Struppa outlines plans to close Chapman’s $25 million deficit

Graphic by Sukhman Sahota, Creative Director

To combat Chapman’s projected $25 million budget deficit, President Daniele C. Struppa is implementing plans to draw back on spending.   

As with many other universities, Chapman was affected by issues with the Free Application for Federal Student Aid (FAFSA) in the 2024 enrollment cycle. While families are typically notified of their students’ financial aid options in March, the issues pushed these notifications back, impacting applicants whose decisions of where to attend school are dependent on their financial offerings.

Many students strongly consider their FAFSA and scholarship opportunities as a factor for choosing Chapman, which has a tuition fee of $64,580 per year. Likely due to the issues with federal aid, the university saw less enrollment last spring, with the admitted freshman class falling short of 200 students from average years.  

The drop in enrollment created a projected budget deficit of $25 million for the university.

“The shortfall driven by the federal mismanagement of the FAFSA, combined with its impact on housing and dining, has created a projected $25M deficit for 24-25 that I propose to correct with the following measures,” Struppa told The Panther.

Struppa outlined his plans to solve the budget shortfall, which he presented to the Board of Trustees in September of last year.

The largest budget cut comes from the elimination of “approved 24-25 budget additions,” which will bring back $11.4 million. The second largest return is by reducing “budgeted year-end transfer to Building and Real Estate Acquisition (BREA),” which will open an additional $10 million.

Other cuts include: redirecting investment income from BREA cash to operations ($3.5 million), closing 19 vacant faculty and staff positions ($2 million), suspending software upgrades ($2 million) and reducing the capital budget ($1.5 million). 

All of the planned cuts add up to $30.4 million returning to the budget, closing the projected deficit and creating an additional revenue buffer, which Struppa said was to account for potential enrollment shortfalls in this year’s cycle.

However, Struppa noted that the university is doing well with enrollment, and said the school should be closing the financial period without a deficit. 

Struppa told The Panther that while the school wanted to keep these budgeted additions, such as opening new positions and beginning construction projects, the administration had to cut them in order to accommodate for the unforeseen deficit.

“We decided not to allocate the resources for the new hires until we had full clarity of how much less revenue was going to come in,” he said. “When fall 2024 arrived, we had now full precise numbers and we determined that in fact we had something like $30M less than we expected, and for that reason we decided to eliminate the enhancement.”

More money comes from reducing the amount of funding that gets put into the BREA savings, and instead funneling that money into other operations. Struppa explained the BREA fund as a savings account that is set aside for future building construction.

“Because we are a private institution, nobody buys buildings for us, we have to pay with our own money, and so every year we set aside some cash that will be used later on to acquire buildings or to build them,” Struppa said.

Chapman recently purchased Chapman Court for $160 million to accommodate more students; however, many rooms may remain empty due to the low enrollment. 

A new rule has also stated that students are now required to live in Chapman housing for three years instead of the previous two year requirement, though school officials have stated that this is unrelated to the budget.

Housing isn’t the only building consideration for the school, as Chapman sets up to build two new traffic lights located at the entrance of the Anderson Parking Structure. The $1 million needed to construct the two traffic lights will be coming from existing money in the BREA fund and isn’t expected to be completed until 2026.