University of New Orleans should rejoin LSU system, state board says

Dive Brief:

• The struggling University of New Orleans should return to the Louisiana State University system, the state’s higher education board has recommended. 
• UNO, founded in 1956 as part of the LSU system, transferred to the University of Louisiana system in 2011 amid enrollment declines stemming from Hurricane Katrina damage.
• Transferring the institution back to the LSU system would require state legislation, which Louisiana’s board of regents voted unanimously to recommend at a meeting on Wednesday. 

Dive Insight:

UNO’s enrollment has never fully recovered from the disaster of Katrina nearly two decades ago. The university even grew its student body slightly after the hurricane but has since lost those gains. For the 2023-24 academic year, full-time equivalent enrollment stood at 5,114 students — just over a third of what it was in 2004-05. 

Accompanying those declines has been financial instability. Between fiscal years 2015 and 2024, UNO’s tuition and fee revenue fell about 20% to $65 million.

State fiscal support has also collapsed. Louisiana has gone through “one of the largest higher education disinvestments in the nation,” according to a March feasibility study from the regents on returning UNO to the university system. For UNO, state funding has fallen by just under 45% from two decades ago. 

In addition to cost increases felt throughout higher education, UNO also faces contractual debt obligations such as for bookstore and dining services and a deferred maintenance backlog exceeding $2 billion. 

The report also laid blame with the university, stating that “UNO’s lack of aggressive action to address these issues immediately as they arose has resulted in a deep budget deficit that must be strategically repaired.”

Amid all its many revenue and expense challenges — and despite job cuts and other budget efforts — UNO’s budget gap has reached $30 million, according to the study. 

All of those problems indicate failed thinking behind the university’s transfer into the UL system, according to the regents’ report. Moving UNO into UL’s fold came with an “expectation that new governance would assist in reversing declining enrollment and graduation rates to yield a stronger and more vibrant UNO,” it noted. 

But things did not turn out as planned. “Instead, the institution’s fiscal condition has deteriorated to its current dire state, challenging UNO’s ability to meet its academic, research and community service missions,” the report said

Yet the university “plays a significant role in advancing the intellectual and economic development of the City of New Orleans,” the study argued, pointing to well-regarded programs in jazz studies, naval architecture and marine engineering, hospitality and cybersecurity. 

While the regents voted to recommend the university’s transfer to the LSU system, some board members expressed concern that doing so would just make UNO’s financial troubles a systemwide problem. 

“I just worry that, when you look at the shortfall, you’re taking the shortfall from one area and transferring it to the other,” Regent Dallas Hixson said at Wednesday’s meeting. 

The point of transferring the university to the LSU system would be to “unlock the full potential of UNO, fostering regional prosperity while ensuring a smooth and efficient transfer of governance and leadership,” the feasibility study stated. It offered few details, however, for how that would occur. 

To ensure a smooth transfer, the regents recommended setting up a transition team that would engage the system and UNO leadership. It also called for an in-depth third-party forensic financial audit, as well as program and facilities assessments, to help enumerate and address UNO’s challenges.