photo by: Chad Lawhorn/Journal-World

A giant video board is pictured at the Jayhawk Welcome Center on Feb. 15, 2023.

The University of Kansas is expecting enrollment on its Lawrence campus to grow again next year — but after that, community leaders likely shouldn’t expect much future growth in student numbers.

That’s partially by design, members of the Kansas Board of Regents were told on Wednesday.

Jeff DeWitt, KU’s chief financial officer, told a Regents committee that applications for the 2025-2026 school year are strong, indicating that next year’s freshman class will be sizable and will boost overall enrollment numbers above the new record high that KU set this school year.

“We expect to grow again,” DeWitt told the Regents’ Fiscal Affairs Committee.

What KU doesn’t expect is for that growth to continue, in part, because the university might not be able to afford it.

“Infrastructure wise, growing more would be very expensive,” DeWitt said, noting issues related to housing, increased instruction costs and several other expenses that grow as the number of students rise.

Or more specifically, expenses that grow as the number of in-person students rise. DeWitt said KU still intends to grow the number of students it serves, but is projecting that much of that growth will come through its Jayhawk Global program. That program provides a variety of online classes and training programs to students across the globe.

“We are now at a point of strategy where we don’t really want to grow anymore on campus,” DeWitt said. “We will have this class next year and I think our goal will be to work diligently to maintain that. . . . It is the right size class for the community and everything else. We are where we want to be and our goal is to maintain that and grow in other ways.”

Just maintaining student levels, however, will take some significant investment, DeWitt said. He told the Regents that KU is continuing to work on plans to build approximately 1,000 beds of student housing.

Current plans call for 448 living units of apartment-style student housing to be built as part of the KU Gateway project that includes the renovation of David Booth Kansas Memorial Stadium and the construction of a hotel and other commercial space around the stadium at 11th and Mississippi streets. The student housing component — as well as the hotel — has been proposed but is not part of the first phase of the project, which is expected to be completed in August.

DeWitt also said KU, with help from a consultant, has preliminarily determined that an additional 600 units of dormitory-style student housing also will need to be constructed in the next few years. DeWitt didn’t specify where those dorms may be built, though he did note that KU has made a decision to tear down two of the towers in the Jayhawker Towers complex, and the remaining two towers may have only three to five years of useful life left. The Jayhawker complex is along 15th Street in the central district of the KU campus.

KU essentially has all of its student housing filled to accommodate the record enrollment of 26,887 students, not including the approximately 4,000 students at the KU Medical Center Campus.

DeWitt said KU was particularly interested in building more apartment-style student housing because that seems to be the housing type of choice for many out-of-state students. DeWitt told Regents that recruitment of out-of-state students had been a real key to growing its enrollment

KU’s Fall 2024 class included 9,173 out-of-state students, an increase of 27% from the Fall 2020 class. Out-of-state students comprised about 35% of all students in Fall 2024. That was up from about 30% in Fall 2020, according to figures KU provided the Regents.

DeWitt said KU’s out-of-state enrollment growth has come about from an intentional change in strategy by KU. DeWitt said KU is making much more targeted scholarship offers to out-of-state students, studying how much other schools near the student are likely to offer them. DeWitt said KU has been working to make scholarship offers that are very competitive with what those other schools may offer, while also ensuring that KU is still financially benefiting from the new students.

Whether KU can keep up that type of success in out-of-state enrollment — even to the point of maintaining enrollment levels — is an open question. Higher education leaders for years have been talking about a “demographic cliff” that is expected to hit the industry in 2026. Birthrates during the Great Recession of 2008 declined significantly as families faced economic challenges. As a result, high school classes 18 years later are significantly smaller than average, which is expected to mean universities will be competing for a smaller pool of students for several years.

Regents heard about KU’s growth plans as part of a financial update that looked back on KU’s 2024 fiscal year, which ended in June. KU’s audited financial statements showed operating revenue in fiscal year 2024 grew by about 7.5% to about $1.2 billion. Several areas of operating revenue increased, including a 6% increase in tuition revenue, an 11% increase in grants and contracts, and a 5.3% increase in KU’s auxiliary operations which include athletic events, housing fees and dining revenue.

However, growth in KU’s operating expenses outpaced the university’s growth in operating revenues. Operating expenses grew by 9.8% to about $1.6 billion. KU’s two biggest categories of operating expense are the cost of student instruction and the cost of research activities. Instruction expenses grew by 8.8% to about $501 million, while research expenses grew by 13.2% to about $412 million.

KU’s 2024 finances, however, were greatly aided by a more than 25% increase in non-operating revenue. KU booked $561 million in non-operating revenue, which includes state and federal appropriations, investment income, and gifts, among other items. KU Endowment increased the amount of money it provides to the university by nearly $20 million, or 27%, to help pay for faculty and staff compensation and other operating expenses, according to the audited financial statements.