State of The University Address recognizes budget shortfall and enrollment decrease, highlights areas of growth


Anna Drumm

President Ora Hirsch Pescovitz delivering the State of The University Address on Thursday, Oct. 21.

President Ora Hirsch Pescovitz addressed the Oakland University community on Thursday, Oct. 21 during the annual State of The University Address in the Oakland Center (OC) Founder’s Ballrooms. Executive Vice President for Academic Affairs and Provost Britt Rios Ellis presented on the State of Academic Affairs.

The following were discussed: (including but not limited to) the tuition shortfall, expenditures, campus construction projects, graduation rate, graduation rate for Underrepresented Minority (URM) students, COVID-19 collective vaccination status, growth, new leadership and ways to propel the university forward.


Pescovitz said approximately 80% of OU’s revenue is derived from tuition, and about 18% from state appropriation. In 1972, state funding made up 71% of revenue — a number that has decreased to 18% in 2021. According to Pescovitz, this is the lowest of Michigan’s 15 public universities, with $3,079 allocated per student and $53.4 million total.

The “Strive for 45” campaign was created pre-pandemic in an effort to increase the minimum state funding to $4,500 per student.

“The state’s disinvestment in public higher education is negatively impacting revenue at Michigan’s public universities,” Pescovitz said.

Financial aid is distributed in an amount similar to what’s recieved in state appropriation.  In regard to expenses, approximately 80% go to compensation — about the same amount received in tuition revenue.

This year — with enrollment and credit hours down by 8.1% — there is a tuition shortfall of $8.6 million. OU expects an additional shortfall of $7.4 million this winter.

For this fiscal year, the university is expecting a $16 million shortfall of revenue.

“We are concerned this shortfall is not just a short term issue,” Pescovitz said.

To address the budget — OU can increase revenue, attract and attain more students, receive a higher state appropriation, increase philanthropic giving and reduce expenditures, according to Pescovitz.

Campus Construction

The currently active Wilson Hall renovation, expected to be completed by August 2022, cost $21.5 million. The South Foundation Hall renovation, which was seemingly delayed, has an expected completion date of Fall 2023 — costing the university $40 million. Varner Hall’s $45 million renovation has a projected occupancy date of Fall 2023.

“All of these projects are designed to provide our students, faculty and staff with the resources they need to be nurtured in their education, scholarship and research,” Pescovitz said.

According to Pescovitz, these projects are financed through bonds, state capital outlay funds and university reserves.


“To put it simply, our enrollment is down 10% over the past three years,” Rios-Ellis said. 

First-Time Full-Time one year retention rates have declined by 6% — going from 79% in Fall 2019 to 73% in Fall 2020. To combat this, the university wants to enhance students’ first year experience, increase supplemental instruction and improve data use and student success assessment. 

Graduation Rate Gap

There is a persistently large gap between URM students and non-URM students that appears to be increasing, according to Rios-Ellis. Since the 2008 cohort, the six-year graduation rate cap between URM and non-URM students has been between 20 and 25%.

“A commitment to equity within a higher education environment translates to renewing our promise to eliminate achievement gaps, thus reaching our shared goal of educational equity,” Rios-Ellis said.

URM students now represent 22% of OU’s incoming class. Unfortunately, 45% of URM students did not continue at OU this year, as mentioned by Rios-Ellis.

“We will collaborate with student affairs, and Senior Vice President Glenn McIntosh, to create initiatives that focus on Pell-eligible, first generation students and enhance students’ first year experience,” Rios-Ellis said. “…When we re-frame diversity as an asset, we invite ourselves to engage in positive transformation.”

Growth and Improvement since 2010

Since 2010, OU has added the School of Medicine (2011), School of Music, Theatre and Dance (2017), 23 Bachelor’s programs, increased full-time faculty from 536 to 638 faculty members, among other feats.

OU has also brought in new leadership — Elaine Carey, Ph.D, Dean of the College of Arts and Sciences, and Mohamed Al-Shabrawey, MBBCH (M.D.), M.Sc., Ph.D., Director of the Eye Research Institute.

Diversity Advocate Training has been implemented for search committee members, and OU is now working with Human Resources to engage all Faculty Affairs staff and faculty in Implicit Bias Training.

Pescovitz’s Closing Statement

To conclude the State of The University Address, Pescovitz stressed — “let the healing begin.”

“Let’s move forward together as one community,” she said. “Thank you for all your hard work and commitment to Oakland University.”