2023-24 Operating Budget Summary
On Saturday, May 6, 2023, the Board of Managers adopted the Fiscal Year 2024 operating budget. The budget reflects projected enrollment for the upcoming year and the endowment spending rate, based on the endowment’s market value as of December 31, 2023. The approved budget provides a blueprint of anticipated operating revenues and expenditures.
There are several elements to the budget worth highlighting:
On-campus enrollment is budgeted at 1,680 students for the FY 2024 academic year, with an average of 84 students expected to participate in off-campus study programs. The FY 2024 cost of attendance (term bill) for full-paying students is $81,376. These costs include tuition, housing, food, and mandatory fees, and represent an increase of $4,022 from the FY 2023 academic year.
The Board approved a $56.7 million financial aid budget for the FY 2024 fiscal year, an increase of 4.9% from FY 2023. The budget reaffirms the College’s commitment to making a Swarthmore education accessible to qualified students of all economic backgrounds. Approximately 53% of Swarthmore students are projected to receive need-based financial aid from the College, with an average award of $66,931 per aided student for FY 2024.
The College’s endowment distribution for FY 202 will be $118.3 million, an increase of 6.3% from FY 2023. The increase in endowment distribution will cover additional operating costs from inflation, including competitive compensation for faculty and staff, higher level of funding for capital improvement projects, and increases to the financial aid budget. The College’s policy is to maintain a spending rate between 3.5% and 5% of the annual value of the endowment. For FY 2024, the spending rate is 4.61%, an increase of 0.28% from FY 2023.
This category includes annual giving to the Swarthmore Fund and federal and state support for programs. The budget for the Swarthmore Fund will remain essentially flat for FY 2023. The expected level of federal and state support will increase to $800,000 for FY 2024, with no expected changes in federal support for student work-study and institutional support from Pennsylvania.
This category includes a variety of income sources such as application fees along with activities from facility rentals, summer housing, and dining and campus store operations. The approved budget will increase to $6.2 million. Interest income on the College’s cash balances is a primary driver of the increase. Summer housing income will increase due to students working or performing research for campus departments. Likewise, we expect dining operations and sales to increase due to faculty, staff and students visiting the new Dining Commons. Lastly, the Campus & Community Store expanded revenues from Swarthmore branded clothing and an expansion of the store’s gift collection.
Faculty and staff compensation is budgeted to grow by 7.0%, driven by inflation, an increase in headcount, and benefits costs. The faculty salary budget will grow 7.9%, with an adjustment by faculty rank to remain competitive with our peer institutions. The College has a long-standing practice of using peer data to determine market-based adjustments to faculty compensation.
The staff salaries and wages budget will grow by 8.3%. Staff will receive a 5.25% inflationary increase. The budget adds funded positions in areas of increased workload and accommodating new spaces as well as health and safety concerns, and risk mitigation. In addition, the budget includes a pool for adjustments to base salaries for staff position reclassifications, replacements, promotions, and retention.
We anticipate a 3.9% increase in benefits costs, largely driven by growth in health care costs and headcount.
Current expenses, excluding the Inn at Swarthmore operations, will increase by $3.9 million or 7.7%. This year’s budget growth is higher than normal to account for inflationary pressures on food, utilities, equipment, supplies and service contracts. In addition, funding will support new student initiatives such as a pilot program to provide laptops to eligible students who indicated that they could not afford one and providing all students rail passes to enable their travel to and from Philadelphia and the surrounding region free of charge. Lastly, the College is increasing the minimum wage for student workers to $15 an hour over the next two fiscal years. The FY 2024 budget includes an increase in student wages to $15 per hour for over 50% of student workers. All student workers will be paid a minimum of $15 per hour beginning July 1, 2024.
The contingency is being reduced to $1 million. Overall, the operating contingency represents approximately 1% of the College’s estimated expenditures.
The allocation to the College’s capital budget increased by $0.5 million to $17.2 million. The 2022-23 capital budget was approved by the Board at its February meeting. An additional $300K is being provided for maintenance of residential properties owned by the College.
The College’s debt is all fixed-rate, and the principal and interest expenses are the College’s contractual obligation. The debt service budget revises interest costs to $13.9 million, with the $9.9 million principal repayment. The College is issuing additional debt in Summer 2023 for funding Martin Hall renovation and a large portion of the College’s Campus Renewal Program.