By Ben Kiem
AUC’s financial deficit reached a record high in 2023, marking a net loss of 1.2 million euros, as the university continues to grapple with structural financial imbalance and the consequences of the new UvA lecturer policy. The outlook for the future, meanwhile, remains dim.
The 2023 deficit exceeded predictions by approximately two hundred thousand euros, as AUC’s expenditures significantly surpassed the income of around 14.3 million, according to Ingrid van Loon, AUC’s Head of Operations and Finance. The draft budget for 2024 sees the deficit decreasing modestly to a net loss of 1.076 million – an improvement remaining significantly distant from the intended goal of breaking even.
Van Loon says AUC takes the situation “very seriously”, adding, “to be sustainable, an organisation needs to be able to realise a positive result structurally.” AUC has reported a financial deficit in eight of the last ten years.
The current financial situation at AUC cannot be attributed to a single factor but rather stems from a structural issue where expenditures surpass available funds. The implementation of the new UvA lecturer policy (“contourennota”), which grants lecturers more time for scholarly development (and resulted in the cancellation of multiple courses last year), has further strained the already imbalanced finances.
Another contributing factor to the financial imbalance is the high costs associated with the ‘Fixed Services Packages UvA’, covering expenses such as rent for the Academic Building and access to the university library. These costs amount to approximately 3.2 million and are not fully compensated, exceeding AUC’s financial capacity.
At the same time, van Loon expresses confidence in efforts to decrease the deficit and the continued existence of AUC. “There is no reason to think that we should particularly be worried,” she says. In response to the deficit, finance rose to the top of the policy agenda and a project to analyse and improve finances was launched. Anticipating a continuing decrease of the deficit, van Loon believes AUC will be able to reach a net positive result in 2027.
A notable additional burden on the budget includes the expenditure for ‘Management’. Every year, AUC spends north of five hundred thousand euros only on the management activities performed by seven people including the Dean, Director of Education, Heads of Studies and Senior Tutor. Another thirty thousand euros are annually allocated to the course ‘Peace Lab’, which allows a handful of randomly chosen students to participate in educational trips to Rwanda or Kosovo.
To curb the deficit, AUC has two options: decreasing costs and increasing income. The latter, however, will prove difficult to change for AUC, as AUC’s income depends nearly fully on the number of students and diplomas through tuition fee income and government funding. “One obvious way to increase income is not available to us,” notes van Loon. Due to AUC’s nature as a residential programme, AUC cannot simply increase the number of students enrolled, making the possibility to receive more tuition fees or government funding basically impossible.
However, an additional revenue stream will soon be introduced: AUC faces an annual expenditure of around two hundred thousand euros for housing costs related to student rooms that remain vacant for half a month each year. This occurs during the period when third-year students have vacated and first-year students have not yet moved in, spanning from 15 July to 1 August. To compensate for this, a new housing fee – the details of which remain unclear – will be introduced for AUC students starting in 2025-2026.
Van Loon is cautious about discussing additional measures to increase income, noting that they are not yet finalised, but she remains receptive to exploring new avenues. “We are very open-minded, many proposals are on the table and we do not exclude anything a priori,” she says. Van Loon remains similarly reluctant to comment on measures to cut costs, while emphasising that any reductions would be made without “compromising the nature of our programme.”
Another potential avenue to increase income for AUC is by raising the tuition fees. The non-statutory tuition fee (for non-EU students) will see an increase in 24/25 and for two consecutive years thereafter, according to van Loon. The fee for 24/25 will rise to €13,790, representing a nearly one thousand euros increase compared to the previous year. However, van Loon emphasises that this adjustment “was not primarily motivated by the aim of increasing our income, but rather by the fact that in the years 2013-2020, the level of the non-statutory tuition fee has not incorporated inflation rates.”
The total deficit accumulated by AUC is not accounted for as debt for AUC itself, but rather as a shared deficit of the parent universities, UvA and VU. This arrangement naturally subjects AUC to external pressure: “UvA and VU boards expect us, as they do for all faculties, to break even,” van Loon explains, adding, “we are confident in achieving that objective.” The question remains as to when.
Correction 27.02: The previous version incorrectly indicated that the cost of ‘Management’ covered expenses for four individuals, whereas the accurate count is seven. This correction has been implemented to accurately reflect the situation.
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