07/20/2023
By Steve O’Riordan

I’m writing to provide additional details following Chancellor Julie Chen’s message yesterday outlining the steps UMass Lowell needs to take to ensure our future success.

Our Financial Position
In May the UMass Board of Trustees approved UMass Lowell’s operating budget.

Among the revenues and expenditures we are looking to balance include:

  • the end of one-time pandemic-related federal dollars,
  • growing grant and research external funding,
  • enrollment changes and corresponding tuition and residence hall revenues,
  • significant increases for salaries and benefits, and
  • inflationary pressures.

Even with a 6% increase in tuition rates from Fall 2019 to Fall 2023, net tuition is down 5%. The reason? This May we graduated the last of our large classes recruited pre-pandemic, which are replaced with smaller COVID-era cohorts that continue to matriculate, entering their junior and senior years.

Our incoming classes continue to grow year over year, thanks to the hard work of so many in Admissions and across the campus, but it will still be several years before the pandemic’s financial impact is behind us.

We’re also experiencing the impact of inflation on salaries and benefits. UMass Lowell works hard to prioritize fair and competitive wages in collaboration with our unions and will continue to do so. But there is a financial reality that comes with that commitment.

At 58% of all university costs, salaries and benefits are UMass Lowell’s largest expenditure. And those costs are increasing by 8% and 11% respectively. The state provides just over half of that increase (54%), leaving the remainder to the university to fund.

Additionally, costs of goods and contracted services, utilities, construction materials, course materials, computers, and lab equipment and chemicals are all increasing.

The combination of slow growth in general operating revenues and significant increases in costs has the university looking at a budget gap of some $37 million that we need to close. And the sooner we act, the more flexibility we have to do so.

Our Next Steps
As the chancellor said in her video message – and as each of you has experienced in the last several years – slicing budgets thinner and thinner each year is not a sustainable solution. FY24 department budgets have been reduced 15% from last year.

This is the reason for the campus-wide conversations that will begin in the coming weeks. In alignment with the 2028 Strategic Plan, we will be redirecting resources to key priorities, such as enrollment marketing and revenue generating ideas. We will also focus on 

  1. necessary structural changes and reorganization efforts, 
  2. eliminating repetitive and duplicative efforts and
  3. reducing and restructuring campus services to reduce and right-size our budget.
Service impacts will be felt across the campus, including via administrative support activities, response times from Facilities and Information Technology, support for events and conferences –especially during nights and weekends, and reductions to transportation services.

In her message, the chancellor identified a number of efficiencies and savings we’re already implementing, including reducing our office footprint and increased academic course efficiencies. Additional ideas for savings or revenue generation from the campus community are encouraged and can be shared anonymously.

VSIP & Personnel Impacts
Despite our efforts across all other areas of the university, the FY24 budget gap will require difficult personnel decisions.

The university recently froze or eliminated 56 vacant positions. And the Executive Cabinet will continue to review all personnel options through our essential hiring review process to determine how best to deploy our human resources towards the goals outlined in the 2028 Strategic Plan.

In addition, UMass Lowell will be rolling out a Voluntary Separation Incentive Program (VSIP) to all employees, similar to the one offered during the pandemic. Human Resources will share more information in the coming days. The number of employees who elect to utilize the VSIP program will determine the scope of any additional personnel actions the university needs to take in the months ahead.

In her message the chancellor laid out clearly the new reality of higher education and the post-pandemic danger that awaits universities that don’t elevate to distinguish themselves from their peers and make clear the value of their degrees to students.

This is a difficult moment for UMass Lowell, but by quickly confronting these challenges and making hard choices now, we will position ourselves to thrive in the years ahead.

Thank you for everything you do for UMass Lowell and its students.