On Nov. 22, several CAHSS chairs and directors passed a motion to deliver a letter of “no confidence” to Chancellor Jeremy Haefner’s administration. That motion sparked a back-and-forth on budget issues between CAHSS department chairs and the Chancellor’s Office.
The motion, which 20 CAHSS chairs and directors have now signed, alleges that Chancellor Haefner has “promoted a pattern of fiscal mismanagement… initiated budget processes that undermine the capacity of [CAHSS]…and weaken the core strengths of and academic integrity of the College and the University of Denver.”
On Dec. 13, the chairs and directors at CAHSS again met with Chancellor Haefner to discuss their concerns. On Jan. 10, the chairs and directors of CAHSS again wrote to Chancellor Haefner to reaffirm their concerns. They also presented three demands and asked for a written response from the Chancellor.
The signatories demanded that new requirements for meeting operating margin targets be paused and that a pedagogy-informed review of data be instituted to reduce those operating targets. Finally, they asked for the inclusion of CAHSS representatives in the crafting of the university’s budgetary vision and allocation decision-making process.
The demands come as the university faces an impending financial crisis.
Graduate enrollment, a key marker of the university’s financial welfare, initially rose during the pandemic. But when the economy rebounded, potential students were pulled back into the workforce. As a result, the university saw significant drop-offs in graduate enrollment in 2023 and 2024, which meant a substantial drop in revenue.
Graph courtesy of DU
Additionally, other compounding factors worsened the problem. A slow FAFSA rollout last summer meant fewer students applied for financial aid and went to college. Studies also show that more and more students are “opting out” of higher education because of worries related to their mental health or because they don’t view it as worthwhile.
At the same time, admissions at public colleges around Colorado rose this year. Schools like the University of Colorado Boulder, the Colorado State University System’s three schools, Metropolitan State University of Denver, and Colorado Mesa University all had higher enrollments than the year prior.
Chancellor Haefner said that students seem to be gravitating towards larger public flagship universities where they can get the “big school experience.” However, there are also other draws, like the addition of Head Football Coach Deion Sanders at CU Boulder, which increased that school’s applications.
Unfortunately, DU is not benefiting from those trends, even after winning the NCAA Ice Hockey championship last year.
To complicate the problem, recent enrollment problems are likely only the beginning of the “enrollment cliff,” a forecasted fall in college-aged students caused by falling U.S. birth rates since the 2008 recession. What we are experiencing now could be the beginning of the cliff, but we likely won’t see its full effect until between 2025 and 2029.
Financially, if enrollment issues continue, the University has a tough fight ahead of it. The university’s operating margin, revenue minus expenses, has fallen from $51 million in 2022 to $0 in 2025. The administration also projects the university to run a deficit of $3 million in 2025 and $29 million in 2026.
Graph courtesy of DU
In response to these changes, the administration told CAHSS it had to achieve new operating margin targets in order to help the university deal with its budget problem. Clarion articles in the previous fall quarter found that many professors in CAHSS expressed worry that these cuts would endanger the academic rigor and possibly even the survival of entire departments.
Although CAHSS demanded on Jan. 10 that the new target operating margins be paused, this seems unlikely. In an interview on Thursday, the Clarion asked the Chancellor whether those demands were likely to be met.
“We had a really engaged conversation yesterday,” said Haefner. “What I’ll explain to anyone about the change in the budget model is it’s not really a change; we have always used the operating margin; we’ve always used this difference between revenue and expenses, working with each unit.”
“The operating margin is a model that’s here to stay; it is something that we have needed to do for years,” he added.
When the Chancellor’s office wrote a response letter to CAHH’s demands on Jan. 17, he made a similar argument.
“The operating margin concept has been used for decades in the budget process… operating margin is a core aspect in evaluating the universities operating performance…” wrote Haefner.
Outside financial agencies, like credit firms, evaluate colleges’ financial health using the operating margin indicator. A weak operating margin could cause credit rating firms to give DU low ratings, which could ultimately hurt the university’s ability to borrow and repay debt in the future.
The Clarion asked Haefner if CAHSS might have to cut programs that could damage the student experience to achieve its new required operating margins.
“We are certainly trying not to make those kinds of cuts, the student experience is at the heart of the university,” said Haefner. “What we are trying to make sure happens is that progress towards degrees is not impacted, the ability for students to have small class sizes is important to us, what [the class size number] is, is going to be part of the conversations that we have to have.”
Additionally, Haefner considers the potential to reverse cuts if the university rebalances its operating margin and begins to make money again.
In fact, the administration is entering a new planning period over the next six months in which it will create a plan to drive new student demand.
“We are calling it ‘DU Forward’, and it’s all about community-identified initiatives that will drive student demand, particularly focused on excellence, on bold innovation and on distinctiveness,” Haefner said.
This new plan will be discussed in a town hall meeting on Feb. 11, where the community will have a chance to engage with the university’s ideas.
Additionally, during a town hall meeting hosted by the Chancellor and Provost on Jan. 27 about DU’s financial plan for the next five years, a “steering committee” was announced which will hold public sessions to allow the community to provide input.
However, a separate question is whether the university’s strategy to avert a deficit will succeed. Reducing expenses could become the new normal until enrollment bounces back.
When asked if he understood why professors are feeling anxious, the Chancellor said that last quarter’s layoffs, although “small in number,” may contribute to staff and faculty’s fear about job security.
While part of the university’s strategy to save money is eliminating currently vacant faculty and staff positions, it is unclear whether there will be more layoffs in the future, especially if the deficit worsens or there are fewer students to teach.
Previous Clarion articles showed some faculty members were worried about whether their departments could survive substantial cuts or that they might be sunsetted altogether.
“This is one of our distinctive features is that we have a super strong liberal arts background, and humanities are core to that…I think faculty naturally worry about, well, in this time of change of enrollment, are some programs going to be canceled, phased out, sunsetted… This is just the worry they have. It’s not that there’s a plan to do that. We are analyzing programs to make sure that they have the enrollments we need to move forward, and how can we help them improve, but that’s part of the anxiety too,” said Haefner.
Over the last few weeks, professors from around campus have been coming to the Chancellor and presenting ideas about how they could improve their departments.
When asked how professors could be expected to improve their program and attract more enrollment while simultaneously cutting expenses, Haefner said that it’s a difficult situation that professors will have to deal with as the University struggles to maintain its bottom line.
“I’m trying to be upfront. We are all trying to be upfront. We know that these are challenging times and there’s a heightened sense of anxiety, and yet we’re asking now that people come together and spend more time being engaged around this process. But the hope is, and the intention is that they see opportunities where they can really be engaged, and they see where their contributions can really have an impact,” said Haefner.
One key area in which the university’s administration hopes to increase enrollment is in the fields of science, technology, engineering and mathematics (STEM). The 2022 projections of the U.S. Bureau of Labor Statistics forecasted a higher growth of STEM occupations vs. non-STEM occupations in the U.S. economy until 2032.
The university has planned for several years to build the new “STEM Horizons building,” near campus, a multi-million dollar investment in needed STEM infrastructure at DU to improve research opportunities for current students and ultimately increase enrollment in the future.
Hawfner rejected the idea that the university would change its identity and prioritize STEM over liberal arts.
“I think we want both; I think our STEM graduates need a strong grounding in the liberal arts that will distinguish them from other universities,” said the Chancellor. “But with the new STEM Horizons building, I do hope that we are able to leverage that and increase the number of students interested in it, but not at the expense of our liberal arts foundation and our humanities. I would like to grow in STEM and health, and that raises all boats in my opinion because they have to take general education.”
The latter two demands from CAHSS issued on Jan. 10 relate to the representation of faculty on budget committees. Budget committees are examples of avenues in which faculty can give input to DU’s administration which is in charge of crafting budget recommendations to send to the Board of Trustees.
The Chancellor mentioned the University budget advisory committee is currently an avenue for professors to give input on the budget. Established three years ago by Provost Clark, the committee is intended to be an “interactive discussion of the budget” and includes chairs and directors of different departments at DU.
While faculty on the committee can provide input to the administration, it cannot make decisions on the budget on its own.
“At the end of the day, there is a responsibility that the chancellor, provost, and chief financial officer have in recommending [a] budget to the university,” Haefner said. “But that process, and I can’t emphasize this enough, of how much we will rely on shared governance to get their input, to realize that they have to understand some of the decisions we have to make, and still work through those in this collaborative process.”
Ultimately, instead of focusing on creating new avenues for faculty input, the administration seems to want to focus on increasing the interaction and dialogue through existing avenues. A main problem, said the Chancellor, is the lack of conversations and opportunities to share voices.
“I think the structures are there, but we can always do a better job at making sure that shared governance happens inside those structures,” said the Chancellor.
The Chancellor will continue meeting with CAHSS about their concerns, though whether any serious changes will be made to the university’s current path forward is unclear.
