Henderson State University has told the Higher Learning Commission that the school's new balanced budget is based, in part, on the assumption that enrollment will increase this fall.
Faced with declining enrollment in recent years, the Arkadelphia university entered fiscal 2018 with a $3.2 million budget deficit. The board of trustees recently approved a balanced budget for fiscal 2019.
The accrediting agency had asked Henderson to file an interim report on the school's monetary situation in light of the agency's decision to reduce Henderson's financial rating from 2.5 to 0.8 in fiscal 2015 and fiscal 2016. The highest a public university can score is 10.
Data leading to the lower rating and reviewed by the commission tends to run two years behind, so the $3.2 million deficit entering fiscal 2018 and the budget cuts that followed were not a part of the agency's findings.
According to Henderson's 35-page report, it projects that this fall's total student enrollment, graduate and undergraduate, will be "slightly above 2017-18 enrollment levels."
"Current pre-enrollment data suggest a freshman class of approximately 750 students, a slight increase in undergraduate retention rates, and an increase in graduate enrollments," the report said. "Though a larger increase in total enrollment is possible, a more conservative estimate was used for budgetary purposes."
The school projected that first-time freshmen would reach 850 by the fall of 2022.
Henderson had 619 such freshmen last fall, according to a chart included in its report.
[DOCUMENT: Read the financial panel's report]
The school projected, however, that sophomore enrollment would decline from 566 to 485 this fall but begin steadily rising again in 2019 until it reaches 647 in 2022.
The university included graduate enrollment in its calculations for total enrollment and forecast that total would rise from 3,336 last fall to 3,358 this fall and then gradually increase until it reaches 4,016 in the fall of 2022.
Of projections for the next five years on enrollment and other matters such as cost of attendance and staff compensation, the university said it expects the projections to "change each year as we move closer to the forecasted periods."
"Enrollment projections are a key component of the projections and are re-cast annually based on actual enrollment trends compared to forecasted trends," the report said.
The university said its five-year budget forecast based the projected enrollment increases of between 0.7 percent and 6.5 percent on "anticipated changes in recruitment success and retention increases."
The university expects "level funding from state appropriations" in the coming five years, it said.
The report referred to the Henderson "administration's commitment to a strong financial future" for the university.
"Though we expect slow progress on improving the Composite Financial Index in the near term, long term results are expected to demonstrate improved financial health," the report said.
State Desk on 07/06/2018