Cabrini University has recently announced a new strategic plan to prevent any further accumulation of debt. This plan includes restructuring different courses, majors and minors the university offers.
According to IRS Form 990 filed by the university with the government, Cabrini University has had a budget deficit since 2013 that has been increasing. However, Chief Financial Officer Eric Olson references the disclosed debt found in the balance sheets, which does not pertain to the operations of the university. This debt comes from the facility construction Cabrini has made over the years as “long-term arrangements.”
“All the debt found in the balance sheets are associated with facilities that have been constructed over the years,” Olson said. “The latest issue we did in 2017 was what financed the new residence halls, the parking structure and the nursing facilities that now exist in the first floor of Iadarola.”
Such constructions received funding, or long term bond deals, in order to continue the construction. Cru5h, now known as The Grill, was constructed due to the long outstanding contract the university holds with Sodexo. Sodexo was behind the remodeling, along with the name change. Olson explained how a lot of buildings and programs that Cabrini has been spending money on are from bonds, which run for 30 years, according to Olson.
President Donald Taylor explained that the majority of funding for the nursing program came from external sources such as the renovations in Iadarola for the new nursing program. For example, the hospital beds for the nursing program were donated by Bryn Mawr Hospital.
As for the parking garage and South Residence Hall, Taylor said that they were necessary additions for the university’s campus. Taylor explained that the campus had run out of housing to provide for students, so they needed to build South Residence Hall in order to have more housing available on-campus. He also said that the university needed to invest in the parking garage, because students voiced that there was very little parking on campus.
By using bonds on these buildings and programs, the university is able to spend money on long-term investments despite the deficit. According to Taylor, the long-term bond deals have actually helped the university save money.
“I do need to make clear,” Olson said. “The debt that we incur is not connected to deficits related to tuition and operating expenses. The revenue we collect for tuition and the expenses you pay for salaries and electricity, none of that is in our debt and it never has been.”
Olson continued to explain how the university has a deficit each year, but the university is not incurring debt from each deficit. The university works to manage the deficit and the reserves which is part of the initiative.
“Obviously, we have to be proactive and not get to a point where we utilize all of our current reserves and then we will be incurring debt,” Olson said. “That would not be a healthy place for the university.”
Olson explained that the steps that Cabrini has taken so far play a big role in not incurring deficit spending every year, and there will be continuing efforts as the university moves into the strategic planning part of this innovation work.
“So just like you would if you got a mortgage to buy a house and you finance that offer, it’s the same as our debt,” Olson said.
“Of course we want to get out of debt but that’s all scheduled,” Olson added.
As for the personnel aspect of this, Cabrini had a voluntary separation program, which has been where the majority of personnel changes occurred according to Taylor.
Taylor explained that there are approximately 29 voluntary separations, approximately 12 involuntary separations and seven people that are retiring, or in positions that are not filled due to a hiring freeze.
As for the students, some may have concerns about Cabrini demoting Spanish and Black studies to just minors. However, many leaders have made it clear that Cabrini is more committed to social justice now than it ever has been.
“We are elevating social justice at Cabrini,” Dr. Chioma Ugochukwu, provost and vice president for academic affairs, said.
“If you look at the announcement that came out, what we’re trying to do is make sure that every student at Cabrini is exposed to diversity, equity and inclusion, so this is why we are shifting these majors into the core. Then, in addition, we are also going to have a cultural studies major that will have concentrations in Spanish, Black studies and all these other programs that are related to diversity, equity and inclusion.”
Ugochukwu feels these changes will better incorporate social justice into Cabrini’s curriculum.
“Now every student on campus will have to take courses related to diversity, equity and inclusion.”