Kent State University’s financial outlook and ratings remain strong, ensuring it can deliver on its commitment to provide a world-class education and prepare tomorrow’s workforce, as the university has done throughout its 114-year history.
The university is implementing proactive financial measures to position itself for continued success in its mission of providing high-quality education and supporting the success of its students for generations to come.
These key steps come at a time when some smaller universities are struggling – even closing – in Northeast Ohio and state universities across Ohio are adjusting to a change in the state’s funding formula.
President Todd Diacon emphasized the university’s strong financial foundation and comprehensive plans to address current budgetary challenges in his annual financial update to the Kent State community.
“While we closed Fiscal Year 2024 with a $9.9 million deficit, which we covered with reserves, our proactive financial management and long-term planning have positioned us to address these challenges strategically,” Diacon said during his October Talking with Todd webcast to the campus community.
The deficit, the first in more than 20 years, was driven by several key factors, including:
- Maintenance and repairs expenses that were $7.1 million over budget.
- Healthcare benefits expenses that were $6.6 million over budget.
- A $4 million state-mandated tuition discount for the College Credit Plus program that was not historically budgeted.
Being Proactive
To prevent future deficits, Kent State has implemented a hiring and travel freeze and is working to reduce annual expenses by $10 million-$12 million through 2028. These measures will include reorganization, shared services and other cost-containment strategies.
“We must reduce costs to align with projected revenues if we are to thrive in the future," Diacon said. "Fewer administrators, fewer employees, less occupied space on our campuses and a reworking of our benefits are in our future.”
Despite the financial challenges, Kent State continues to maintain its strong financial foundation. The university's bond ratings from Moody’s (Aa3/Stable) and Standard & Poor's (AA-/Stable) reflect its solid financial base and strategic management approach.
“Our careful stewardship has maintained our strong bond ratings, which is a testament to our solid financial position,” Diacon said.
Additionally, Kent State's enrollment has stabilized for the second consecutive year, and the university continues to make significant investments in student success initiatives, including the Flashes Go Further Scholarship Program, which provides full tuition coverage for the university's highest-need students.
"As we partner together on transforming the university, Fiscal Year 2024 must be the only year that we end with an operating deficit," Diacon said. "We are committed to maintaining Kent State's excellence while ensuring long-term financial sustainability."