DSU freezes hiring amid uncertainty on public funding

The freeze will go into effect June 1 and will remain in place through the end of fiscal year 2026, at which time university leaders will reevaluate, according to a memo written by DSU President Tony Allen that was obtained by Spotlight Delaware.

The Dover-based university  has grown significantly in recent years, including acquiring the former Wesley College in Dover, surpassing an enrollment of 6,000 for the first time, raising millions in private donations and building the first new facilities on the campus in a decade.

That growth hasn’t come without its challenges though.

In his April 25 memo to faculty and staff, Allen noted that DSU “achieved these results because we have been disciplined,” including enacting mid-year budget course corrections, greater efficiency through automated tools, and cultivation of a mindset focused on students and growth.

The university also began a tuition increase schedule for the first time in six years beginning in 2023. Last year it increased tuition by $250 per semester, or a 5% increase.

But those efforts could also be dramatically overtaken by a decrease in federal and, or, state support if program cuts under the Trump administration become the norm for higher education.

“With so much uncertainty in Washington, an ever-changing and often volatile market, and the ongoing challenges to delivering a high-value, low-cost education for our students, I have determined that it is now time to implement a hiring freeze until we have greater clarity on the federal landscape’s impact on our state support and a confidence that we can continue on the growth trajectory we have laid out in our strategic plan,” Allen wrote in his memo. “Today, we enter a new phase.”

Hiring for critical roles only

Delaware State University had 229 faculty members across 17 departments, as of last fall. It is currently operating under a critical hiring process led by Executive Vice President Irene Hawkins and Chief Financial Officer Anas Ben Addi, which requires any new hires to be vetted by the administration for their necessity.

Allen said DSU would continue to make staff changes to react to real-time needs, but the “standard for the hurdle for such investments will be high and consistent across the university.” Grant-related research roles will also be closely monitored.

“To be clear, we are focused on bringing in more talent from grants that give us the latitude to do so, but we are not forecasting any grant-related hires into our financial projections beyond the grant period. We will need all principal investigators to abide by this objective,” Allen wrote.

Earlier this year, Delaware State University obtained the R2 research level from the Carnegie Classifications of Institutions of Higher Education – the second highest ranking – making it only the 14th HBCU to achieve that feat.

DSU is not alone is seeking to suppress hiring, as the University of Delaware has enacted criteria-driven hiring, which will limit new staff and faculty hires to those that revenue can support. UD estimates that it can save upward of $8 million annually under the strategy.

DSU finances depend on support

Delaware State University has long contended with a negative net position due to depreciation of its facilities, debt servicing on loans and other long-term pension and benefit liabilities, but has made strides in recent years to build net revenue to help lower that burden. By the end of Fiscal Year 2024, the university had a negative net position of almost $30 million.

A review of DSU’s most recent audits also finds that the university’s recent growth has been significantly supported by an increase in student scholarship and research funding.

More than half of all undergrads are currently on federal Pell grants, which provide scholarship support for college students from low-income families, according to DSU. More than 70 percent of all students are Pell-eligible, which exposes their risk to cuts to that program.

In comparison, only about 18% of University of Delaware students have Pell grants, according to data compiled by Scholarship360, an analytics and services firm.

In Fiscal Year 2024, DSU kept about $45 million from tuition and fee revenue, but also gave $35 million back to students in scholarships. That reliance on support negates, in part, the recent tuition increases at the university.

Meanwhile, DSU saw a 2.5% drop in enrollment this past academic year, dropping from its record of 6,451 in the fall of 2023 to 6,280 this past fall.

One of the university’s most consistent revenue generators in recent years has been federal research grants and contracts, growing nearly 60% from about $25 million a year to nearly $40 million. With the Trump administration cutting those grants and seeking to pare back the available facilities and administrative fees for them, DSU may not be able to rely on that funding for future growth to the same extent.

Those factors are combined with DSU’s longstanding argument that the state government should consider greater support for the institution. With about $46 million in state funds totaling under 20% of its revenues, DSU ranks No. 34 out of all public HBCUs nationwide. Most of its regional HBCU peers exceed 30% in public support and two even exceed 50%.

“First, we are experiencing significant uncertainty on our level of State funding. We also have significant financial exposure both on federal financial aid, including Pell Grants, and research grant funding. Because of that uncertainty, we have pursued these responsible measures to protect the long-term financial sustainability of Delaware State University. University leadership will continue to consider additional cost-cutting measures, including a reduction in the University’s offering of summer camps,” Jonathan Starkey, vice president of government relations at DSU, said in a statement when asked about DSU’s financial position.