Southern Adventist University received $35.2 million in net tuition and fees and $13.4 million in room and board in the 2022 fiscal year. But where does that money go?
In an interview with the Accent, Doug Frood, vice president for Financial Administration, explained how Southern uses students’ money.
First, he said money included in a high-level university budget such as Southern’s is fungible, meaning it’s all part of the same pot. It’s impossible to create a line from revenue drawn from specific student expenses to specific operating expenses.
Additionally, student expenses are not the university’s only source of revenue.
“One of the big things students should grasp is your tuition and room and board, especially directly, do not pay the entire cost of this institution,” Frood said. “Fortunately, we have a church that’s supporting us; we have other things going on that help fill in the gap. Otherwise, tuition would be a lot more expensive.”
For example, in 2022’s fiscal year, beginning June 1, 2021, and ending May 30, federal grants contributed $8.2 million and church appropriations $7 million to the university’s total revenue.
“The church appropriations, the Southern Union’s support of us, for a lot of students, they wouldn’t even grasp that. It’s 7 million bucks — that’s a lot,” Frood said. “ … This group of states has made a commitment … to help defray the cost of this institution, hopefully making it more affordable for those who are coming.”
At the end of the fiscal year, the university barely broke even, with total revenue from current operations equaling $77.2 million and total operating expenses equaling $77.1 million, according to Frood. At the end of 2021’s fiscal year, the university had a nice gain, with total revenue from current operations equaling $72.4 million and total operating expenses equaling $71.3 million.
“People may wonder, ‘Well, what do you have to make a gain for?’” Frood said. “Well, stuff goes wrong. Fortunately, we’ve had positive years. This year, we’ll probably be a little bit in the hole. So, those years will make up for the fact that this year may be a little negative. All companies, for-profit or not for-profit, have to make a little bit of, quote-on-quote, ‘bottom-line profit’ in order to cover things that come up that you don’t see coming.”
This bottom-line profit is what allowed the university to share a significant amount of COVID-19 government relief funding with students during the pandemic.
“Close to 57% of the general fee revenue is specifically allocated.”
“A lot of what you got to see during COVID and our response to it was because we knew that we had been blessed essentially for the seven years and that it was for such a time as this,” Frood said.
Frood emphasized that most of Southern’s operating expenses benefit people through four expense categories: salaries, benefits, non-student wages and student wages. Last fiscal year, those four expenses together equaled $45.7 million, very close to 60% of the university’s total operating expenses.
Frood continued to address specific fees students pay and what they look like on the budget. Parking citation fees go into a general, departmental budget and not Campus Safety’s budget.
“I want to be clear. Campus Safety does not end up with a better-looking budget because they went out and gave out more parking tickets,” Frood said. “And we did that on purpose for exactly that reason.”
Parking permit fees, however, do go towards Campus Safety’s budget. Unfulfilled enrichment credit fees help offset the $70,000 to $80,000 Student Development pays each year to bring in speakers for Convocations. Official transcript and add/drop fees help offset the costs of running the Records and Advisement office.
The general fee charged to full-time students is hooked to certain expenses, meaning specific percentages of the total revenue received from students’ general fees are allocated toward specific institutional expenses.
“There are certain fees because of your more full-time status,” Frood said, explaining the reasoning and history behind the fee. “So, as a part-time student taking maybe three or six credits, you may not be using certain things at the same level. So, what happened is, schools started [charging general fees].”
Each semester, almost 20% of the general fee revenue is allocated toward Student Association. About 15% is allocated toward technology, including the cost of Wi-Fi, upgrading licenses (like free Windows accounts) and upgrading computer labs. About 10% is allocated toward wellness, regularly used to buy new gym equipment. About 8% is allocated toward student accident insurance.
Southern used to charge a $40 graduation fee, which would appear on students’ finance accounts after graduating. This was inconvenient for graduates, Frood said, because most paid off their accounts a couple of months before graduating. Now, almost 2% of the general fee revenue is allocated toward the cost of graduation, eliminating the former graduation fee entirely.
Other specific allocations from the general fee go toward LifeGroups and men’s, women’s and married clubs.
Close to 57% of the general fee revenue is specifically allocated. The remaining percentage could be explained as going toward Student Support Services, student health, McKee Library and the Writing Center. Although this remaining percentage is not specifically allocated, Frood described those areas as making the most sense considering the purpose of the fee.
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