The University of Maine System Board of Trustees voted Monday to use reserves, Federal COVID-19 relief money and hiring freezes to close a $5 million budget deficit caused by lower-than-anticipated enrollment and residence hall occupancy at schools across the system.

Board and system leaders said the deficit did not come as a surprise and that they are expecting financial challenges to persist in coming years based on current trends.

“Generally, our board is concerned about the budget and adequately financing our public universities,” said UMaine Board of Trustees chair Trish Riley. “But we are working hard to do everything we can to make sure students in Maine have access to quality and affordable public education.”

The system started the financial year with a $616.7 million budget and up until the board closed some gaps today every campus was facing a deficit except the law school.

The board approved updated budgets with cost-cutting measures at four UMaine schools: Augusta, Fort Kent and Presque Isle and the University of Southern Maine. Budgets at the system’s other schools are to be discussed at future meetings.

Overall enrollment in the system’s seven schools dropped 4.6 percent compared with last fall. In-state enrollment dropped 5.9 percent. As of Sunday, 24,617 students were enrolled, including 17,193 in-state students. Last year at this time, 25,792 students, including 18,278 in-state students, were enrolled.

“This is still a concerning trend,” Vice Chancellor for Academic Affairs Robert Placido said of the decline of in-state enrollment. “After all, we are public institutions and this is our primary mission to serve the citizens of the state.” 

Projected enrollment for the spring semester indicates the system’s financial situation isn’t going to turn around anytime soon. Enrollment for the spring semester is 15 percent lower this year compared to the same time last year. As of Sunday, 10,656 students were enrolled in the system. Last year at this time 12,601 students were enrolled. The enrollment period will remain open until Feb. 15.

The decline in enrollment is a multiyear trend, with student numbers dropping every year for at least five years. There are almost 2,000 fewer students overall than in 2018, a 7 percent decrease.

The most significant drops in enrollment between fall 2021 and fall 2022 are at Fort Kent and Presque Isle.

Two bright spots, however, are that enrollment of Canadian and law school students has increased.

Since 2018, the number of Canadian students enrolled in the UMaine System has almost doubled, from 95 students in Nov. 2018 to 186 students this year. The UMaine System has offered in-state tuition to Canadian students for attendance at Fort Kent and Presque Isle campuses since 2021. Law school enrollment also has risen in the past few years.

The declining enrollment and subsequent financial woes of the UMaine System mirror a nationwide trend in which college-age students wary of taking on debt and unsure about how much a college education will benefit them in the long run are skipping out on higher education in exchange for earning a paycheck in a strong job market, leaving colleges and universities with fewer students and decreased revenue.

Only elite schools across the country seem to be avoiding this fate. Colleges in Maine such as Bates, Bowdoin and Colby received more applications than ever before and boasted historically low acceptance rates in the last fall class application cycle.

But public two- and four-year institutions across the country are taking a hit.

Between the fall of 2019 and 2021, 24 states saw the number of public university students decline by at least 4%, according to the National Student Clearinghouse Research Center.

Maine’s community colleges are an exception. Under an initiative by Gov. Janet Mills to make the state’s community colleges free for recent high school graduates Maine’s community colleges saw significant spikes in enrollment this fall.

Because enrollment and student housing occupancy numbers often don’t precisely match projections, it’s common to have to alter budgets mid-fiscal year, said Ryan Low, UMaine vice chancellor for finance and administration. “We’re doing enrollment projections right now for next fall and if we get that exactly right I will buy everyone here a beer,” he said.

Although Low said it’s not unusual for the system to face a budget deficit, trustee Roger Katz said with federal COVID relief funds gone after this year, reserves being spent, energy costs rising, a decreasing number of college-aged kids in Maine and an unknown future of state appropriations, the system looks like its headed toward a challenging financial future.

“We’re going to have a very difficult budget conversation looking ahead to 2024,” Katz said. “It’s going to involve hard discussions to figure out how we will have a sustainable financial model moving forward.”Riley, the board chair, echoed Katz’s sentiment in an interview following the board meeting, but said the board is working hard to create a fiscally stable and sustainable school system by creating and growing programs that will increase enrollment and lead to well-paying jobs in the state of Maine and by working with the state to decide upon adequate appropriations.

One way to raise revenue would be to increase tuition, but Riley said she hopes it won’t come to that. The state has held in-state tuition, which ranges from around $7,000 to $12,000 depending on the institution, flat for seven of the last 10 years. Riley said the board is keeping in mind what Maine families can afford and will only look toward raising tuition as a last resort.

“We don’t want to make enrollment more challenging,” she said. “But we need revenue to keep the system available for everyone.”