One hundred years after its founding, the University of Baltimore is facing a big challenge.

Enrollment has fallen by nearly half over the last 10 years, while at the same time its faculty ranks have experienced a similar, sharp decline. The urban university serving thousands of preprofessionals is also wrestling with a swollen structural deficit amid cuts in state financial support.

This week, leaders of the university met privately with staff at its parent, the University System of Maryland, to try to iron out a plan to right the ship. The meeting came after university President Kurt Schmoke sent a campuswide email last week, announcing unspecified reductions coming for the school. But faculty and staff say they are in the dark about what that means.

“People want me to look them in the eye and say, ‘Everything’s going to be OK,’” said Barbara Aughenbaugh, the university’s chief financial officer, in an April interview. “It’s hard to say that.”

She added: “Our ability to generate revenue is under duress.”

In an email to faculty and staff on Wednesday evening, Aughenbaugh said that the university is prepared to enact an 8% budget cut through a combination of unspecified reductions to “personnel and non-personnel budget lines.” The CFO did not share how many layoffs, if any, may occur.

There will also be “other actions” which the university is “finalizing with external constituents, including strategic academic program closures and re-designs” across several colleges, she wrote.

Amid the state’s $3 billion deficit, Gov. Wes Moore and the legislature this spring cut more than $150 million from the University System of Maryland. Now, each of the 12 universities in the system is facing cuts of about 7%.

Spread across Mount Vernon in the shadow of the city’s Penn Station, the University of Baltimore was founded in 1925 when a business school and a law school merged. For its first 50 years, the university was private and did not serve undergraduates. It wasn’t until 1975 that the financially struggling university became part of the public University System of Maryland.

Five years ago, the statewide system formed a task force to study problems facing the university, which has four colleges for arts and sciences, business, law and public affairs, along with a campus at the system’s Shady Grove program.

“Tuition revenue is the University of Baltimore’s primary revenue source, and enrollment must be stabilized as the top financial priority," the task force’s 2020 report concluded.

That didn’t happen.

According to the system’s website, enrollment has decreased by nearly 50% in the last 10 years, to 3,232 from 6,422. The number of undergrads has dropped by more than half to 1,477, according to the most recent statistics.

For most of its history, the university served only graduate students and undergraduates as juniors and seniors. It was known as a “finishing school.” In 2008, the UB changed tack, allowing the enrollment of first-year students and sophomores.

But the strategy has faltered. The number of enrolled freshmen dropped dramatically, falling to 33 last year from 226 in 2014. The number of applicants also shrank by 80% during that period.

“There was a big population boom, and the regents decided to change this and allow the University of Baltimore to become an alternative to accept young people straight out of high school,” Schmoke, the university’s president and former three-term Baltimore mayor, said in an interview with the Daily Record in April. “But it’s in our culture now that we primarily serve an adult population.”

It might be in the university’s financial interests to stop enrolling undergraduate students, said Bob Massa, the former dean of enrollment at the Johns Hopkins University who now consults colleges on enrollment strategies.

That might not work well for the university, which is heavily dependent on tuition revenue. A 2018 report, “The Pathway to UB’s Future Success,” concluded that improving the year-over-year retention rate by 100 students could yield over $500,000 in additional revenue for the university.

But that improvement hasn’t been seen. For example, university data shows only 15 of the 25 first-year students in 2023 returned for a second year. The school’s graduation rate stands at 54%, according to the most recent federal data available.

Despite the numbers, Aughenbaugh, the chief financial officer, told faculty last month in a budget meeting that the system “has been very pleased” with the university’s enrollment.

In his email to faculty and staff this month, Schmoke wrote that enrollment is “moving in a positive direction,” especially in the law school, but that “growth is arriving slowly, and that’s not likely to change much in the near term.”

The university’s enrollment projections for the next 10 years target overall growth of 463 students, or a 14% increase.

In recent interviews with a university top official and three faculty members, all of whom declined to be named because of fears of retribution, they pointed to insufficient marketing as an impediment to recruiting more students, an effort which today makes up 1% of the university’s budget.

“Marketing for a college isn’t as simple as a Nike swoosh,” Massa, the university consultant, said. “It’s really an ability to promise students an outcome and, as a condition, a college or university needs to be able to clearly articulate what they stand for, what their values are, what their mission is.”

Marketing has been tricky for the University of Baltimore, which is often confused with the University of Maryland, Baltimore, said Rajesh Mirani, associate professor of information systems in the business school.

Both schools are public and in the city and both have their own law schools, making it hard for potential students to tell them apart.

“We have always struggled with a perception problem and an identity issue,” said Mirani, who has been at UB for more than three decades.

Robert Kelchen, a professor at the University of Tennessee, Knoxville, and an expert in higher education finance, said the way universities find a way out of this kind of financial predicament is through increasing enrollment or making cuts. The best way forward for the university, Kelchen said, might be to merge with another public college.

Aughenbaugh told University of Baltimore faculty this spring that there is a $1.2 million shortfall, which is 2% of the budget. But, on the structural deficit, she would only say in an interview that the university “started this fiscal year at more than $12 million but not $17 million.”

On Wednesday, she provided an update, saying, “UBalt is looking at the trend lines, and electing to disperse the pain to the extent that we can” adding that “UBalt has long-term experience with a scarcity of resources.”

Earlier this month, Schmoke wrote that senior leadership will take a “permanent pay cut” as the university attempts to stop bleeding cash. The university also imposed a hiring and travel freeze.

Schmoke forecasted the tough times in a February message, writing that the university was “being rocked by change, and it won’t end soon.”

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