Financial Recommendations for Fee-Based Budgeting
At UW Continuum College, we manage more than 110 fee-based degree programs*— one of the nation’s largest portfolios of professional and continuing education. Our experts build on 105 years of experience to strategize with campus partners and keep programs sustainable from the start.
Here, we provide each fee-based degree program with our wide range of support and services, including program management, operations, market research, marketing, finance, IT, registration, online learning, and financial-risk protection for existing and new programs. We use an indirect cost model, which involves aggregating the cost of staff and other expenses that directly support the success of fee-based degrees and allocating them in two ways — as a flat fee and on a per-course basis. The flat fee is an annual program management charge, and the per-course fee is an infrastructure charge. Both are determined during program budgeting.
As budget pressures have the potential to impact students and departments at every level of the University, our fee-based degree experts recommend the following proven financial practices to keep programs in optimal fiscal health.
Start new programs with a single track. When launching a new fee-based degree, it is often best to start focused on a single topic area. Over time, programs can grow and eventually offer multiple discipline tracks, but issues can arise if some tracks start stronger than others. For example, divided cohorts may require additional teaching resources or result in higher program fees, which are then passed on to students in the form of higher course fees.
Gradually add electives. Add program-specific, budgeted elective courses to a degree program only after both budget and enrollment are meeting (or exceeding) expectations. While electives can build student interest and course diversity in your program, offering new electives if enrollment counts and budget amounts are misaligned can jeopardize your program’s fiscal sustainability.
Make sure tuition isn’t too high — or too low. Students who already work hard to pay for their education can be especially discouraged if tuition increases too much or too suddenly. However, if student fees are too low when a program launches, it can be difficult for a program to keep up with salaries and other expenses in the future.
Our competitive analyses and market research can help you set tuition at the right level to keep your budget sustainable from the outset. Plus, as the Office of the Provost is closely scrutinizing fee increase requests for all programs, starting out at the right fee rate is now more important than ever to reduce the need for significant increases in the future.
Keep credit loads appropriate and competitive. In our current budget model, higher credit courses can lower infrastructure and, in some cases, lower instructional costs. During the program planning phase, we can help compare your degree’s credit requirements to those at other institutions to make sure there is not a wide disparity among comparable programs in the number of courses or credits required.
Estimate enrollments conservatively. Base your enrollment projections on historical trends, not optimistic thinking. While our risk-opportunity fund can mitigate occasional, unplanned budget deficits (or cover costs when programs must sunset), it is not designed to be a regular deficit backstop. Instead, it is better to carefully consider past data and project realistic enrollments.
Consider certificates. Affiliated certificates — large or small — can have downstream benefits. You may be able to build a pipeline of students for degree programs or take advantage of in-demand degrees to cover rising costs. These certificates typically require only a few students to break even, but in the case of more significant interest, enrollment can generate substantial net revenue and resources to a degree program or department.
Analyze salaries. Before program budgets start to slide, it is critical to consider salaries. We have found that when more than 50 percent of a program’s gross revenue is allocated to total faculty and staff salaries (not including benefits), there is a significant chance a program will go into deficit. If your budget shows this salary-gross ratio, it may be time to remedy the situation.
We know there are no easy solutions, but here are a few options to consider: Cut nonessential expenses, reduce the FTE allocation of professional staff, shift some instruction from full-time faculty to lecturers or adjuncts, or raise course fees to lower the faculty-gross revenue ratio.
Buffer your bottom line. We advocate for a 4 percent buffer to your budget’s bottom line. Below that buffer, your program may be so close to break-even that the smallest unforeseen enrollment drop can result in a program deficit. In the long term, that could result in sunsetting a program in deficit or in an increased use of pooled risk-opportunity funds. While risk-opportunity is there to mitigate unplanned losses, this pool must be maintained at a sufficient level for the benefit of all programs.
Partner with your program manager. Collaborate with your program manager throughout the life cycle of your programs. Share your challenges and seek their expertise on best practices for managing a fee-based program. We are proud to have returned nearly $14 million to the University last year, all to build department programs and the UW’s academic excellence. The more your program manager knows about your goals, the more they can help.
*To determine the degree count, we follow the University’s institutional metadata rules and track ABBV-pathway-level-type. If the same degree has multiple pathways within the same reporting period it is counted only once.
Since 1912, University of Washington Continuum College has provided innovative learning paths that boost career success and inspire more meaningful lives. With a flexible approach to delivering the right programs for the right people at the right time, Continuum College provides over 50,000 students each year with a high-quality University of Washington education that’s relevant for today’s world and accessible to learners in Seattle and around the globe.