February 6, 2024

Dear UD Faculty and Staff,

A range of external factors stemming from the post-COVID economy are creating both near-term and longer-term financial challenges across higher education, and UD is no exception.  Accordingly, UD has been navigating a challenging and volatile economic landscape characterized by significant increases in the costs of goods and services, as well as in resources needed to educate students across a range of socioeconomic backgrounds.

Here at our University, we pride ourselves on serving the needs of our students while ensuring continued affordability and access to higher education through limited tuition increases, significant financial aid and other support. In addition, we are also committed to providing a competitive employee compensation and benefits package in order to recruit and retain excellent faculty and staff, both of whom are integral to the success of our institution. The resources required for this investment in our people comprise nearly two-thirds of the University’s annual budget.

While carefully considering the challenges noted above, we prepared a balanced budget for fiscal year 2024 (FY24), approved by the Board of Trustees. Furthermore, we developed well-aligned multi-year plans for enrollment, faculty hiring and capital expenses, positioning UD for sustained growth in a fiscally responsible manner. Recently, however, despite meeting our enrollment targets for FY24, further increases in scholarship needs and education delivery costs, especially escalating health care expenditures, have accelerated budget pressures.

As I referenced in my presentation to the Joint Finance Committee of Delaware’s General Assembly last week, we are deeply concerned about the potential for unprecedented increases in the state of Delaware’s health insurance plan. These increases are projected to be considerably higher than the 10% estimate originally communicated when our FY24 budget was developed. Furthermore, UD has been informed about an alarming 27% increase for FY25, with further escalations anticipated in the 7% range per year beyond FY25. It should be noted that this information is preliminary and subject to further change given the uncertainties the state is facing; the University will continue to monitor.

The financial magnitude of the short-term impact that we are facing in FY24 is projected to be in the $20 million to $40 million range. To mitigate this impact, we will all need to implement several cost-saving measures, effective immediately. These measures and guidelines (UDelNet ID required) are intended to both balance and conserve resources for the University’s long-term financial health (note: The linked Web page with more information is a living document that will be updated periodically as conditions change and more details become available, particularly around state healthcare benefits).

In parallel, I am also asking our UD community to be proactive and immediately engage in strategic conversations focused on expanding the reach of our academic programs, as well as creating new revenue streams for the University. This is very important to effectively manage the projected, continued rapid escalation of benefit and other costs in subsequent years beyond FY24. Further, as we strive to innovate and continuously enhance our operational excellence, we will also need to accelerate planning and optimization efforts that have already been in progress and will continue to evolve going forward.

Our UD community has always proven to be resilient, stepping up to help each other, and the institution overall, when it matters most. By coming together as a community, we will continue to advance our present and future success as we transform challenges into opportunities for the University of Delaware to thrive.

Thank you all for your understanding and cooperation. 

Sincerely,

Dennis Assanis President