Financial sustainability practiced in academic programs

Ellie Phillips

The fiscal sustainability of Grand Valley State University is a complex topic that involves several factors, including state funding, tuition, enrollment and program spending. Despite all the complicated processes of proposing budgets and analyzing priorities, the staff of GVSU makes it all work.

What many people may not know about program funding is that it is not allocated by the enrollment of students in any particular program.

“University funding is not allocated by student major,” said Philip Batty, director of Institutional Analysis. “Academic departments are funded based on the cost of fulfilling their role within the university. That role includes teaching and advising students in their own majors, but also teaching and supporting students who are not majoring in the discipline.”

This cooperation of departments keeps a fiscal balance between programs like engineering and nursing, which cost more than they bring in, and programs that do the opposite, like biomedical science and chemistry.

“There are a number of (programs) that really run very efficiently,” said Joe Godwin, associate vice president for Academic Affairs. These efficient programs bring in more revenue than they cost the university and balance out the effects of the less “efficient” programs.

Revenue brought in by the different programs comes primarily from tuition, but more expensive programs don’t necessarily make up the cost in tuition.

The relationship between nursing and math demonstrates the collaboration and sustainable nature of GVSU programs. Due to the demands of the program, there are fewer students in nursing classes than there are in math classes. Students of nearly every major are required to take at least one math course, whereas only nursing students are required to take nursing classes. Thus, the math program brings in more tuition money than the nursing program, even though nursing costs more money.

This concept may be difficult to understand, but in reality, it is very simple. If 20 students enrolled in one three-credit math class with the current tuition rate ($420 per credit hour for lower division Michigan residents), the revenue for the math department generated by these students would equal $25,200. If five students enrolled in three three-credit nursing classes in that same semester, with the same tuition rate, the enrollment would generate a revenue of $18,900. The math department would bring in $6,300 more in tuition revenue than the nursing department, even though the nursing department costs more money to run.

This situation requires that revenue generated by more “efficient” programs, like math, will partly provide the funding for less “efficient” programs.

In the end, Godwin said the budget is decided and balanced at the beginning of every fiscal year, though some surprises like more students enrolling or higher utility bills do happen when the fiscal year begins.

Since GVSU is not in a position where it can easily spend more than it has, the programs are asked two things: To do more with less and to request funding they need, in an order of priority. This helps the university to decide what things need how much money and how to distribute the money brought in by efficient programs to the programs that are less efficient. Between that system and state funding, GVSU maintains a balanced, financially sustainable academic program budget.

For more information on GVSU’s finances, visit
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