SRAP aims to cut costs

College assures students’ financial aid is safe

Published Nov. 30, 2017, 1:28 p.m. - 90 views


Since 2012, St. Olaf College’s costs have risen 6.6 percent, while revenue has only risen 3.2 percent. The fiscal year 2018 budget contains no funds to cover unanticipated expenses, and the current trend predicts future budget shortfalls. In order to balance the budget, the College undertook the Strategic Resource Allocation Project (SRAP), a multi-pronged process of reviewing the College’s operations and creating a plan for increasing revenue and decreasing costs.
St. Olaf’s budget woes primarily arise from two main causes: declining net tuition revenue and increasing costs. Net tuition revenue has fallen largely due to increasingly generous financial aid and scholarships. While some financial aid is specially funded by private gifts, external grants and endowment income, most financial aid is funded by the College’s general revenue. This latter type of financial aid has risen by 31 percent since 2014, leading to a decline in net tuition revenue of 12 percent.
The College is also facing rising costs. 
“St. Olaf has experienced increased expenditures that were required because of emerging federal Title IX, Affordable Care Act and Fair Labor Standards Act regulations,” Chief Financial Officer Janet Hanson said. “The College, like any other employer, is also experiencing increased health benefit costs.”
SRAP was conceived to address these problems, though the organizers stress that it is not simply a cost-cutting exercise. According to the SRAP Planning Guideline, the project is “also an opportunity to re-engineer activities, explore opportunities to increase revenues, and identify where new investments are needed.” One option being explored for increasing revenue involves selling or renting the College’s land north of North Avenue, possibly to Northfield Hospital.
“The hospital is considering expanding their campus, on land currently owned by the College, to provide independent living, assisted living and memory care living options for seniors,” Hanson said.
The personnel driving SRAP break down into two main groups: the Steering Committee and the Review Groups. The Steering Committee is tasked with creating the project’s criteria, overseeing the process and making the final budget recommendations. 
As part of the project, the Steering Committee issued questionnaires to the various academic departments and budget managers asking them to summarize their operations and contributions to the College’s mission. The Review Groups were created in part to oversee this process, as well as to review the information gathered and make preliminary budget recommendations.
Though originally forecasted to be completed by May 2018, the timeline was adjusted due to feedback from the Review Groups and the questionnaires. SRAP is now projected to extend into the first part of the 2018 fall semester.
The entire endeavor has elicited consternation among some students and faculty who are fearful of the cost-cutting aspect of SRAP. According to the Steering Committee’s Nov. 9 meeting notes, “People are worried about ‘passing the SRAP test.’” Though the content of the final recommendations is still highly uncertain, Hanson emphasized financial aid will not change for current students. 
“It’s important to note that for current students, the commitment the College made when we put together your initial financial aid award will remain until you graduate,” Hanson said.

About the Author

Sam Carlen, class of 2020 is a major.

carlen1@stolaf.edu

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