2024-25 Operating Budget Summary

2024-25 Revised Operating Budget [PDF]

On Saturday, September 21, 2024, the Board of Managers adopted the revised Fiscal Year 2025 operating budget. The budget reflects projected enrollment for the upcoming year and the endowment spending rate, based on the endowment’s market value as of June 30, 2024. The approved budget provides a blueprint of anticipated operating revenues and expenditures.

There are several elements to the budget worth highlighting:

Operating Revenues

ENROLLMENT AND Term Bill

On-campus enrollment is budgeted at 1,688 students for the FY 2025 academic year, with an average of 90 students expected to participate in off-campus study programs. The FY 2025 cost of attendance (term bill) for full-paying students is $85,802. These costs include tuition, housing, food, and mandatory fees, and represent an increase of $4,426 from the FY 2024 academic year.

Financial Aid

The Board approved a $61.8 million financial aid budget for the FY 2025 fiscal year, an increase of 9.0% from FY 2024. The budget reaffirms the College’s commitment to making a Swarthmore education accessible to qualified students of all economic backgrounds. Approximately 54% of Swarthmore students are projected to receive need-based financial aid from the College, with an average award of $71,951 per aided student for FY 2025.

Endowment Spending Distribution

The College’s endowment distribution for FY 2025 will be $127.0 million, an increase of 7.7% from FY 2024. The increase in endowment distribution will cover additional operating costs from inflation, including competitive compensation for faculty and staff, higher level of funding for capital improvement projects, and increases to the financial aid budget. The College’s policy is to maintain a spending rate between 3.5% and 5% of the annual value of the endowment.

Gifts and Grants

This category includes annual giving to the Swarthmore Fund and federal and state support for programs. The budget for the Swarthmore Fund will remain essentially flat for FY 2025. Additionally, the expected level of federal and state support will remain at $800,000 for FY 2025, with no expected changes in federal support for student work-study and institutional support from Pennsylvania.

Other Income

This category includes a variety of income sources such as application fees along with activities from facility rentals, summer housing, and dining and campus store operations. The approved budget will increase to $6.3 million. Interest income on the College’s cash balances is a primary driver of the increase. Summer housing income will increase due to an increased number of students working or performing research for campus departments. Likewise, we expect dining operations and sales to increase due to faculty, staff and students visiting campus dining facilities. Lastly, the Campus & Community Store will have a slight increase in revenues due to a reallocation of existing revenue between categories to reflect sales trends.

Compensation

Faculty and staff compensation is budgeted to grow by 5.0%, driven by inflation, an increase in headcount, and benefits costs. The budget is growing by 4.0% for the faculty and instructional staff salary pool, which is designed to meet the College’s longstanding commitment to pay assistant, associate, and full professors 102.5% of the average of our peer institutions. The College has a long-standing practice of using peer data to determine market-based adjustments to faculty compensation.

The staff salaries and wages budget will grow by 6.8%. Staff will receive a 4.0% inflationary increase. The budget adds funded positions in areas of increased health and safety concerns, and risk mitigation. In addition, the budget includes a pool for adjustments to base salaries for staff position reclassifications, replacements, promotions, and retention.

We anticipate a 6.2% increase in benefits costs, largely driven by growth in health care costs and headcount.

Departmental expenses

Current expenses, excluding the Inn at Swarthmore operations, will increase by $4.5 million or 8.0%. This year’s budget growth accounts for inflationary pressures on food, utilities, library materials, insurance, supplies and service contracts. Support for off-campus study expenses will be increased due to anticipated higher enrollment. In addition, funding will support student initiatives such as the continued pilot program to provide laptops to eligible students on financial aid and providing all students with SEPTA rail passes to enable their travel to and from Philadelphia and the surrounding region free of charge. Lastly, the College is fulfilling its commitment to increase the minimum wage for all student workers to $15 an hour, beginning July 1, 2024.

Contingency

The contingency will increase by $500K to $1.5 million. Overall, the operating contingency represents approximately 0.7% of the College’s estimated expenditures.

Capital Budget

The allocation to the College’s capital budget increased by $1.0 million to $18.5 million. The 2024-25 capital budget was approved by the Board at its February meeting. The College has transitioned to a third-party provider for maintenance of residential properties owned by the College. As such, $300K has been reallocated to departmental expenses to support this effort.

Debt Service

The College’s debt is all fixed-rate, and the principal and interest expenses are the College’s contractual obligation. The debt service budget includes interest costs of $14.1 million, with the $10.2 million principal repayment. The College will spend down debt issued in Summer 2023 to fund Martin Hall renovation and a large portion of the College’s Campus Renewal Program.