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Loyola CFO Outlines University Finances Ahead of Annual Budget Recommendation

Griffin Krueger | The PhoenixWayne Magdziarz, senior vice president, chief financial officer and chief business officer at Loyola, highlighted both challenges the university faces as well as signs of growth in the upcoming fiscal year.

Wayne Magdziarz, senior vice president, chief financial officer and chief business officer at Loyola, laid out the current state of the university’s finances at a series of three town hall presentations from Nov. 10-15.

The presentations came just weeks before the proposed budget for the 2024 fiscal year, which encompasses the 2023-24 school year, is presented to the university’s Board of Trustees for approval when they meet in December.

Magdziarz focused on challenges the university has faced during the 2022 fiscal year as it has emerged from the COVID-19 pandemic, looked ahead at the upcoming year’s budget and laid out steps he said the university needs to take to maintain a strong financial position. 

It was the first time Magdziarz and the university have held public meetings to discuss Loyola’s finances with the university community in three years. 

Magdziarz highlighted successes in the growth in the university’s enrollment and its transition out of the pandemic. He said he was optimistic the university will be able to overcome the issues it faces during the next few years. 

“If you remember one thing, remember this, the university is coming at these challenges from a strong financial position,” Magdziarz said during the Nov. 15 presentation. 

As a result of the COVID-19 pandemic, Loyola saw a $99 million decrease in its revenue due to decreased enrollment and the closure of residence halls, The Phoenix previously reported. 

The pandemic shortfall has almost entirely been restored, Magdziarz said. During the presentation, he said starting in the 2022-23 school year residence hall occupancy, a crucial source of income for the university, will return to pre-pandemic levels. 

He explained the decision to close residence halls led to a $95 million decrease in Loyola’s bottom line. During the 2023 fiscal year, when residence halls return to max capacity, Magdziarz projects the university will make $93 million in revenue from room and board fees. 

The proposed operating budget is approximately $635 million, according to Magdziarz. In his forecast of the 2023 fiscal year, Magdziarz projected Loyola would make $392 million in revenue from undergraduate and graduate tuition fees. He said the university expects to receive an additional $48 million in grants and $42 million in donations. Magdziarz projected $65 million in revenue from other sources, which include conference services, retail leases and parking.

In terms of forecasted expenses, nearly half of expected revenue will go towards the salaries and wages of faculty and staff. Magdziarz said the university will spend $310 million paying its employees, with an additional $80 million going towards faculty and staff benefits. 

He said the university expects to pay $58 million in depreciation of the university’s assets and $9 million paying interest on debt. Another $175 million in other expenses include department budgets, utilities and insurance.

Magdziarz said Loyola’s endowment is currently sitting above $1 billion dollars due to growth in the markets, meaning higher yields for Loyola’s endowment investments. This does not mark a significant increase or decrease in endowment funding from where it stood last year. In 2021, Magdziarz told The Phoenix the university’s endowment was around $1 billion dollars, a figure which is lower than other similar sized universities. 

Due to the smaller size of Loyola’s endowment, the university is a tuition-dependent university, meaning the majority of scholarships students receive are funded through tuition dollars instead of from endowment funds. The proposed 2024 fiscal budget included a $15 million increase in scholarship support, although only 4% of scholarships will be funded through the endowment. 

Magdziarz previously told The Phoenix annual tuition increases are inevitable. He said he and the financial services office try to be mindful of student debt when raising tuition. He said the university has maintained a 10-year running average for tuition increases of 3.6% and will not go 1.5% above or below that figure. 

In the past, tuition increases have been announced shortly after the start of the new year. Magdziarz did say there will be no tuition increase for students at Arrupe College. 

Magdziarz said the university has maintained strong undergraduate enrollment during recent years, seeing a 3.5% increase from fall 2020 to fall 2021, but he said this growth will level off during the coming years due a lack of capacity for larger classes. 

The university saw a large 7.5% increase in graduate student enrollment from fall 2020 to fall 2021, something Magdziarz attributed to the reduced labor market created by the pandemic. This growth has not been sustained however, and due to the now hot labor market graduate enrollment for the coming school year has decreased significantly, projected graduate enrollment will see an 8.5% decrease for fall 2022, leading to a $5 million decrease in university revenue. 

Magdziarz repeatedly returned to the issues decreasing graduate enrollment could create for the university. He said in the coming years the university may have to rethink some of the graduate programs it offers and how resources for graduate programs are allocated.

“The academic community at the university has to come together and decide what three or four things we want to be known for,” Magdziarz said. 

Another issue Magdziarz highlighted was the unusually large number of undergraduate students who did not return to Loyola at the beginning of the 2022-23 school year. The unexpected number of students who did not return impacted the university budget by $9 million, according to Magdziarz.

However, Magdziarz said there are some early indications this could have been an isolated occurrence, and undergraduate departures could return to normal levels next school year. He also said Loyola has seen a decrease in its transfer pool. 

Another issue the university has faced has been difficulties in the recruitment and retention of faculty and staff. He said the university is currently trying to fill 180 positions and has struggled with turnover in recent months. While he acknowledged it was a difficult message to deliver, he told attendees some unfilled positions may have to be cut and the associated duties and responsibilities reassigned. 

“We are at a critical time to make sure we don’t overextend ourselves and end up like other universities,” Magdziarz said. 

The proposed budget will have the university pay $4.3 million less in interest. The university paid off $57 million in June, bringing the university’s owed debt below $300 million for the first time in over a decade.

The university borrowed a significant amount of money to fund campus improvement projects including Damen Student Center and Norville Athletic Center, Magdziarz said. Magdziarz said the “building spree” the university has been on over the last decade will have to come to an end.

Correction: A previous version of this article incorrectly stated the university plans to pay off debt during the coming year. The article has been modified to correct this error.

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