In an email to faculty this afternoon, USC announced its plans to address a $158 million deficit for the 2023-2024 fiscal year, which is nearly two percent of the university’s total budget.
In other words, the university revealed that it spent $158 million more than what it earned last year and is now sharing its plans to tackle such overspending.
The statement, sent by the Office of the Provost, detailed that USC is among the many institutions that have been pushed into a structural deficit due to the rising costs of higher education.
Over the past six years, the university’s deficit has ranged from $586 million at least once which the email accredited to “legal cost repayments and COVID” compared to $36 million in 2023.
The university claims that the multiple reasons for this year’s deficit are inflation, insurance costs, graduate enrollment declines, online education competition, financial aid growth and rising athletic expenses.
The university provided goals and principles for tackling their path forward, but they were vague and lacked tangible plans. Some of these principles include the university’s commitment to continue investing in its current students, staff and faculty, and plans to build upon the university’s existing financial strength in a way that can withstand the unforeseeable future.
“Eliminating this deficit is attainable over the next few years and is necessary to ensure USC’s long-term financial resiliency,” the University said in a statement. “By acting now and reviewing our financial structures, we can fulfill our obligations to current and future Trojans – so long as we all focus on our end goal.
This announcement comes after Tuition Assistance Benefits (TAB) cuts which resulted in changes in the tuition benefits for the children dependent on staff and faculty, and tuition hikes from $66,640 in the 2023-2024 academic year to the current $69,904.
The email also detailed the university’s efforts over the past two years to ensure sustainable excellence, which included reducing administrative and central health costs, asking schools and administrative units to reduce spending by $46 million and $86 million respectively and making changes to health incentives.
Future plans include empowering school administrations to make localized and specific decisions on costs and reductions, and streamlining operations starting in the Fall 2025 school year and beyond.
“We understand that changes like these can be difficult and affect people in substantial and different ways. Please know that we are committed to giving our full time and attention to getting this right,” the University said in the statement. “We are confident that USC will continue to excel as we take the actions needed to build an even brighter and more sustainable future for our university.”
Story updated to correct tuition numbers mentioned.