on December 07, 2013 at 9:08 AM, updated December 07, 2013 at 12:07 PM
GRAND RAPIDS, MI - Calvin College unveiled a proposal this week to close current and projected budget deficits by eliminating or reducing programs, cutting staff, and raising revenue through enrollment growth and differential tuition rates.
The four-year plan, if approved, would guide the college as it continues to divert revenue from its general fund to pay off $115 million in long-term debt.
“The overriding principle guiding the decisions of prioritization and the strategic plan has been the preservation of the quality in our academic programs,” the Christian liberal arts college said in a statement.
The college declined to provide MLive a copy of the full report. A one-page summary says the college intends to close its current and future annual operating deficits – caused by diverting funds to cover debt – in the following ways:
• Raising $25 million by 2017 to pre-pay principal on the college’s long-term debt
• Selling “non-core” real estate over the next several years
• Refinancing remaining long-term debt in 2017
• Increasing revenue by adding new programs, increasing enrollment and possibly adding a differential tuition rate to high cost programs
• Reducing annual operating expenses of roughly $4.5 million by June 30, 2017. Some of the savings could come through staff cuts or the elimination and reduction of programs.
Calvin’s current operating deficit amounts to $4.5 million. Its annual operating deficit is expected to rise to $7.5 million in 2017.
President Michael Le Roy declined to be interviewed, but in a prepared statement, Calvin stressed that the recommendations laid out in the plan are not finalized.
Calvin began crafting the plan in October 2012 after Le Roy announced that investments meant to pay down the college’s debt generated smaller than expected returns, and the college spent