Confusion prevails around distance education money

Hundreds of thousands of SIU dollars earmarked for everything from scholarships to equipment to student travel is suddenly at the center of a mystery, with department directors and faculty wondering where it is or whether it even exists.

The money is from Distance Education (DE) funds promised to SIU’s departments in exchange for the work required to put classes online.

“The School of Journalism and Advertising jumped at the opportunity to offer an online degree and as a result, the DE (distance education) funds have been a critical stream of revenue for us and the college,” said Jan Thompson, the director of the School of Journalism and Advertising. “For instance, I need to replace 25 computers in the newsroom and 40 computers in two classrooms. I was going to use DE money…but, I can’t plan for that because it is not clear if there will be DE money. We have heard there may be no money.”

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Thompson said she remembers the distance education program was started by former Chancellor Rita Cheng.

“[It started] as an incentive for departments and schools to start to offer online courses-the department/school would get a cut of the revenue,” Thompson said. “I think it has been around 40-50%.”

Chancellor Austin Lane told the Faculty Senate the distance education promise came at a time when the university was in deficit spending mode because of extreme cutbacks in funding from the state legislature. Before questioning Lane, the senate said it had received inquiries from three different colleges about the matter.

“During economic hard times, this was extremely important, because of financial difficulties we had,” philosophy Professor Kenneth Stikkers said. “There wasn’t any money for doing a lot of things like faculty travel. There was no money at all for faculty to travel, let alone student travel. And so the DE (distance education) money was extremely important. Eventually, things got so bad that the administration was not distributing that money for a while, it was such hard straits. And people complained, they said, ‘Well, you know, there’s no incentive to offer these courses [online] if there’s not some kind of benefit.”

The “hard straits” the university was going through were nothing short of 37.8 million dollars in state appropriations that SIU was forced to go without, thanks to the state budget impasse of 2015, which continued to disrupt funding to state-funded universities and government agencies across Illinois until late in 2017.

Before the 2015 budget impasse, in 2002, the university had hit an all-time high in state appropriations, receiving $130.6 million dollars in funding directly from the state of Illinois. In early 2015, before Bruce Rauner’s state budget would have taken effect if all went smoothly in the state legislature, SIU received a more average appropriation sum of $101.6 million, sufficient to continue operations as normal. In the financial year (FY) 2016, SIU received a scant $29.27 million dollars when SIU administration was anticipating more than three times that amount.

Set on his “Turnaround Agenda,” then newly-elected Governor Brunce Rauner had begun to veto all attempts at passing a new state budget, which would span the second half of 2015 and the first half of 2016. This included most state funding offered to universities, with only half measures for purposes of damage control making it through to SIU’s coffers.

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The resulting $29.28 million would be the only money SIU saw from the state for the rest of 2016. In early 2017, SIU received approximately $54 million in state appropriations, which it was forced to immediately apply to its expenses from 2016. Although the university would receive an additional $47.54 million dollars in 2017, great damage was already done.

In 2017, SIU was forced to run itself using only that last sum of $47.54 million, in addition to its other incomes. According to Interim Associate Provost Marc Morris, as a result of this hardship in 2017, as well as the previous year’s greatly reduced budget, the university began to dig deep for the funds to continue running.

Morris said the university ran its accounts at a deficit, spending more funds than it had in order to stay functional after the unexpected drop in state aid. When addressing the Faculty Senate on the issue of distance education funds, Lane called it money that the university had taken from its “reserves.” In doing this, SIU incurred no interest rates, or fees of any kind according to Morris.

However, SIU’s then-administration understood it was vital that the university’s accounts were balanced again for the sake of the long term sustainability of SIU. For this purpose, it drafted the Financial Sustainability Plan. The plan made large reductions to the university’s budget in a variety of areas, to be distributed across future academic years.

In order to pay off the $37.8 million deficit created by the 2017 financial year, the university needed to squeeze money out of certain programs and make funding cuts where possible. Distance education funds were one of the funds that past administrations chose to cut. Despite the fact that distance education funds are derived from tuition, in part, and make their own income every financial year, SIU chose to direct some of the DE funds into paying off the deficit over a seven-year period, Morris said.

Lane told the Faculty Senate the plan would be paid off in 2024, adding that SIU left $8 million dollars from this year’s budget to contribute to paying the deficit and $5.4 million the year before.

This is the cause of great confusion currently because, unlike other budgets offered by SIU, the funding offered from the distance education program have been rolled over from year to year. All of these factors led  departments and some professors, such as Professor Robert Hahn, to accumulate large amounts of money, which they expected to be able to spend regardless of time passed.

“So Hahn, Professor Hahn, he teaches a lot of online courses,” said Stikkers. “So he generates a lot of money and he had made an arrangement because he conducts the study tour to Egypt. He conducts several [study tours] each year, and he had made a kind of a deal – not quite sure who would sign off on this, probably the dean – that some of these monies would be directed to fund the students and help enable them to go out on these studies, and so he had promised money as scholarships to students who want to do this.”

Stikkers first heard of the issue when Professor Jonathan Bean, director of the School of History and Philosophy, passed down a notification telling the rest of the school that the distance education funds would no longer be available and that travel expenses for professors wouldn’t be covered to the same extent as before. For this story, Bean told the Daily Egyptian that he had no comment on the situation.

“I think the frustration is not knowing how to plan as this issue only recently was presented to the chairs and directors,” Thompson said. “So, we are kind of in a state of paralysis and of course this causes anxiety at many different levels.”

What has confused SIU staff and students in recent weeks is the seemingly sudden lack of distance education funds from past years that many schools at SIU still considered to be spendable.

Some of the faculty members at the senate meeting Lane addressed couldn’t contain their criticism, calling SIU’s communication in this instance unacceptable.

“We all understand that we were in a budget issue and that there’s money to be repaid,” said Bethany Rader, vice president of the Faculty Senate and associate professor of microbiology. “The problem was miscommunication, because we’re told we have a certain amount of money – DE funds or indirect funds that go into a pot for our department – and then we as a faculty get to make decisions about this money. And then we thought we had a certain amount and then, all of the sudden we’re told ‘no, you have no money.’[….] and then when we approached our school director, and through him our dean, again it just seemed like people were being told completely different things.”

Lane said that he understood the issues that faculty were having, and explained that the deans and directors likely didn’t have the most accurate information. Lane said he was confused himself when he was first hired and the CFO explained the DE funds to him. He made the same mistake as the university’s staff, once believing that the DE funds were still available for him to spend, he said.

“If you have something that you have commitments on right now, I would suggest that you bring that forward if that’s something that you’re unable to pay for,” Lane said. “Because as Marc is working on now with Bob and with our CFO – they’re working on that plan between now and the end of the fiscal year.  I would offer that – because we’ve got commitments already that are being covered – if you’ve got something that you were really counting on just make sure it hits the list that Mark and that group are putting together as priorities so they can take a hard look at it.”

Other faculty at the meeting also expressed that they had been confused by the university’s recent actions, with some stating that they had thought SIU was on the verge of canceling DE funds completely. The faculty’s main concern was that they were only informed of the lack of DE funds in the middle of the fiscal year, rather than at the beginning of the year when they were budgeting.

Faculty members at the senate meeting said the miscommunication is a problem because it affects decisions they make on a daily basis.

According to Lane, allowing the schools to continue to spend money that only exists on paper, as if it still exists at all, will only dig the university deeper into debt. By all appearances, this year SIU administration has decided to put its foot down on the issue, preventing schools from spending the distance education money.

“Every year we’ve got a carry forward amount that essentially was just an amount on paper. That was not real revenue to the institution at all,” Lane told the senate. “I think that’s the myth that was out there – that there were some carry over dollars that actually existed for people to use. Instead, it was carried over on paper and we operated for years, back to 2015, from what we call budget-deficit spending. We set our budgets based on deficits, because we knew every year we were gonna have to plug the hole from the sustainability plan.”

According to Lane, the university would go $14 million dollars deeper into debt this year if schools were permitted to use distance education funds as they were earlier in the financial year.

Stikkers said this left Hahn and other professors, who may have planned to use distance education funds, in the awkward position of having promised students large amounts of money in scholarships, only to have the funding taken out from underneath them. Hahn was not responsive to requests for comment.

Past students of Hahn, who traveled with him, say that the experience was as memorable as it was expensive, citing the scholarship he offered as the key reason they were able to go on the trip.

“A big selling point of going on trips this summer was that there was a $1,000 scholarship available to the first 10 people in each group,” said Stefanie Doty, an undergraduate student who accompanied Hahn’s Greek travel group last summer thanks to one of his scholarships. “I planned on going to Egypt with that scholarship.”

Though Doty can’t say that the scholarships were the only factor in her canceling her membership in the Egypt travel group this summer, she did cancel for financial reasons, on which the scholarship had a large impact.

“This scholarship was really important for why it went last time. I mean, it’s a really big deal. Takes a really big chunk of money off,” Doty said. “I was signed up and registered to go and then I heard the bad news. And it was kind of up in the air. I didn’t really know what happened. It seemed like it was – it seems a little odd.”

The Daily Egyptian reached out to SIU’s accounting department, as well as the university’s budget office, but both were unresponsive. In SIU’s study abroad portal the Egypt travel group is estimated to cost $3,490.00 before tuition, round trip airfare, passport costs and other optional additions to the trip. With the addition of the portal’s estimate of these other expenses for the average student, the total price was $7,873.75.

Despite the incredible expense, Doty says that her trip to Greece at a comparable cost was worth it.

“I think traveling abroad helps students stand out from the pack,” Doty said. “And I can honestly say if I had not gone, I would be on a different trajectory right now. It just opened my eyes to so much more around me and what really matters and helps me understand so much more. A lot of people view that trip, especially to Greece, they’re like, ‘oh, I want to travel to Greece.’ This is not the Greece you see on social media. This is the history of the world. You cannot experience that from a book. You just can’t.”

However, for students heading to Egypt this summer, the situation may not be as hopeless as Doty feared.

“We will honor the commitments we made to all of our faculty this semester,” said Dean Joddy Murray of the College of Liberal Arts. “However, like other units in the university, we are currently reviewing our process for how to best allocate revenue generated by distance education and will employ the most suitable fund for travel grants. The provost’s office is considering our funding requests at this time.”

Despite disruptions to the distance education funds, Morris has indicated that Hahn’s trip is a priority for the College of Liberal Arts, confirming that the school is likely to find the funds somewhere, even if at present there is some disruption.

After her interview with the Daily Egyptian, Doty succeeded in finding a merit scholarship for her trip to Egypt and once again plans to go, but it seems possible that the situation of other students might prohibit going without as many scholarships as were once available.

SIU’s continued low enrollment problem, as well as state appropriations that only reached $101 million again this financial year, tell a story of lasting damage based on the troubled politics of the state, which were only settled when the state legislature overturned one of Rauner’s vetoes.

“If we’re thinking about doing a 2% across the board increase, if we’re thinking about funding those 21 represented unions with increases inside of the increase – that money has to come from somewhere,” Lane said. “So you have to be very careful to not let too much of the money go out of the door when the university may need it to cover additional increases to faculty and staff, because that’s exactly what the money would go towards. Unless we get an amazing state appropriation from the governor where he gives us more – and that probably won’t happen – but that’s something we keep our fingers crossed on.”

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