Northern Kentucky University's Board of Regents voted to approve the school's operating budget for the 2025-2026 academic year Wednesday morning. The vote marks the first time in years that NKU has approved an operating budget with a projected positive cash flow.
Since 2022, university leaders have been working to eliminate a massive budget shortfall that NKU says was largely caused by a decline in enrollment and rising expenses during the COVID-19 pandemic. At its peak, NKU says the deficit reached $24 million.
The newly approved budget projects revenues of $221,492,003 and expenses totaling $221,420,592, resulting in a net surplus of $71,411 in the 2026 fiscal year.
This time last year, NKU's board passed a budget with a $4.8 million funding gap, requiring the university to dip into its reserve funds to cover its expenses. The university now says its actual expenses were lower than expected, resulting in a positive balance.
While the surplus for the upcoming school year is relatively small, CFO Chris Calvert says it's a big step in the right direction.
"We went from being in the red to the black," Calvert said. "We do expect to finish fiscal year '25 with positive cash flow. That'll be the first time in five years that we have positive cash flow for a fiscal year and only the third time in 11 years."
In a statement, Board of Regents Chair Nathan Smith celebrated the university's effort to get its finances in order.
"Reaching a balanced budget just two years after a $24 million deficit is a significant milestone, and it didn't happen without hard choices and real sacrifices across the university," Smith said.
In those two years, NKU implemented numerous changes to increase revenue.
In an attempt to boost enrollment in 2023, NKU added six sports to its athletic portfolio and launched its Direct Admit Program, allowing local high school students with a 2.75 GPA or higher to automatically be admitted without applying. The school also raised tuition by 2%.
Less than a year later, in 2024, it raised tuition again, this time by 3%, and also increased the cost of student fees.
University leaders say the tuition and fee hike played a major role in boosting revenue. This past school year, NKU raked in more than $124 million in net tuition, a $11 million increase from the prior year.
The school plans to raise tuition again this fall by nearly 4% for undergraduate students and 2.5% or more for graduate students, depending on the program. Law students will also see their tuition rise by 2.5%.
President Cady Short-Thompson said in a statement that the decision was a difficult but necessary one for the financial health of the school.
"We understand raising tuition and fees is never easy and we do not take that lightly," she said. "This budget reflects our continued commitment to student success and value while continuing to offer the best return on investment in the Commonwealth."
University faculty will still see wage increases under the new budget.
While NKU is back in the black for now, its financial forecast shows a $1.1 million deficit in fiscal year 2027 and a $4.1 million deficit in fiscal year 2028. Despite those projections, Calvert expressed confidence the university would be able to find its way to a balanced budget in those years.
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