Jacksonville University Finances

[jaxlongtimer]

Looks like JU may be pushing to the edge on its financial condition per the report below.  Wonder how this will impact their investment in the Law School downtown, among other issues, as they do an extensive review of operations and expenses.  Surprised by their expansion into law and medicine recently given this report.

Hope they can navigate out of this quandary successfully.

Jacksonville University’s financial woes paint an uncertain future

Jacksonville University is planning to cut costs in a fight to regain financial health as the school's breach of a debt covenant has auditors calling its future into question.

As it cuts costs and hikes tuition, the administration says its survival depends on financial changes that have not been fully implemented yet, according to internal documents reviewed by the Business Journal.

The university, boasting one of the largest alumni networks on the First Coast, failed to meet a key debt covenant for the fiscal year ending June 30, 2024, casting significant doubt on its ability to continue operating without substantial intervention, according to the recently compiled report...

...Compounding the financial woes are debt obligations tied to large-scale capital projects, including the addition of its medical and law schools, and operating expenditures that have outpaced revenue growth.

https://www.bizjournals.com/jacksonville/news/2024/12/02/ju-2024-financial-report.html?utm_source=st&utm_medium=en&utm_campaign=EX&utm_content=JA&ana=e_JA_EX&j=37694710&senddate=2024-12-02

[Jax_Developer]

A lot of universities expanded shortly after or even during COVID - not realizing (or prepared?) that COVID was quite literally the catalyst for that demand shock. I have to imagine this trend is impacting several colleges all over the country. I knew a lot of people that went for a grad degree because the job market wasn't alive for 2 full cycles.

[jaxlongtimer]

The UF colleges participating in the establishment of the facility include the Warrington College of Business; the Herbert Wertheim College of Engineering; the College of Medicine; the College of Public Health and Health Professions; the Levin College of Law; and the College of Design, Construction and Planning.

Looks like some of these UF programs will be competing with JU and UNF.  Wonder what they are thinking now.  With a national demographic decline beginning for years to come in the student pool, it has to be tough on some level.  Maybe Florida and Jacksonville's growth will provide some cover.

Especially notable would be UF having a law school in Downtown only blocks away from JU's.

[jaxlongtimer]

Turmoil at JU continues.  Sad to see and hope they pull off a turnaround.

JU faculty votes no confidence in president amid financial woes

The university’s faculty assembly took a vote of no confidence in President Tim Cost Wednesday night. It submitted the resolution of censure to the Board of Trustees Thursday...

...An alleged internal faculty report, recently obtained by the Business Journal, but disputed by the university, outlines longstanding financial challenges at JU, pointing to years of structural strain and administrative decisions as key contributors to the institution’s current fiscal position. Multiple sources have told the Business Journal the document is a work product of the university's Planning and Budget Committee and was widely disseminated amongst faculty and administration.

However, the administration told the Business Journal it had not been provided an official copy of the report prior to questions for response...

...The report cites long-term debt obligations, liquidity pressures and a heavy reliance on tuition revenue as underlying concerns.

Its analysis provides added context to the university’s decision to eliminate nearly half of its undergraduate programs and lay off 40 full-time faculty members — changes university leadership has framed as part of a strategic shift toward high-demand fields like business, health care and technology.

The Business Journal spoke with multiple faculty members throughout the week, some impacted by the layoffs and others unaffected, that collectively criticized the decision.

“There was no strategy, no consultation of faculty,” one JU professor told the Business Journal. “Everything’s been very hushed and rushed.”

he committee report paints a detailed picture of what hampered the university’s budget: a mix of long-term debt obligations, liquidity pressures, modest operating deficits and over-dependence on tuition revenue.

It argued administrators made poor strategic decisions for years and lacked processes to address declining enrollment in certain programs.

“JU’s financial crises is the result of long-term systemic decision-making failures,” the report said, “especially in debt and capital strategy, revenue diversification, risk communication and faculty exclusion from institutional planning.”

A JU spokesperson said the administration worked on the planning and evaluation of its decision-making in close collaboration with faculty...

....The committee document outlines the private university's financial health timeline starting in 2016 through the present. 2024 is noted as the "crisis point" in the report. It also contains a 2025 to 2026 outlook with predictions about potential cuts and factors contributing to JU's financial instability.

Among other key takeaways, the report delved into JU's long-term vulnerabilities and pinpoints the university's leaders as potentially the most responsible for where JU is now.

A year ago, JU failed to meet a key debt covenant, sparking concerns over the university’s long-term future and raising red flags with both auditors and accreditors. The university’s long-term debt exceeded $143 million, per last year’s report.

In December, the Southern Association of Colleges and Schools Commission on Colleges, which accredits JU, imposed a warning on the university for failing to demonstrate compliance with the standard of expecting an institution to manage its financial resources in a responsible manner.

Before breaching its debt covenant, JU appeared financially stable. However, the report indicated that this stability was largely driven by atypical investment gains, masking deeper structural deficits.

According to the report, those gains were tied to strong stock market performance, one-time portfolio increases, unrealized endowment returns and asset revaluations — all of which are not considered core revenue sources like tuition, services or research.

The report noted that notable surpluses in 2018-2019 and 2021 were market-driven rather than the result of operational improvements. Because these gains are often restricted, nonrecurring and sensitive to market fluctuations, they cannot reliably support the university’s general operations or long-term financial health.

Although the university posted surpluses those years, "operating margins, revenues minus expenses from core university functions, remained slim or negative," the report said. That may have delayed recognition of structural imbalance, the report argued, and noted how it also likely contributed to the "underreacting until the FY2024 crisis."

The university contends that this week's cuts were the result of a long-term strategic plan with the national higher education landscape in mind....

https://www.bizjournals.com/jacksonville/news/2025/04/17/jacksonville-university-cut-budget.html?utm_source=st&utm_medium=en&utm_campaign=BN&utm_content=JA&ana=e_JA_BN&j=39482021&senddate=2025-04-17