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Positioning the College for Financial Success

July 14, 2025

Dear Colleagues,

I hope the summer brings you close to good friends, family, and a refreshing pace of life. The campus is too quiet without our whole cadre of students, faculty, and staff in Salem. 

Last month, College leadership met with the Executive Committee of the Board of Trustees for our annual summer meeting. We celebrated the exciting progress on campus, including the rising McConnon Discovery Center, the upcoming launch of our four new interdisciplinary schools, RC-RV's promising start, and the rapid construction of Maroon Village. The heart of our conversation was centered on ways to support these and other innovations and continue strengthening the College’s finances for a thriving future. 

As you are aware, this is a particularly challenging period for higher education across all sectors—but especially for small, tuition-dependent colleges with modest endowments. National trends show unprecedented pressures on institutions like ours, including:

  • The demographic cliff: The total number of high school graduates is expected to peak this year, followed by a steady decline of more than 10% over the next 15 years.
  • Non-consumption: Not only are there fewer high school graduates, but an increasing number of them are choosing not to attend college at all.
  • Eroding public confidence: The national conversation continues to question the value of a college degree, raising concerns about affordability, student loan debt, workforce relevance, and return on investment.
  • Financial instability: Since the start of the COVID-19 pandemic, roughly 80 institutions—mostly small, tuition-dependent liberal arts colleges—have closed or merged.  
  • Space utilization and deferred maintenance: As enrollments decline, many colleges are reducing their physical footprint, selling or shuttering aging buildings that require costly upkeep.
  • Inflation: The rising cost of labor, materials, food, and utilities continues to outpace the modest annual increases in tuition revenue. 

I wish I could report that Roanoke College was immune to these immense headwinds, but these and other contextual challenges equally impact us. However, we are in a better position to navigate the storms because of the steps we’ve already taken to adapt and innovate.  

Where We’ve Been 

As I have shared previously, when I arrived at the College in July 2022, it became clear that Roanoke has been—and continues to be—navigating a multimillion-dollar structural deficit. Simply put, this means that our underlying budget model is out of balance, with annual shortfalls resulting from recurring expenses exceeding recurring revenues.  

Our strategy to address this gap has been to carefully scale expenses to match revenues over time. That strategy is twofold: 1) to invest in innovative programs, facilities, and partnerships that will increase our revenue through enrollment, philanthropy, and other sources; and 2) to take a disciplined look at our spending, examining policies, procedures, and operational practices to strengthen financial stewardship.

Over the past three years, we have addressed the deficit through various means, including cost reductions and reallocations, federal stimulus funds, utilization of unspent endowment draws, unexpected unrestricted bequests, and other reserves. As David Mowen, vice president for finance and administration, has conveyed in annual updates, while we are able to continue this approach in the short term, our expendable reserves become particularly strained this upcoming fiscal year and in the future.  

Early Actions

As we have deployed these one-time, limited resources, our community has simultaneously taken bold, forward-looking steps to address the structural challenges in our finances and position the College for long-term success. These efforts include:

  • Reducing and reallocating spending: We made the difficult decision to adjust the faculty teaching load, resulting in nearly $1 million in savings, most of which was reallocated to fund faculty and staff raises for the first time in five years, a necessary investment in our people.

We also reimagined the science center project, narrowing its scope to align with strategic priorities and fiscal realities. Today, the McConnon Discovery Center is rising from the ground to open next fall.

A team comprised of representatives from Enrollment Management, Advancement, General Counsel, and Finance worked together to maximize the awarding of all scholarship funds. So far, that effort has led to the release of $4+ million in accumulated unawarded scholarships.

Lastly, we implemented zero-based budgeting (ZBB) to evaluate every dollar we spend, leading to more than $800,000 in savings to date, with additional savings already identified for the coming fiscal year.  

  • Launching curricular and co-curricular innovations: To strengthen enrollment and create new revenue streams, we introduced new co-curricular programs in football, marching band, and competitive cheer—initiatives that have already brought 150 students to the College. Other new programs, including Army ROTC and women’s golf, will launch this year.  

Our faculty are innovating, with nine new academic programs launching last fall, including Accounting, Cannabis Studies, Disability Studies, Human Services Studies, Finance, and Neuroscience, among others. Additional undergraduate programs and two new graduate programs in education and psychology will launch soon. At the same time, faculty have designed and deployed four new interdisciplinary schools, which will transform our academic offerings and opportunities for students this fall.  

We launched RC-RV, a price-differentiated learning initiative focused on adult education and industry credentials, offering flexible modalities and expanded access—including online, hybrid, weekend, evening, undergraduate, graduate, and certificate programs. This effort attracted $1 million in philanthropic support from Peter and Irene Treiber and is already generating new partnerships with local employers and organizations. 

  • Focusing on the endowment: Recognizing the importance of long-term financial sustainability, we redirected our fundraising efforts toward growing the unrestricted endowment and expanding student scholarship support—both essential investments in access, affordability, and our long-term strength. One initiative, the President’s 25, which asks donors to give $25K over five years, has raised $1M in cash and commitments to date, which is being matched up to $1M to support current students.  
  • Envisioning a bold future: We launched “Imagine Roanoke,” a strategic plan rooted in student success, institutional innovation, community partnerships, and financial resilience. Our north star, this plan will guide our focus, spending, and activities in the coming years. 

These collective actions reflect the courage, creativity, and commitment of our campus community. None of this could have happened without the dedication, hard work, and leadership of our faculty and staff. I know it has been challenging, and I simply cannot thank you enough. I am sure that we are laying the foundation for a stronger, more sustainable future—even as we continue to confront real and rising challenges. 

Minding the Gap 

On a positive note, the College’s revenues have remained generally stable, and we have even experienced small incremental gains thanks to growth in net tuition, increased housing occupancy, gains in retention, and the addition of the Linking Lives program.  

Moreover, the College's overall enrollment has remained consistent, ranging from 1,742 to 1,761 over the past few years, with a projected enrollment of 1,760 this fall. While the number of new, first-time, first-year students this year is down slightly, we’ve seen a 40% increase in transfer student deposits over last year, signaling the early success of our new transfer enrollment strategies. Thanks to over 80 transfer deposits for this fall, our entering class will be similar in size to last year's, and our average net tuition goals have been achieved. We’re also optimistic that our retention efforts appear to be paying off, which helps enrollment tremendously. We are hopeful of reaching a first-to-second-year retention goal of 80 percent this fall, marking discernible progress as a result of everyone’s hard work. 

Unfortunately, while there is positive news, as we wait for our innovations to yield long-term benefits and grow revenue, short-term inflationary pressures are outpacing our gains, including:

  • Rising compensation and benefits costs, including a more than 12% increase in health insurance costs.
  • Skyrocketing utility and facilities costs, including essential repairs to ensure safety and functionality. For example, Vice President David Mowen reported to the board at its April 2025 meeting that our electricity bill at that time was $300,000 higher than last year, and inflation in other areas was more than $1 million. We also invested in new roofs, environmental testing, technology, and other necessary basic infrastructure needs.  
  • Reduced annual interest income (by approximately $1 million) as McConnon Discovery Center funds are deployed for the construction of the building.
  • Increased student financial need, putting pressure on endowed scholarships.

Together, these forces (many external, and often invisible) are pushing us in the wrong direction, widening the gap we’ve been working so hard to close.  

Next Steps 

As we begin a new academic and fiscal year, it is time to focus with even more intensity on the College’s finances. Zero-based budgeting has already enabled divisions across campus to strategically reduce, reallocate and, in some cases, combine resources within their areas. The next step is for us to conduct a comprehensive and holistic analysis of institutional costs over which we have some measure of control, and to identify cost containment strategies and reductions.

To do so, we must make some difficult decisions. But I believe that when we face hard truths openly and work through them together, we emerge stronger, more united, and more prepared for the future.  

What does all this mean?

First, regrettably, we will not be able to repeat last year’s college-wide raise pool in this upcoming cycle. However, we will make select market adjustments for our most underpaid employees, particularly those in the lowest wage categories among our faculty and staff. I hope you’ll interpret last year’s raises and the past two years’ increases in the College’s retirement contribution as an expression of our deep desire to invest in our most prized asset—our people.  

Second, over the next three years, the College will take thoughtful, sustained, and carefully considered steps to reduce overall spending by 10% (approximately $7.5 million). These conversations are still in the early stages, and no decisions have been made at this point. To guide us through this process, I will soon appoint a faculty, staff, and trustee Cost Reduction Task Force to develop, review, and recommend reduction strategies for the cabinet’s consideration. This will not be an easy process. Our top priority will be to protect the student experience and maintain our high-quality, broad education. We plan to discuss the task force and its role at the annual town hall meeting on August 20, 2025. 

I recognize that this is challenging news, so let me conclude with a critical point: I don’t know anything more worth fighting for than a 180-year-old institution that has dramatically changed the fortunes of thousands of young people and their families. Since our founding, each generation of stewards has faced challenges to preserve and advance Roanoke College’s essential mission. Now it is our privilege and responsibility to do the same. Both the early actions we’ve taken and the initiatives ahead are essential—not only to honor our financial commitments to those within and beyond our community, but to position Roanoke College to educate students for decades–even centuries–to come.

It can be tempting to give up, settle, or hope someone else will make the hard decisions, but we can see the results of that in the closing of institutions nationwide. As you well know, this chapter in our history is unfolding in a world that is changing faster and more profoundly than ever before, requiring new ways of thinking, resolve, and readiness to act. And we are not alone.  

In 1958, the average lifespan of an S&P 500 company was 61 years. Today, it’s a mere 18 years, one more indicator that it’s hard to adapt and iterate. But we’re not some S&P 500 company; we’re an anchor for a community and a guiding light for thousands of students who want to prepare for a life full of hope and contribution.  

It will take the entire Roanoke College village to win the next few years, and I humbly ask that we all row in the same direction. We have a remarkable community, and I’m grateful for how many of you are so deeply committed to the mission, purpose, and impact of Roanoke College. Thank you.

I know this can sometimes feel impossible, but as Nelson Mandela’s voice reminds me, “It always seems impossible until it is done.” 

Sincerely,
Frank Shushok Jr.
President