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Tuition guarantees, other financial aid on potential chopping block as UArizona grapples with financial future

Salary cuts, termination of employees also among ABOR suggestions
Posted at 7:48 AM, Nov 10, 2023
and last updated 2023-11-10 09:48:51-05

TUCSON, AZ — The Arizona Board of Regents (ABOR) says the University of Arizona is currently 'hemorrhaging' money, now with the least amount of cash on hand since 2013.

The schools says it's the result of major investments that drained the university's reserves, as well as some mistakes in accounting. University of Arizona President Dr. Robert Robbins says those investments—including some research funding and scholarships designed to attract students—could soon end.

The situation could also lead to salary cuts and a hiring freeze as part of the university's immediate course of action. Regents discussed both long-and short-term actions the university should consider when they met in early November.

"Clearly, you're going to have to have a hiring pause"

Arizona Regent Larry Penley suggested in the Nov. 2 ABOR meeting that salary cuts and a hiring freeze be the first step in addressing the shortfall.

"You're going to have to cut salaries, withhold salaries, or whatever you have to do to reclaim money," Penley said.

Long term, ABOR made suggestions that the school look into re-working financial aid programs and 'reclaiming' funds from individual college budgets.

"You're going to have to, I believe, force a reclaim of budgets on your units, on your colleges." Penley said in the meeting. "I'm afraid you all are going to have to turn to each of your colleges and say 'We're going to have to take some percentage of your budget back,' and you're going to have to either terminate people, stop purchasing, or [do] something else."

A "hard decision" on the horizon

Money spent by the university on strategic initiatives are, as planned, coming to an end, according to Robbins. He told the regents that the university saw success in initiatives that attracted new students through scholarships and research funding.

He says the plan all along was to spend money up-front to build programs into financially self-sustaining entities. Harder decisions coming up, he says, could relate to the University of Arizona's tuition guarantee. That program locks students into their current tuition rate for four years, despite potential increases.

"This 4-year-guarantee on tuition. That's a great differentiator for us, but if it's going to cost us money—which it does—then I think we've got to look," said Robbins. "That's another hard decision."

When the university announced in March that tuition would increase this academic year by 3-4% for both Arizona residents and non-residents, the school reiterated in press materials at the time that "more than 99% of current University of Arizona students will see no increase because their tuition and fees previously were frozen under the Guaranteed Tuition Program."

Robbins added the the school is also losing money through athletics.

"We had assumed when we used days cash on hand to support athletics that there would be an increase in revenue, and it's just not turned out to be the case," Robbins said before the Board in a meeting on Thursday, Nov. 2.

"I don't know of an athletic department in this country that's not losing money...We're always optimistic that the Big 12 is going to be the big solution. It's not. So we have to figure out the athletics side out as well," Robbins continued.

Robbins told ABOR that he is confident the university will find solutions to their current financial challenges, citing in the meeting $83 million the school brought in this year.

The university says it will submit its revised budget plan to the board of regents by Friday, Dec. 15, including stipulations for proper controls to prevent future shortfalls in cash.

ABOR's full guidelines for financial liquidity are shared on their website.