Uncertain Times
Top priorities? Retaining students, employees and hope
by Ryan T. Blystone
PHOTO BY Tim Mantoani

hey say it’s always darkest before the dawn. Then again, maybe pie-in-the sky proclamations like that are at least partly to blame for this global economic mess.

Let’s get specific: Despite its best intentions, USD is not immune to the effects of an unsettling economy. “The biggest impact has been the decline in the fair market value of our investments,” says Provost Julie Sullivan (pictured), who has been named executive vice president, effective July 1. Those investments, through March 2009, have fallen sharply: down 29 percent since the beginning of the fiscal year.

But they also say there’s strength in numbers. And the tale that some of the numbers tell is far from dire. The university is looking at a record-setting 10,957 applicants clamoring for the 1,100 spots in the Fall 2009 freshman class, almost a 10-1 ratio. Demand for graduate programs remains steady. Student attrition is minimal. Undergraduate alumni donors have increased over last year. To date, USD has no employee layoffs.

While the university’s endowment earnings — less than 5 percent of the $300 million operating budget — have taken some hits, Sullivan points out that USD’s conservative investment strategy has softened the impact. “We’d like our endowment to be bigger, but at this point of our stage of development we’re not as dependent on it. We’re a relatively young university.”

Sullivan has spent a considerable amount of time getting the word out to employees. She held open forums in late March, including one in Spanish, to explain the university’s financial challenges and answer questions about possible future scenarios.

“We’re not hurting as much as some universities, and that’s because we don’t fit the profile,” she says. “There are three types of universities that may be suffering most.”

She’s talking about smaller universities with tenuous demand for enrollment, state universities who are at the mercy of dwindling state monetary support and universities whose operating budgets rely too heavily on endowment earnings.

“These don’t apply to us,” Sullivan points out.

But cost containment is one thing that USD does have in common with other schools. In March, employees learned that annual raises have been frozen for the 2009-2010 fiscal year. They were also urged to be much more vigilant in their spending.

“It’s probably the single largest improvement I’m asking for, and I think we’re better for it,” says Tim O’Malley, vice president of University Relations. “I think we’re more accountable. People are being more cautious and thinking twice before expending university resources.”

But USD has to keep focused on the big picture, regardless of the vagaries of the marketplace. The Student Life Pavilion remains on track to open this fall; when it does, it’s certain to be the hub of student life, a home away from home that’s been sorely needed for years. Even in an economically challenging time, O’Malley says that the building’s completion is important to the overall health of the university.

“The Student Life Pavilion and the renovation of the University Center will help us be competitive with other institutions under consideration by prospective students,” he says. “Our obligation is all about attracting and retaining students.”

Provost Sullivan knows that for many students considering USD, their ultimate decision will hinge on financial aid assistance. While more money will be made available for financial hardship appeals, the impact of the economic climate on the institution itself remains uncertain.

“As people learn what kinds of financial aid packages we can provide, the big test is going to be what kind of loans or support they can get for their families,” she says. “We’ll have to wait and see how that’s all going to translate to students actually coming to USD.”