NIU Slows Spending As Financial Fallout From COVID-19 Crisis Looms

Apr 30, 2020

Northern Illinois University president Lisa Freeman says the COVID-19 shutdown has cost the school $40 to $50 million so far in "revenue reductions and real costs." Future financial losses will be significant, too, in state funding, enrollment, housing, canceled events, and even philanthropy.

Credit Northern Illinois University

“As the end of the semester nears and we consider the longer term, I want to help our employees understand the challenges ahead, and the very difficult decisions we need to make and consider for NIU’s future,” Freeman said in an emailed message to employees. “My responsibility as NIU’s president is to ensure the sustainability of the university, and I’m committed to doing so in ways that are as thoughtful and transparent as possible, respectful of shared governance and in alignment with our values.”

Freeman outlined immediate cost-cutting measures:

  • Voluntary pay cuts for the university’s senior leadership, starting July 1. Freeman will take a 12% pay cut and forgo any bonuses. Others taking a pay cut for the entire 2021 fiscal year include vice presidents, deans, and the athletic director.
  • Non-essential purchases and capital projects are on hold, and contracts are being reviewed to see if there can be savings or delays.
  • “Extra help” employees will have their hours reduced, with full-time employees picking up their work where possible.
  • A “hiring chill,” short of a “hiring freeze,” is in effect.
  • Employee phone stipends will be “paused” June 1 while the university evaluates the policy and comes up with new eligibility requirements.

NIU is expected to receive $14.8 million from the federal CARES Act, half of which will go to direct student support. Freeman said, “it simply won’t put a dent into a growing situation.” The university hasn’t received a $31.8 million appropriation from the state for this fiscal year, and Freeman says there’s no telling yet how much of that the university will see as the state struggles with the COVID-19 crisis.

University administrators usually present their budget to the Board of Trustees in May, but will use the month to plan instead, presenting the budget at the Trustees’ June 18 meeting.