The Values of a Dollar

Eric Runestad says the decision to increase financial aid amid budget challenges was guided by Carleton’s values.

In the best of times, says Eric Runestad, Carleton’s new vice president and treasurer, higher education budgeting involves competing priorities. You have a set of resources, and then you make decisions based on an institution’s traditions and values. In harder times, senior leaders have to try to address the economic tumult without sacrificing an organization’s core ideals or competencies.

Runestad began at Carleton on July 1, 2020. At the time, coronavirus deaths in the United States had just surpassed 100,000, there were over 10 million total cases worldwide, and schools of all sizes were unsure whether they would open in the fall. It was a potentially intimidating scenario, but the former vice president for finance and administration at Luther College rose to the occasion (even joining the college’s COVID-19 response team).

“The pandemic has put stress on pretty much every family, institution, and operating budget everywhere. When we have fewer students enrolling, we have less tuition, which is the most significant revenue source within our budget,” says Runestad, who has found himself leaning into Carleton’s values even further as tough decisions cross his desk.

“That requires a significant shift in how we budget to try to offset some of those revenue losses. We also have new expenses that we are incurring for technology, testing, and supplies. Not surprisingly, this creates budget tension.”

We caught up with Runestad, a magna cum laude Concordia graduate, just as students were returning to campus for fall term.

Will financial aid awards be reduced this year?

“The short answer is no. Every February, the college approves a budget that includes how much it will allocate to financial aid in the coming fiscal year, so we had already approved a budget before the extent of the pandemic became clear. While some of our peer institutions decided to reduce the amount of financial aid they would provide, Carleton decided to increase the amount of financial aid budget available on a per-student basis.

“We know we have families whose needs have changed. So while we’re trying to stay fiscally responsible with our budget, we’re also trying to meet those needs for families who have been displaced or are under more financial stress. Our commitment to meeting 100 percent of demonstrated financial need for all enrolled students is enormously important, especially in times like these when there’s more uncertainty for families.”

How is the college staying fiscally responsible?

“We’ve adjusted areas outside of financial aid. We have held faculty and staff compensation flat, suspended retirement contributions for six months, deferred a few capital projects, reduced operating budgets, and agreed to leave some positions unfilled — and the senior leadership team has taken a pay cut. You can see that most of these actions have some effect on people — because roughly two-thirds of our budget is about people, it’s hard to make decisions that don’t affect them. But Carleton is committed to creating an environment where students can be challenged and grow. Times like this cause us to be creative in how we can deliver that.”

What will the need for financial aid support be like next year?

“It’s a challenge to predict, but over time we have seen a steady increase in the amount of need. It is essential that our funding sources keep pace. Philanthropy is an enormous part of how we hope to accomplish that, through the annual fund, gifts for student scholarships, and endowment growth.”

As you get to know Carleton, what’s your overall impression of its budget process so far?

“I see Carleton’s budgeting process, which is led by the dean of the college and involves faculty and staff members and students, as a strong model that provides a lot of contextual knowledge to many constituencies. Faculty, staff, and students who are involved in the process can explain to their colleagues and neighbors down the hall why decisions were made. They can be community ambassadors to help their peers understand the main drivers of our budget and how our academic mission and institutional values drive decision making regardless of economic conditions.

“Those who understand what’s going on under the hood have a deeper understanding of the process, the tradeoffs, and the tough decisions that are a part of the budget process. These are important outcomes that reflect the kind of collaboration that is deeply rooted in the culture of Carleton.”