Northern Kentucky University expects to finish fiscal year 2025 with positive cash flow for the first time in five years and only the third time in 11 years.
The NKU Board of Regents passed a balanced budget for the upcoming fiscal year during the June 11 meeting. NKU Vice President for Administration and Finance and Chief Financial Officer Chris Calvert presented the fiscal year 2025-2026 operating budget at the meeting.
“Reaching a balanced budget just two years after a $24 million deficit is a significant milestone, and it didn’t happen without hard choices and real sacrifices across our university,” said NKU Board of Regents Chair Nathan Smith. “We’re grateful to everyone who played a part in getting us here.”
The operating budget passed by the board consists of projected revenues of $221,492,003 and expenses of $221,420,592, for a net surplus of $71,411.
“NKU’s fiscal outlook has stabilized,” Calvert said. “By exercising strong fiscal discipline and aligning our resources with our strategic priorities, we’ve achieved a balanced budget—an important step in building long-term financial health for the university.”
Calvert said the university finished off the fiscal year 2024 in the hole of about $5 million and started off the fiscal year 2025 about the same.
“Once we began to recognize our net tuition revenue, primarily our net tuition revenue for the fall semester, we saw that deficit basically break even, and that’s where we were pretty much from August through December,” Calvert said during the meeting.
Calvert announced during the meeting that the university expects to finish fiscal year 2025 with positive cash flow. This comes after a $24 million budget deficit in April 2023 and a $13 million deficit in 2024. He said the university’s key performance indicator is net tuition revenue, primarily due to increased tuition.
The presentation showed that net tuition revenue in fiscal year 2023 was $114.11 million, $113.14 million in fiscal year 2024, and $124.36 million in fiscal year 2025.
As part of the 2025-26 budget, the board approved a 3.9% undergraduate tuition increase for returning students. The change will take effect alongside NKU’s new “Three States, One Rate” initiative, which extends in-state tuition to students from Ohio and Indiana.
“We understand that raising tuition and fees is never easy, and we do not take that lightly,” said NKU President Cady Short-Thompson. “This budget reflects our continued commitment to student success and value while continuing to offer the best return on investment in the commonwealth.”
Though the university saw positive cash flow in fiscal year 2025, Calvert said there was a surprise later in the year that could affect both fiscal year 2025 and 2026 if the Kentucky Department of Revenue does not reconsider.
Calvert said the Kentucky Department of Revenue collects accounts for Kentucky residents who owe the university money. He said NKU had a good track record of collecting most of what was owed. Only about 1.3% of tuition went unpaid. In April, the department of revenue told all public higher education institutions in Kentucky that they were stopping this collection help. This sudden change means the university must assume it won’t collect as much money going forward.
Because of this, NKU has to take a $6.8 million one-time accounting loss for this year. This is a “non-cash” charge, meaning it’s just on paper (not actual money spent), but it still affects the budget. That loss erases the surplus on the books, but it doesn’t eliminate the fact that the university will still have positive cash flow.
“That will erase our positive variance compared to the budget in fiscal year 2025, and it’s very unfortunate,” Calvert said. “It’s also something that, going forward, we will have to account for in fiscal year 2026 and future budgets if we’re unable to get the Kentucky Department of Revenue to reconsider.”
Looking ahead to future budgets, Calvert anticipates a budget deficit for fiscal years 2027 and 2028. He said this is because NKU has begun implementing Workday ERP software into the university, and the implementation exceeds their funding for it at the state level. So, they will have to fund the remainder from local funds.
Workday ERP is a cloud-based enterprise resource planning system that helps organizations manage business functions, including finance, human resources, and operations.
The fiscal year 2027 budget anticipates a $1,106,471 deficit, while the fiscal year 2028 budget anticipates a $4,125,282 deficit.
“We’ll begin to see that impact in fiscal year 2027, and that impact will be increased in fiscal year 2028,” Calvert said. “The best way to overcome that will be revenue increases, either net tuition revenue or state funding. We’ll continue to work on getting state funding from that and continue to work on improving revenue.”
The budgets return to an expected surplus in fiscal years 2029 and 2030.