Hillsdale College’s plan to cut its operating budget by 5.5 percent next year may seem sobering, but its ability to do this without affecting student life highlights the school’s financial strength.
Put in context of many other schools of a similar size and mission, Hillsdale has positioned itself in a much more positive place to withstand fluctuations in its funding.
Vice President for Finance Patrick Flannery decided to cut the budget because of the struggling stock market, which could impact revenue from our endowment. The endowment constitutes about a third of the college’s revenue, with student tuition and gifts also making up roughly a third each. While it’s frustrating that so much of the college’s budget relies on a shaky source like the stock market, this is a better option than what many other schools have.
For example, Ohio Christian University, a small, private school with about 3,000 more undergraduate students than Hillsdale relies much more heavily on student tuition. OCU’s Vice President of Finance Rob Hartman said this makes him jealous of Hillsdale’s revenue structure. “There are parts of Hillsdale that I love, and one of those is its large endowment,” Hartman said. “Because we’re more tuition-driven, if we’re not growing we have to cut the budget.”
In contrast, Hillsdale has the freedom to keep its enrollment constant without worrying about budget constraints. Also, our enviable endowment is a major contributor to Hillsdale’s ability to reject government funds — another characteristic Hartman said OCU hopes to emulate.
While this round of budget cuts hasn’t been easy on the administrators and department heads who are forced to reduce already tight budgets, the decision signals admirable prudence.
Director of Athletics Don Brubacher said he believes Hillsdale’s caution translates to a better-managed institution. While many other schools will wait until they are already in the red to begin cutting their budgets, Brubacher said that Hillsdale anticipates potential cutbacks and makes decisions before it’s in deep trouble.
Hillsdale professors seek to teach students how to pursue the good through our liberal studies, and this is an example of Hillsdale’s leaders showing us how to put those lessons into practice.