DeKALB — A projected budget deficit was discussed during Thursday’s Board of Trustees Finance, Audit, Compliance, Facilities and Operations Committee meeting.
The budget deficit for Fiscal Year 26 (FY26) will cause a tuition increase and rising operational costs across the university despite improvements from the previous year.
The university recommended a 2.5% increase in base tuition and no change in undergraduate differential tuition rates.
“These recommendations were developed with the goal of keeping the tuition for incoming and reentering students affordable while addressing the current academic and support needs of students, as well as addressing the increasing operational costs of the university,” the financial report said.
Currently, 48.8% of NIU undergraduates do not pay tuition or fees and 55.7% pay less than 25% of tuition.
“For the majority of these students, the tuition and fees are paid by a combination of Pell, MAP, AIM HIGH, institutional scholarships and other grants,” the financial report said.
Vice President and Chief Financial Officer George Middlemist said the university expects to end the fiscal year with a significant budget shortfall.
“Based on current trends, Fiscal Year 26 is projected to close within all funds deficit of $4 million compared to the originally planned balanced budget,” Middlemist said.
During the meeting, officials said the deficit is primarily because of declining state support and rising expenses.
“This shortfall is driven primarily by a $2 million reduction in expected state appropriations, combined with softening results across several other revenue and expense categories,” the financial report said.
Tuition and fees are expected to exceed the budget by $2 million and full-year revenues are expected to be $2.3 million below budget. Other expenses, such as total spending, scholarships and personnel services are expected to exceed the budget.
“On the expense side, total spending is projected to exceed budget by about $1.7 million, with the overage concentrated in scholarships, other and personnel services. Scholarships, others are expected to finish $2.4 million over budget, reflecting higher state-funded aim, high support and residential housing, along with an associated increase in scholarships due to higher enrollment,” Middlemist said.
University officials emphasized that achieving a balanced budget remains a priority moving forward.
“We need to continue to exercise significant fiscal discipline in managing all expenses to achieve the imperative of a balanced budget by year end,” Middlemist said.
To address the shortfall, the university plans to take measures to control spending across all departments.
“The university will intensify its deficit mitigation strategies, focusing on more aggressive position and cost control measures,” Middlemist said.
Officials also noted there has been progress since the previous fiscal year.
“Based on second quarter (Q2) projections, the projected deficit improved from $14M last year to $4M this year,” the financial report stated. “Continued progress will require sustained discipline in managing expenses to achieve the imperative of a balanced budget by year-end.”
The next Board of Trustees meeting is at noon on March 19 in Altgeld Hall, Room 315.