Rumors vs. Reality

Bunsis Review: Know the Facts

A local AAUP chapter recently conducted a review of Marquette’s publicly available financial information. The review has several methodological problems, and many of the claims made are misleading or factually incorrect.


FACT: The AAUP’s review of publicly available financial information done by Dr. Howard Bunsis was not an independent analysis.

It was organized by the local chapter of the AAUP and completed by a hired consultant who is the past AAUP president at Eastern Michigan University.


FACT: Bunsis’ approach and conclusions are similar to those at dozens of other universities of various sizes across the country over many years.

Bunsis’ report is an advocacy piece produced to support claims made by his AAUP peers. In every case over the years, Bunsis’ conclusions always undermine the university and support the views of the AAUP and similar groups.


FACT: Marquette University remains committed to shared governance and has faculty representation on our University Financial Planning and Review Committee.

The AAUP chapter is not a representative body that is part of the university’s shared governance process.


FACT: The Bunsis review has several methodological problems, and many of the claims made are misleading or factually incorrect.

Marquette undergoes an annual financial audit by independent accounting firm KPMG, and has oversight by the Finance and Risk committee of the Board of Trustees. The KPMG audit report for Marquette is publicly available on the university’s website.


FACT: When benchmarked against National Association of College and University Business Officers industry standards, Marquette’s endowment 10-year return is in the top 35th percentile of institutions reporting this data.

By their nature, endowments are managed for capital preservation and long-term returns. Bunsis compares the performance of Marquette’s endowment to the S&P 500 index of all large cap stocks, which is an unacceptable benchmark for any endowment. The endowment’s investments are reviewed with an Investment Committee, which includes Dr. David Krause, director of Marquette’s Applied Investment Management program and associate professor of practice in the College of Business Administration.


FACT: Bunsis’ conclusion that Marquette generated positive operating cash flows of $52 million in FY20 that could have offset our challenges is false.

$52 million was not calculated properly according to generally accepted accounting principles. Our operating cash flows are largely used to maintain our campus infrastructure and to service our debt obligations as shown in our publicly available cash flow statements. Even still, our challenges from lower enrollment, tuition and discount pressures, and increased costs significantly exceed any one year of operating cash flows.


FACT: Bunsis erroneously states that Marquette’s favorable bond rating from Moody’s was raised in March 2021.

Moody’s did not raise our favorable bond rating in March 2021 – they maintained our A2 rating. Moody’s acknowledged Marquette’s strategic positioning and actions to adjust to evolving market conditions as contributors to the A2 rating. Maintaining a strong rating benefits Marquette in the investment community and in our borrowing rates.


FACT: Marquette’s current building construction projects are funded by donor philanthropy and growth.

The new College of Business Administration building is 100% donor-funded, and the upcoming College of Nursing project is funded by a combination of fundraising and operating revenues from the expected growth of nursing cohorts enabled by the project.


FACT: Marquette’s total Higher Education Emergency Relief Fund (HEERF) institutional allocation of $18.5 million (from HEERF I, II and III combined) covered only a fraction of Marquette’s economic losses incurred in the recent and upcoming years.

COVID-19 related economic losses in Fiscal Year 2021 (July 1, 2020 – June 30, 2021) alone exceeded $45 million from lower enrollment; lost revenues; de-densifying residence halls; and COVID-19-related expenses for testing, quarantine and isolation space, increased cleaning and other mitigation measures. Additionally, over $15.5 million of HEERF funding went directly to our students who demonstrate the most need.


FACT: Bunsis fails to acknowledge any forward-looking information, such as demographics, costs or student enrollments.

Hoping that enrollments recover to pre-pandemic levels is not a good or viable financial strategy, as we saw with this year’s incoming class. According to The Chronicle of Higher Education, higher education is experiencing the biggest financial losses it has ever faced. By its estimates, the cost of the pandemic on colleges will exceed $180 billion. Additionally, the U.S. Labor Department estimates that in the first 12 months of the pandemic, American academic institutions reduced a net total of at least 650,000 workers.



Economic Planning Rumors and Realities

Last Updated: 1/22/21


Marquette has a $12 million surplus – why wasn’t that used to offset budget shortfalls?


A board mandate included in the FY 22 budget includes a 3% operating margin to ensure the sustainability of our mission, and will provide room for investing in projects of strategic priority. We must be prepared for further challenges, like expected declines in university enrollments across the United States or the need to respond to further pandemic challenges.


Why aren’t we using funds from the CARES Act (Coronavirus Aid, Relief and Economic Security) to offset budget shortfalls?


Institutional and Student CARES Act funds are legally permitted to be used during specific purposes and during certain time periods to address challenges related to the pandemic. While we are incredibly grateful for CARES Act Funds, these dollars address only a fraction of the university’s fiscal challenges. Most importantly, the funds help our students remain at Marquette and continue to pursue their degrees. CARES Act funds are not a permanent revenue stream and are not intended to offset future financial challenges.


The University will be receiving $9.7 million under the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act, 2021. Can this be used for any budget shortfalls?


A portion of the new COVID Relief Funds must be used to support students. Under the new law, these funds are limited to very specific purposes and used by a specific time frame. As with the CARES Act, these funds are not a permanent revenue stream and are not intended to offset future financial challenges.

Allowable uses under the CRRSAA for Institutional Portion awards include:

  • Defraying expenses associated with coronavirus (including lost revenue, reimbursement for expenses already incurred, technology costs associated with transition to distance education, faculty and staff trainings and payroll)
  • Carrying out student support activities authorized by the Higher Education Act of 1965, as amended (HEA), that address needs related to coronavirus
  • Making additional financial aid grants to students


Marquette’s motivation for the Economic Planning process comes from the book Demographics and the Demand for Higher Education by Dr. Nathan Grawe. The actions being taken are inconsistent with Grawe’s writings.


Although the University has discussed Grawe’s book and its potential implication on future enrollment, somewhere along the line, the need to think about the long-term future of Marquette became conflated with the actions we are currently undertaking. To be clear, the actions we are taking now are not related to the future demographic shift discussed in Grawe’s book. Marquette has corrected this misunderstanding several times.

The long-term economic challenge we are currently addressing is primarily the result of four factors:

  • We had a substantial drop in enrollment in our fall 2020 first-year class. We further suspect that our first-year classes will be smaller than anticipated for the next several years. Any enrollment change in a class stays with the university for four years.
  • As the result of continued competition to attract students, the university increased its student tuition discount rate. It is likely that the discount rate will remain at these increased levels for the foreseeable future.
  • To control student debt, the university made the decision to hold tuition flat. It will benefit our students if the university continues to move away from the tuition increase levels of recent years.
  • Finally, a board mandate included in the FY 22 budget requires a 3% operating margin to ensure the sustainability of the Mission.

Combined, these factors resulted in a $45 million gap. All the above demonstrate that we are facing a current shortfall that has multi-year implications.

With respect to planning for Marquette’s future, eventually there will be a demographic shift that occurs, and the University will adapt to that shift. We will have campus-wide conversations and gather faculty input as to how the University should address this challenge/opportunity. Indeed, our work groups have been asked to continue considering those long-term factors in their discussions, and two groups are dedicated solely to that pursuit. When these groups submit their reports in May, it will be an opportunity for us to resume the campus conversation we began a few years ago.



Marquette University spent a disproportionate amount on consultants in 2020, and the majority was spent on administrative staff and services.


Marquette University has an appropriately sized annual budget line for professional fees. Professional fees differ greatly from consultancy: Professional fees include a number of items necessary to operate a university of Marquette’s size, including legal fees, accounting fees (including legally required auditing fees), medical services and more. The majority of the professional fees, 73%, are categorized under the provost’s organization to support the academic core of the university. Amounts recorded as consulting fees represent a mere fraction of that.


 Marquette University spends more than most AJCU schools on administrative costs per student, and less than most on instructional costs per student.


Marquette University ranks near the middle of the 27 schools in the Association of Jesuit Colleges and Universities for instructional costs per student and administrative costs per student according to data obtained from IPEDS — the Integrated Postsecondary Education Data System — which gathers information from every college, university, and technical and vocational institution that participates in the federal student financial aid programs.

Further, comparisons with other institutions may be skewed due to differences in accounting structures and allocation methods. Accordingly, the functional cost classification methods that institutions employ for the IPEDS survey may vary widely. Other universities may interpret definitions and classify expenses differently than Marquette. For example, Marquette classifies certain costs within the provost’s office, art museum, online curriculum initiatives  and IT services as institutional support, while other universities may classify all or an allocated portion of these expenses as academic support, instructional costs or student services. One must consider that methods of classifying expenses into functional categories may vary widely in practice when reviewing this data.


 The HSI initiative is no longer a priority to the university.


The university has made it clear that it supports its aspirations of becoming a Hispanic Serving Institution and will continue its work on retaining and recruiting Hispanic students. Intentional efforts at recruiting have increased the number of Hispanic undergraduate students enrolled at Marquette from 10.6% to 14.8% since the fall of 2016. Hispanic students currently receive more than $33 million in university aid to support their Marquette education and rank among the highest in receiving financial support at our university. In addition, to financial assistance, the university continues to support our Hispanic students through an array of university services and a dedicated staff position to oversee the HSI planning efforts.


 The REIS initiative has been stopped.


The Race, Ethnic and Indigenous Studies cluster hiring initiative has served to bring an exciting group of scholars to our campus who are in the formative stages of building a community at Marquette with potential for citywide and national recognition. In the three years since the inception of this program, we have hired more than 20 REIS scholars. As the result of this program and other hiring efforts that have been made, Marquette’s faculty is the most diverse it has ever been in the history of the university. Given current budgetary challenges, the decision was made to cancel some faculty searches, including two of the three new REIS positions that were approved this year. The university retains its commitment to supporting REIS and will continue to do so this year with financial support from the vice president for inclusive excellence. Additionally, as the university conducts searches for strategic growth opportunities, it remains committed to hiring diverse faculty candidates across all disciplines.


 $100 million of the university’s endowment is "unrestricted" and is available to be used for emergency funds, such as the budget shortfalls the university faces now.


The university’s endowment consists of hundreds of gifts given by many donors over time. The endowment is governed by the Board of Trustees-approved Investment and Spending Policies, which follow Wisconsin’s Uniform Prudent Management of Institutional Funds Act (UPMIFA). UPMIFA requires the institution to maintain intergenerational equity, meaning the university must make efforts to preserve purchasing power of the endowment for both current and future generations served by the university. The purpose of the endowment is not to fix short-term budget shortfalls or manage crises like those that many institutions are facing now, but rather to support our Catholic, Jesuit mission and our commitment to academic and research excellence for current and future generations. Most of the funds have been designated by the donors to support student scholarships, academic programs and professorships, so the spendable amount from the endowment does benefit our operating budget. In addition, the “quasi” endowed funds identified as unrestricted are still subject to the university’s Investment and Spending Policies and are currently directed to operating budgets. In other words, the endowment provides an ongoing stream of funding for our students, faculty and programs, and the university is not free to dip into the principal of the fund without facing serious consequences or adversely impacting future generations.