Following the approval of the fiscal year 2025 (FY25) tuition and fees in February, the Board of Trustees met on April 5, 2024, to review the investment and spending portion of the university budget. We used the two-part budget cycle this year to provide timely information to our community and to support the ongoing organizational assessments and the presidential transition. Through this process, we achieved a balanced FY25 budget that aligns our resources to our mission, invests in our people, and provides a strong framework to inform strategic decisions in the FY26-27 two-year budget cycle.

The FY25 budget helps us address the financial realities of higher education and align our revenues and expenses. The budget totals $860 million, compared to $894 million this year, reflecting our revised assumptions for enrollments and reduced expenditures identified by the schools, colleges, and administrative units. Importantly, we are moving these critical alignments forward while continuing to invest in our people and our mission.

AU’s people are at the center of the budget. Salaries and benefits for our faculty and staff (44 percent) and student financial aid (23 percent) make up the significant majority of our investments and spending. Both critical investments are larger shares of the FY25 budget compared to this year. We are also continuing to invest in the AU student experience, including the next renovation project in our residence halls (McDowell Hall), the first full renovation of TDR in nearly 40 years, and the ongoing construction of the Student Thriving Complex.

I want to thank our CFO Bronté Burleigh-Jones and our Acting Provost Vicky Wilkins, who as co-chairs of the University Budget Committee led a strategic, transparent, and community-oriented process to develop the FY25 budget. Through budget forums, communications, and information sharing with students, staff, and faculty, Bronté and Vicky involved the community throughout the year, collected and incorporated extensive input and feedback, and guided us to a budget that reflects AU’s values and helps position us for the future. The next set of forums to discuss the FY25 budget will take place on April 24 and April 25 (click on the links to RSVP).

The key investments and updates in the FY25 budget include:

We are investing a total of $197 million in financial aid for undergraduate and graduate students. Our undergraduate discount rate will rise to 33.1 percent as part of our commitment to affordability and access. We are increasing institutional undergraduate financial aid by $5.5 million, supported in part by the Change Can’t Wait campaign and gifts for scholarships. This represents a year-over-year undergraduate financial aid increase of 4.9 percent, outpacing the 4 percent tuition increase.

We are investing an additional $27 million in compensation and benefits next year, building on the multiyear effort to continue progressing salaries to market competitive levels. The FY25 budget features a 4 percent compensation pool, which matches the highest levels in recent years, and supports our efforts to address external conditions and reward high performance. We are spending an additional $1.3 million in FY25 for the university’s contribution to employee health and dental plan premiums. $5.9 million of existing cash allocations for long-standing positions are moving into the base budget to provide certainty for these important roles in student support, inclusive excellence, athletics, and university advancement.

We achieved $25 million in operating budget savings thanks to strategic decisions by our teams in the schools, colleges, and administrative units. These savings include compensation savings for vacant positions; contractual expense reductions; savings in supplies, travel, and food expenses; and lowering other operating costs. In addition to the cost savings, we are pausing our 1 percent annual contribution to the university’s reserves. By pausing the contribution, we are helping to offset this year’s financial shortfall as part of our alignment work, but it is critical to resume funding the reserves in future years to support the enduring financial health of the university.

The full budget report will be published by the university budget office in the coming weeks, further detailing our investments in our people and our strategy across different parts of the university. On behalf of the trustees, I want to thank our university leaders for guiding this process, commend the members of the University Budget Committee for their important contributions, and express our gratitude to all members of the AU community who engaged in this work over the year. The valuable input from across our community produced a budget that effectively positions us for FY25 and long-term success.