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Dear AU Faculty and Staff,

As we approach the conclusion of the semester and following the late November Board of Trustees meeting, we want to share our strategic path forward for the FY26 budget. The budget is an important tool in implementing our long-term vision for AU, where our mission, our community, our academic pursuits, and our student-focused educational experiences all thrive. Over the past year, we thoroughly assessed our operations, programs, workforce, and structures, with the goals of improving our outcomes and empowering our people to work at the highest levels in support of our students and our mission. We heard valuable feedback and input through community engagement and adopted a new standard of shared governance for this collaboration. All this work identified opportunities for improvement, innovation, and potential savings in the FY26 budget and our strategic planning process as we prepare AU for an exciting future of addressing the grand challenges of the 21^st century.

A core element of the FY26 budget is strategically aligning the university with the new realities of higher education. Enrollment trends and student demographics are changing fast. There is more competition for prospective students and an increased need for student financial aid. We must provide value and exemplary educational and career outcomes for students. This new environment demands innovative approaches. We have a responsibility and an opportunity to collaboratively meet this moment and lean into our future with comprehensive, data-driven solutions that support a vibrant AU and prepare us for the great possibilities ahead. To purposefully adapt to this new reality and move AU’s strategic vision forward, we are updating our enrollment and revenue frameworks, aligning budgets and resources, right-sizing expenditures and structures, and making mission-focused investments.

• The $109 million Student Thriving Complex is already delivering improved student experiences in the renovated Terrace Dining Room and the new third floor of Mary Graydon Center, while the is rapidly advancing.
• We identified more than $30 million in savings and expense reductions in the revised FY25 budget and updated our benefits to provide additional employee health and wellness opportunities and align university benefit costs with market levels to ensure sustainability.
• We are working every day to enhance undergraduate and graduate enrollment, which has seen sizeable swings in the past three years. From a historically large incoming class in 2021 following pent-up demand from the pandemic to quicker-than-expected impacts from changing student demographics and other factors, our recent enrollments have not consistently matched our budgets. Our revised enrollment strategies require a whole community approach to student engagement and success. With updated enrollment levels based on the new realities and a university-wide focus, we are creating sustainable long-term enrollment foundations that support our mission and our budget.

In parallel, we are exploring investments in innovative academic programs that can maximize existing strengths and enhance our distinctiveness. Our academic vision emanates from AU’s core areas of scholarly excellence and creates opportunities to lead in the discovery and implementation of new knowledge that changes our world for the better. We are already innovating in areas such as artificial intelligence (AI), sustainability, higher education leadership, and civic dialogue, among others. These programs aim to attract diverse students, expand our research capabilities, and distinguish AU in the academic community. As we collaboratively develop our next strategic plan, we will continue to innovate in our academic offerings, find new ways to support our scholars and teachers, and leverage our interdisciplinary foundation to advance groundbreaking work at the intersection of critical issues where AU is addressing the great challenges of our time.

Building on these efforts, the FY26 budget will feature updated revenue baselines for undergraduate and graduate enrollment that reflect our strategic approaches and today’s market realities. We are also seeking to increase housing and dining usage levels with our enhanced offerings. The budget will reflect our continued commitment to access and affordability with ongoing investments in student financial aid and will include focused expenditure adjustments and reductions. Further efforts to help us achieve our financial goals, adapt to today’s realities without compromising our future, and strategically position the university for the long-term will include additional revenue generation, a Voluntary Retirement Incentive Program (VRIP), and strategic organizational and staffing realignments to address our current and future enrollment and structural needs. These measures — which are detailed below — will help us fulfill current budget requirements and empower us to seize new opportunities.

Revenue Generation

We are working in multiple areas to increase and diversify revenue. Focused fundraising efforts will seek to bolster student scholarship resources, which support enrollment, boost financial aid, and provide budget support. In addition to the two-year housing requirement (for first- and second-year undergraduate students) that begins in fall 2025, we are developing incentives and programs to encourage more juniors, seniors, and graduate students to live on campus. We know from research that such efforts can strengthen student retention and improve academic performance. AU Athletics is enhancing game-day concessions, expanding partnerships and licensing opportunities, and exploring other ways to build on the exciting environment at our athletic events and generate more revenue. We also continue to evaluate opportunities to maximize income potential from our commercial real estate holdings. All this work will contribute to the resources available to invest in our core mission and our community. This area is an opportunity for our entire community. If you have additional ideas for generating revenue or supporting enrollment, we encourage you to share them in our community forums, talk with your manager, or email provost@american.edu or vpft@american.edu.

Voluntary Retirement Incentive Program (VRIP)

As other universities have recently done–and as AU has previously implemented for faculty–we will be offering a VRIP to eligible faculty and staff. A VRIP provides the opportunity for long-serving employees to consider retiring from the university with a defined financial compensation package. Generally, faculty and staff who are at least 55 years of age and have a minimum of five consecutive years of fulltime service at AU (as of January 6, 2025) will be eligible for the VRIP. Some additional criteria and limitations will apply, and the program will operate on a first-come, first-served basis. On December 6, Human Resources will send further information regarding the program to eligible faculty and staff. The VRIP application process for eligible employees will be open from January 6, 2025, to February 7, 2025, with retirement dates for program participants to take effect in May 2025. We are providing the VRIP option to eligible faculty and staff who are potentially interested in retiring to support individual decision-making while also helping us obtain updated information about the state of our workforce before pursuing structural realignments. Human Resources will work with the schools, colleges, and administrative units to address future workforce needs based on the final VRIP participation levels.

Future-Focused Organizational and Staffing Realignments

To create a more agile and effective university, we will update organizational structures. The intent is to align our resources with our student, academic, and operational needs, the changed enrollment environment, and future strategic opportunities. Based on our review of functions, programs, and operations, we can realign resources and investments that may once have been appropriate but today no longer fit our evolving responsibilities and needs. This effort also underscores our commitment to faculty and staff to foster a modern, equitable, market-based, and data-informed workplace.

By thoughtfully streamlining processes, updating job architectures, reducing duplicative efforts, simplifying or combining certain functions, and optimizing how we leverage staff expertise, we can support our mission and reduce administrative challenges for faculty and staff. Removing outdated structures that may currently impede us from making future-oriented strategic investments is a chance to help us move forward more quickly and with greater impact. We cannot remain the same size and shape when our enrollments, our student expectations and needs, and our resources are all changing. While realignments may lead to some staffing changes, our focus is effective use of existing resources to efficiently support our students and our future. Academic and administrative units will work with Human Resources to identify and implement structural realignments by the end of the fiscal year. We will ultimately produce a modernized organization with a clear and consistent focus on our mission of teaching, research, and learning.

As we advance these efforts and develop additional information and next steps, we will share further updates as quickly as possible, including following the February 2025 Board of Trustees meeting. The FY26 budget process will begin this month, leading to unit submissions in February 2025, and consideration of the budget by the trustees in the spring. As we have done throughout this year, we will continue regular community engagement with forums and opportunities for questions and feedback. The next set of community forums will take place on and (please RSVP at the links).

Thank you for your ongoing participation in this important work, your thoughtful feedback, and your commitment to our students and our mission. Our diligent efforts to solve challenges now will create important and impactful opportunities for our students, staff, and faculty. Through this strategic and collaborative work, we will be a stronger university with great possibilities ahead of us.

Sincerely,

Vicky Wilkins 
Acting Provost and Chief Academic Officer

Bronté Burleigh-Jones 
CFO, Vice President, and Treasurer