CFO and Provost Discuss Finances at Town Hall

Loyola CFO Wayne Magdziarz and Provost Margaret Callahan discussed enrollment and the university’s finances at a Sept. 27 town hall.

Provost Margaret Callahan and Chief Financial Officer Wayne Magdziarz held an academic and financial town hall for university faculty and staff Wednesday, Sept. 27, where they shared enrollment numbers, financial status and larger trends.

In the packed Regents Hall at Lewis Towers, Callahan began with a rundown on entering students for the 2023-24 academic year.

Loyola welcomed 2,970 new undergraduate students, 106 more new undergrads than last academic year, according to Callahan. During the Sept. 29 town hall, President Mark C. Reed said this is the seventh year in a row the university has set a record for undergraduate enrollment, The Phoenix previously reported. Loyola also admitted 47 students from Arrupe College, the university’s two-year associate degree program, according to Callahan.

There are 318 new transfer students, fewer than last academic year. Callahan said this correlates with declining enrollment at community colleges. The university previously expected about 500 transfer students every year, but that range has dropped to about 325-350, according to Magdziarz.

Out of all new students, 50% are students of color and 43.4% are from outside Illinois, Callahan said. 

In total, Loyola has 11,708 undergraduates and 4,951 graduate and professional students. First and second-year retention sits at 85%. The four-year graduation rate is 68%, while the six-year rate is 72%, according to Callahan.

Undergraduate enrollment has increased by 75% over the past 10 years, Magdziarz said. In the same period, the number of students in Loyola’s master’s programs is down by about 1,000 students. Magdziarz said Loyola’s market share in master’s programs hasn’t changed in 10 years.

One of Magdziarz’s recommendations for the university’s continued success was an evaluation of the programs it offers. He said Loyola should prioritize academic programs over other offerings, looking at what it can afford to do and focusing on programs it wants to be known for.

“In five years, an undergraduate student that’s looking for a program in X knows that there’s two good ones in the U.S., and Loyola Chicago is one of them, maybe it’s the best one,” Magdziarz said. “That’s where we need to put our resources. If we continue to try to compete with everyone out there, we’re gonna continue to disperse all the resources that we have.”

Magdziarz said the demographic cliff of 2025 is inevitable. This is a drop-off in U.S. birth rates which began during the Great Recession of 2008, according to Pew Research Center.

The demographic cliff will push the university to make changes to its marketing and programs, Callahan said. This could include broadening Loyola’s outreach beyond the Midwest and waiving standardized test requirements, Callahan wrote in an email to The Phoenix.

“The fact is, there are fewer high school students that are going to college,” Callahan said. “We need to be very intentional, very deliberate about the programs we offer, how we recruit, so that we don’t fall victim to the demographic cliff.”

In addition to the new students welcomed this year, Loyola hired 95 full-time faculty across all disciplines, Callahan said. Of those, 34 are in the College of Arts and Sciences and 14 are in the Quinlan School of Business — Loyola’s two biggest schools, according to Callahan. 

Out of new faculty who reported race on their applications, 49% are people of color, according to Callahan.

“A deepened commitment to diversity is important because our diverse student body expects it,” Callahan said. “Our antiracism practices are manifested through our campuses and all the work that we do and within our programs. And it is driven by leaders who not only understand the importance of that, but understand the urgency related to that as well.”

There are multiple leadership positions which will be filled over the course of the academic year, Callahan said. A new dean for the School of Education is expected to be hired this semester. Deans for the School of Communication and the School of Social Work are expected to be found early spring, and a dean for Professional Studies is expected to be found by the end of the academic year, according to Callahan.

Callahan said she expects to leave the role of provost after June 30, 2024 and return to her faculty position as a professor in the Parkinson School of Health Sciences and Public Health, she wrote in an email to The Phoenix. The search for the university’s next provost is underway and is being led by a committee of admin and faculty, according to Loyola’s website.

The university plans on expanding its research infrastructure for faculty and students, Callahan said. Research is a high-impact practice — as is engaged learning and internship experience — which contributes to greater student success, according to the American Association of Colleges and Universities.

Funding for research has come internally and externally. The endowed Schreiber Venture Fund for Social Enterprise is a grant for student-faculty research projects that promote social change, Callahan said. The U.S. National Science Foundation offers funding for science and engineering research.

Research spending grew from $32.9 million in 2019 to $38.9 million in 2023, Callahan said. Most of this spending comes from the Health Sciences Campus, which takes on large-scale biomedical projects, but the Lake Shore and Water Tower campuses’ spending increased from $6.7 million to $8 million in the same period, according to Callahan.

Magdziarz gave a rundown on the university’s finances for fiscal year 2023 (FY23), which ran from July 1, 2022 to June 30, 2023. 

Loyola’s operating budget for FY23 came to $635 million. It had a $20.7 million surplus, which will be used to repay debts and pay into the Loyola University Employees’ Retirement Plan, a pension plan frozen in 2004, according to Loyola’s website. FY23 marks the 23rd year Loyola has brought in more money than it has spent, Magdziarz said.

“$20.7 million may sound like a lot, but it is 3% of our operating budget,” Magdziarz said. “So those of you who are responsible for your finances, hopefully you know that a 3% margin is nothing to necessarily start to celebrate. Nevertheless, it’s a margin that many places out there today would welcome.”

The university is currently holding $250 million in debt, all of which accrues interest at a fixed rate of 3.26%, according to Magdziraz. Loyola paid $74 million towards its debts in FY23, Magdziarz said.

Loyola’s endowment fund, a long-term investment fund managed by Chief Investment Officer Katharine Wyatt and her team, sits at more than $1 billion, Magdziarz said. It gave the university returns of 8.2% during FY23, an improvement over last fiscal year.

While revenue grew by 6%, expenses grew by 7%. The additional money generated by a larger first-year class went back to operating costs, Magdziarz said. Net tuition fell by 6.5% due to an increase in scholarships and a decline in enrollment in master’s programs. 

Of the expenses that increased, 65% went to salaries and benefits for faculty and staff. The university spent $25 million more on salaries and benefits than it did in FY22, according to Magdziarz. He said the university has provided compensation increases every year for 20 years, except during the COVID-19 pandemic.

The university has continued to fund a separate pool of money for faculty and staff equity adjustments. This is a fund from the provost’s office which adds to base salaries in the case of promotion or other adjustments, Magdziarz said.

During the pandemic, university contributions to the 403(b) retirement plan were suspended. While it saved Loyola $20 million at the time, Magdziarz said there is no plan to suspend contributions again any time soon. 

Addressing student concerns about tuition increases, Magdziarz said there will always be increases, but the university tries to make them as small as possible. He told The Phoenix in an interview he and his team spend more time on deciding tuition increases than any other budget issue.

“We have to justify every tenth of a percent on the tuition increase side,” Magdzriaz said. “Because our objective is always to keep it as small as possible, while at the same time recognizing that the other side of the ledger, on the expenses to run the place, the expenses to attract and retain quality faculty and staff, are the opposite — pressure is going in the opposite direction.”

On the infrastructure side, Magdziarz said Loyola has spent $8 million on stormwater resistance infrastructure at the Lake Shore and Health Sciences campuses, with a further $6 million to be spent this year. An increase in damaging rainstorms has flooded Lake Shore Campus buildings in the past, The Phoenix previously reported.

Loyola also acquired Arcade Residences, a 58-unit apartment and retail building near campus, in September, The Phoenix previously reported. Magdziarz said the building was not purchased from the operating budget, but from the university’s short-term cash reserves. 

“Those of you who walk around Lake Shore Campus, you’ll see the ‘legacy residence halls,’ and you know that there are a few that are tight,” Magdziarz said. “They’re at the end of their useful life. So we have several options that we can do when the time comes to decommission them. We can tear them down and rebuild, or we can acquire.”

Magdziarz said it’s cheaper for Loyola to buy existing buildings than to build them new. With Arcade Residences’ proximity to campus, Magdziarz said it could be turned into a student-only dorm once the campus master plan is done. The master plan will determine the development of all three Loyola campuses, according to Reed at the Sept. 20 town hall.

Magdziarz said the university is in a very good spot financially, but it will take hard work to keep it there. The next finance and academics town hall will be in the spring.

Maddie Franz

Maddie Franz