On Jan 22, 2025, the Concordia student body received a mass email from President Irvine, informing them that tuition would be increasing by $1,200 dollars in the 2025-26 school year, setting the price of tuition to an all-time high of $31,600.
Back in fall of 2021, Concordia lowered tuition by $15,000. The school’s website says this was an effort to address the “confusion and anxiety many students and families experience after decades of rising tuition prices.”
This new decision to raise tuition comes after the school reported a total loss of almost $12 million in the last (2022-23) fiscal year.
This information is public on the college’s 990 forms, which most nonprofit organizations must fill out.
In the 2022-23 fiscal year, the school reported its lowest inflow of cash (revenue) in over 15 years, clocking in at $93.7 million. This number is around a $12 million decrease from the 2021-22 fiscal year, and follows a trend of dropping revenue.
Revenue simply refers to money that is brought in by the college, by things like Dining Services, tuition, and donations.
So, what is the cause of this decreasing revenue?
The answer is a little bit tricky.
The short answer is it’s not as bad as it seems.
One main reason for this $12 million deficit is simply due to fluctuations in the stock market.
$10 million of the deficit was a drop in investment revenue, which is linked to the stock market.
“That number is not a loss of cash, or day to day operating funds,” says Rachel Clarke, VP for Finance and Administration.
She explains why the stock market can influence Concordia’s revenue so much.
The investment revenue is from Concordia’s endowment, which is a collective term for many of the larger donations that the college receives.
When larger donors, usually characterized by a donation of $25,000 or more, give the college a donation, they usually have a plan or guideline for how they want the money to be used.
When the donor gives an endowment, $50,000 or more, there are even stricter rules on how the money can be used.
For example, the college can only use about 4-5% of the donation each year. To ensure the endowment can benefit the college for years to come, Concordia invests the money into things like stocks and bonds, and then uses the earnings from the gift, not the actual gift, to benefit the college.
“That chunk of money they give at the beginning, we don’t ever spend that. We only spend what that chunk of money earns,” says Rachel Clarke, VP of Finance and Administration.
The investments are overseen by the board of regents and an investment committee.
So, the drop in revenue was due to what is known as an “unrealized loss,” or a “paper loss,” because while the school’s investments did poorly, nothing was truly lost or sold.
“So when the market does poorly, because we’ve got about a $200 million endowment, that has a significant impact,” says Clarke.
Because the college has such a large endowment, it is more likely to be impacted by shifts in the economy.
But this isn’t the only thing that has impacted the decline in cashflow.
In 2021, tuition for incoming students was lowered from $42,750 to $27,500, a 35% drop.
In unison, enrollment experienced a small drop, in which 123 fewer students were enrolled. This combination meant less money coming in from tuition and paired with the poor investments, a loss in revenue.
To address lowering revenue and enrollment, Concordia is following a national trend of increasing tuition. According to US News and World Report, tuition at private colleges has been steadily increasing. Tuition has grown on average about 41% since 2005 (adjusted for inflation).
What is known as “auxiliary operations” make up the majority of Concordia’s inflowing cash (also known as revenue). This includes tuition, revenue from the language villages, Dining Services, residence halls and Cobber Kids.
“Diversifying our revenue is really an important priority for us too. We have some sources of revenue that people may not be aware of,” says Dr. Jill Abbot, Chief of Staff.
She references that Dining Services has contracts with local organizations like childcare centers to deliver meals, which makes extra money.
In 2023, these auxiliary operations made up about 79% of their revenue.
“We definitely need to address [decreased income]” says Dr. Jill Abbot, Chief of Staff.
“This year’s class was a big growth class for us and we’re incredibly excited and grateful, we’re anticipating that for next year’s class as well.”
