FAFSA Delays and Our FY25 Budget
April 25, 2024
Dear SLU faculty and staff,
Typically at this time of year, I send a memo to faculty and staff to update you on the University’s budget picture as we conclude the current fiscal year and seek the Board of Trustees’ approval on next year’s budget. This year, because of unique circumstances I will explain below, this is the first of several budget updates you will receive between now and June.
In this first message on the budget planning process, I will share with you the effects of recent delays in federal financial aid processes.
FAFSA delays and their nationwide impact
More than 95% of SLU undergraduates receive some form of financial aid. Of those, 57% receive federal student aid, for which they must fill out the Free Application for Federal Student Aid (FAFSA). This year, the federal government launched a revised FAFSA. This launch has been fraught with delays and other difficulties, creating enormous uncertainty for families and for higher education institutions.
In a typical year, families of admitted first-year students receive financial aid offers from institutions by late winter and must make a decision and deposit by May 1. This year, we anticipate families will begin to receive award packages from other institutions beginning in late April and continuing through the month of May. Universities across the country have extended their deposit deadline.
SLU’s preparation and response
The response of SLU’s enrollment management division to the FAFSA situation has been proactive, innovative, and recognized in the national press. We created our own financial aid estimator form and adjusted our aid strategy. Remarkably, the number of confirmed and deposited students remained ahead of or on track with last year through the first week of April, while most of our peer institutions have seen double-digit declines in deposits for several months.
But ultimately and understandably, many families — especially middle- and low-income families — are unable to make a commitment to a university without first knowing what they would pay for their students to attend. We hope students and their families will choose SLU, and we are doing all that we can to support them in obtaining the information they need to make an informed decision.
We will continue to process aid packages as efficiently as we can, as families complete the FAFSA and the federal government corrects any application-related errors.
But along with most universities across the country: We understand that these FAFSA-related delays may affect which institutions students will choose to attend in the fall — or if they choose to attend college at all. Currently, FAFSA filing nationally is down more than 30%, and there is growing conversation that upwards of 1 million high school seniors may skip attending college this coming fall due to the ongoing FAFSA problems.
Unfortunately, we will not have certainty about the size of SLU’s first-year class until the dust settles over the next couple of months.
Effects on our budget planning and timeline
Delays in the FAFSA process will affect the timing of the University’s budget process. In order to confidently propose a budget to the Board of Trustees, we must have projections of net tuition revenue. And to estimate net tuition revenue, we must have a reasonable projection of the size of the first-year class and the amount of institutional aid we will award. Because of the FAFSA delays, we will not have the information we need to propose a budget to the trustees at our May meeting, as we normally do.
In 2020, in the midst of the uncertainty created by the COVID-19 pandemic, we called a special meeting of the Board of Trustees over the summer to discuss and approve the FY21 budget. In our discussion on Tuesday, April 16, the executive committee of the Board of Trustees concurred that we should follow a similar path this year and move the budget approval to this summer.
Navigating next steps together
The delay in the budget process will affect the timeline for items that depend on an approved budget, including updates about compensation increases, the issuing of annual faculty contracts, and the release of department or division budgets. I realize that this delay may create some uncertainty.
Please be assured of the following:
Leaders and professionals across divisions — in budget and finance, the provost’s office, human resources, and enrollment management — are working closely with deans and Faculty Senate leadership to adapt quickly and capably to circumstances as they evolve. The University Leadership Council is receiving regular updates, and the provost recently gave a detailed overview on this topic to the Faculty Senate. We will communicate with you regularly over the coming weeks and months about what you can expect as we wrap up fiscal year 2024 and finalize the budget for fiscal year 2025.
The University’s FY24 and FY25 budgets will reflect some core realities. SLU is in a fundamentally strong position, relative to many of our peers. We have a remarkable trajectory of growing enrollment and net tuition revenue. But we are not immune to the challenges that all universities are currently facing. We are projecting that we will close FY24 with a modest deficit. This is not a cause for alarm, but it is a sign that we need to learn from our experiences this year and make wise decisions to bring our budget back into balance.
Finally, as you well know: The SLU community has developed considerable skill in navigating even the most complex challenges. We know that we can and will remain focused on our mission and aligned with our values. We will employ the creativity and expertise of this community. And we will make wise — if sometimes difficult — decisions together.
Expect continued updates from me, along with the provost and vice presidents. Thank you for your continued commitment to our shared mission.
Fred P. Pestello, Ph.D.
President