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Catholic University turns to buyouts and layoffs to cut spending

Cardinal Hall at Catholic University of America. (Jeffrey Porter/For The Washington Post)

Catholic University, a school with direct ties to the Vatican, is trimming staff through layoffs and buyouts because of financial pressures. It is the third private university in the nation’s capital to disclose layoffs in recent weeks.

Thirty-seven positions were cut from a full-time staff of about 1,300, a Catholic spokesman confirmed Thursday. About two-thirds of those affected took voluntary buyouts, and the rest were laid off.

Spokesman Victor Nakas said the cuts are part of an effort to reduce annual academic program costs $10 million by 2018.

This month, Howard University disclosed a cut of 84 staff positions — an action that produced layoffs — and George Washington University revealed a layoff of 46 employees.

These universities, and many others across the country, face various financial concerns that are leading administrators to cut costs. Some have stagnant enrollment in graduate or professional programs. Others are struggling with undergraduate recruiting or high discount rates, which lower their tuition revenue.

Catholic President John Garvey said in an open letter March 25 to the campus community that annual revenue from the university’s law school had declined $10 million since 2010, a reduction of more than a third. Revenue from the school of architecture and planning, he said, was down $2.6 million in that time.

“We all wish that the landscape of higher education looked different and that we weren’t facing these challenges,” Garvey wrote. “But we are.”

Catholic’s solution, Garvey wrote, is a multi-pronged effort at cost control. That includes outsourcing power plant operations, centralizing procurement, reorganizing technology services and moving to a system of “zero-based budgeting.” Garvey wrote the new budget methods will force all units to justify projected expenses “from top to bottom.”

Catholic, founded in 1887 under a papal charter, is overseen by a board of trustees that includes about two dozen church clerics. It had 3,572 undergraduates in the fall, down from 3,713 the year before. It had 3,127 graduate students in the fall, up from 3,012.

Undergraduate tuition and fees this year total $39,726, not counting room and board, according to the College Board. Tuition and fees will rise 3 percent in the next school year, to $40,932.

Catholic’s operating expenses for the year that ended April 30, 2014, totaled $218 million.

None of the 37 positions cut was on the faculty, Nakas said.

Garvey, a former dean of the Boston College law school, was named president of Catholic in 2010.

In the March 25 letter he wrote, “Here are the important points I hope you come away with from reading this message: Neither we nor other higher education institutions can do business as usual. The days of simply raising tuition have ended. We are committed to keeping tuition increases as low as possible.”

Christopher J. Wheatley, an English professor, said the layoffs have reduced administrative staffing in his department and others. That means some phone calls aren’t getting answered, he said. Wheatley said university leaders must do more to tap private donors.  “Boston College, Notre Dame and Georgetown blow us out of the water in terms of fund-raising,” he said, citing other prominent Catholic schools.

Catholic’s endowment in fiscal 2014 was valued at about $309 million, according to a recent study by the National Association of College and University Business Officers and Commonfund Institute. Georgetown University’s endowment was worth $1.46 billion, Boston College’s $2.13 billion and the University of Notre Dame’s $8.04 billion.