Housing Complex

Facing a Budget Crunch, Howard Makes Cuts

A rendering of the two coming Howard student residences on 4th Street NW.

Howard University may be building two big new dorms at a cost of $107 million, but don't take that to mean that the school is flush with cash.

According to an internal Howard staff memo from Jan. 31, the university is making a few cuts to help tackle a "significant budget challenge." The memo, signed by Howard President Sidney Ribeau, cites "a significant decrease in student enrollment in the fall semester, along with other revenue shortfalls and an anticipated reduction in Howard's federal appropriation due to sequestration." About 400 students, the memo says, did not return to the university in fall 2012, with most of them citing financial challenges.

"It became clear that in spite of the contingency funding, we will not be able to balance the operational budget without implementing major cost saving initiatives over the final two quarters of the fiscal year (January to June 30, 2013)," Ribeau wrote in the memo.

The memo lays out four steps the university is taking to cut costs:

  1. Reduction in operating costs through a limited closure of the University during spring break (March 11-15, 2013).
  2. Reduction of salaries for senior level administrators of 5% for the duration of the fiscal year.
  3. Temporary suspension of the University's contributions to the 403(b) Savings Plan for all employees for the duration of the 2013 fiscal year (March 1 – June 30, 2013).
  4. Restructuring and modification of the University's healthcare benefits programs which will continue to provide a comprehensive benefits program as a critical investment in employees and retirees of the University and Howard University Hospital, while identifying efficiencies and cost savings where appropriate. Revisions will be effective April of 2013.

Howard spokeswoman Kerry-Ann Hamilton says these changes shouldn't be taken to mean that Howard is on poor financial footing. "Howard’s finances are stable, its endowment is secure, and its budget and cash flow are actively managed," she says, though she declined to provide financial figures. "However, the national recession is requiring Howard and most colleges and universities to be much more efficient, either through operational reductions and or a leaner infrastructure."

According to Hamilton, "applying new managerial approaches and modifications to our business model will result in approximately $10 million per year of annual savings."

Hamilton says the dorm construction and the operational budget have separate funding streams, with the former coming from bonds, so the cuts won't affect the construction plans. The dorms, she says, are a necessary investment in the university's future, given that the last residence hall on campus was completed in 1994.

Clearly, the dorms are a necessary upgrade and should help attract and retain students. But with the current financial crunch, turning university land over to private developers in exchange for cash, a la Howard Town Center, must seem like a pretty good alternative right about now.

  • coco d

    There is not only the vast amount of empty valuable real estate around the University itself, (off Ga Ave and Sherman) there is also the large dorm located at 16th and Euclid right in front of Malcolm X Park that seems like it could be sold and redeveloped to a private developer. Odd location for a Howard dorm being so far and all. Seems better served for $1 Mill condos.

  • IAmNotALiberalDemocrat

    LOL@coco; Have you ever been to the campus of Duke University? They have a east and west campus with shuttle buses. Everything isn't about condos and gentrification. Everyone doesn't want to live in a condo. Some people prefer living in a single family home without people living over, below, and next to them making noise disturbing their quality of life.

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  • DC

    @LiberalDemocrat: We're not talking about whether or not some people want to live in condos, we're talking about what's best for the University. They have a whole slew of financial issues, but one easy fix would be to sell that dorm on 16th street: it's far away, which means the university pays to shuttle bus students back and forth, it's not nice/renovated and it's had mice problems since at least 1999.

    They should not be surprised that less students can afford to (or are willing to) come back after the astounding tuition increases they have implemented over the last few years.

  • Frank Winstead

    Kerry-Ann Hamilton is blaming the "national recession" for Howard University financial problems. President Obama's administration constantly declares the recession is over and the nation is in a recovery. How can Howard University in recession-proof Washington, DC blame the President's economic policy for Howard's decline?

  • Sean

    @Frank I'm not sure recession proof DC has anything to do with it. DC is recession proof because of all the Civil Servants here spend money and haven't had their salaries cut. But the fact that Fed employees are still spending money doesn't mean that the Federal grants/loans that the government provides for education aren't being reduced. Furthermore, the fact that we here still get a paycheck not a factor in whether students from DMV area or anywhere else would be able to afford college.

  • JoeEsq 74

    If the parent of a Howard student lost a job in Georgia, California or Illinois during the recession how is DC being recession-proof helping that parent pay tuition?

    RE: Shuttle. The shuttle runs from the law school @ CT Ave / Van Ness NW to dorm on Euclid then to main campus. The School of Divinity campus is in NE and is also served by a shuttle. The school appears to be taking a balanced approach to close an operating budget shortfall due to being under projected enrollment. Howard should not sell off land to close a short term budget gap at the expense of the long term health of the school. Rather than selling off land they should enter private sector partnership for development around the campus. The undeveloped lots and surface parking lots could potentially generate revenue for years.

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