years ago consolidated offices dedicated to procurement, facilities and information technology, which ultimately saved $25 million.
Carter acknowledged the university would be "cutting into the bone" in several areas, but added: "I do believe there are more opportunities to explore."
And NU also could implement a new “zero-based budget†model for all non-academic units, which would require those departments to justify every dollar they spend in each budget year.
University leaders will build a plan to achieve those goals by the end of the year, with the aim of implementing them before the end of the next budget biennium, Carter said.
"By the end of June 30, 2025, we will not only realize $58 million in savings, we will be back on offense and we will be a national player," he told the board.
The announcement of both the new strategy for NU as well as the immediate cost-cutting measures comes three weeks after Carter and Kabourek walked through the financial challenges the university system faces.
At the May 31 briefing, the administrators said a combination of minimal growth in state appropriations, dwindling tuition revenue resulting from enrollment losses and rising expenses tied to salaries, benefits and inflation created the deficit.
Along with the cost-cutting measures outlined Thursday, NU also plans to charge students 3.5% more in tuition in order to generate more revenue in support of its operations.
Regents on Thursday approved the first tuition hike in three years for all NU students.
The increase breaks down like this:
* UNL students will pay $268 per credit hour next year, a $9 increase over the current cost. UNL students on average will pay $270 more in tuition in 2023-24.
* University of Nebraska at Omaha students will pay $243 per credit hour, or about $8 more per credit hour in 2023-24. On average, UNO students will pay an additional $240 in tuition.
* University of Nebraska at Kearney students will pay $216 per credit hour, or about $7 more than the existing tuition rate. UNK students can expect to pay $210 more for a full course load.
* Students at the University of Nebraska Medical Center will also pay 3.5% more in tuition next year, but the costs of each academic program vary.
* Nebraska College of Technical Agriculture students in Curtis will pay $5 more per credit hour next year, or about $144 per credit hour.
Carter said Thursday that currently there is no proposed tuition increase for the 2024-25 school year.
"We want to see what this plan will do to get us back on track, and we'll be able to reevaluate that over the coming year," he said.