Good afternoon, everyone, and welcome. It's that wonderful and very particular time of the year again, when our world is filled with sun and color, with leaves and shadow. The University is filled with students, and the students are filled with excitement and energy. We are all enlivened by the promise of the coming months, with the certain knowledge that the challenges and opportunities ahead are worthy of our hard work, that the outcomes are important. We are not yet worn down by the struggle. We'll save that for the spring.
This is an extraordinarily important year in the life of the University. We are still embroiled in a deep recession, and as we move forward we face a stiff economic head wind. While the financial condition of the country (and the world) appears to have stabilized, it is certainly not improving with any rapidity. Unemployment rates are still going up, businesses are still failing and most people are holding on tightly to whatever liquidity they have. I continue to believe that the economic storm will be slow to pass, and if that is the case that its force will drive fundamental changes in higher education, changes that have been waiting in the wings for quite some time. These are times that will try the resilience of the University. If we bend but don't break, they are times of extraordinary opportunity.
I am happy to report that as we face this test we are very strong, indeed. First, let me speak a little bit about last year, the fiscal year concluded this past June 30. As has been the case for 20 years now, we made our budget, finishing fiscal 2009 with a positive operating margin. The bulk of these funds (essentially the difference between revenues and expenditures) flowed directly into unit level gain share accounts, in accord with our policy of many years. A significant amount was added to our fund for emergency financial aid for continuing students and their families. A smaller part of the operating margin was used to support maintenance of the physical plant and specific projects in a number of units. As is appropriate for a nonprofit, only a very small amount was carried forward into the current year in our unrestricted account.
This good financial result was not appreciably impacted by last winter's "realignment" process?the reductions in staff and expenses through which we withdrew $12 million from operations. Although we reduced our staff by 122 positions, we did so in mid-year and provided departing employees with severance equal to their salaries for the remainder of the year, and so there were no funds saved last year. The impact will be felt in the current year, fiscal 2010, and in the years to follow. Those saved dollars are real this year. What then, one might ask, are we doing with them? The largest portion, more than $4.5 million, has gone to support increases in student financial aid, for both undergraduates and graduate students. Another $3.5 million of the realignment funds were used to support new faculty and staff positions, some of which were positions that we needed to refill in the wake of the voluntary severance program. The remainder of the realignment savings was used simply to constrain the overall growth of our expenditures, in an effort to hold down the increase in tuition that we charge our students. And it worked. This year's tuition increase was the lowest, as a percentage, in 10 years.
This fall we are seeing the result of all of these actions, particularly the additional support for students. Our enrollments this fall total to more than 12,000 students, greater than in any year since the post-World War II era. At this moment enrollment among traditional undergraduates stands at just over 4,900, about 60 students over budget, and the growth in quality is unabated. The academic credentials of our new first-year students are even better, you'll notice, than those of last year's class, with nearly half being in the top 10 percent of their high school classes. Enrollments across our graduate programs are up as well, over budget by more than 200 students. Enrollment at the Women's College is over budget this year by a remarkable 6.5 percent, and University College has continued to grow as well. We are in good shape in virtually every sector of the institution. Surely the University of Denver is showing no evidence of the great demise of private higher education that was predicted in the popular press only a few months ago. Good students continue to be attracted to quality and value, even in a bad economy. I'd like to commend all of those in the offices of admission and financial aid, as well as all of you among the individual units who worked so hard on student recruiting this past year, for a truly, truly superb effort.
Thinking now in terms of dollars rather than enrollments, we appear to be on track for another balanced budget this year, our 21st in succession. That being said, though, we are not expecting any great financial windfall associated with headcount enrollments over budget, because financial aid awards are up as well. We expect net tuition income to be just about on budget, and based on a rather long extrapolation, at this point we are planning for another positive operating margin. That extrapolation assumes that the economy remains in its current state of fragile stability and that enrollments remain solid, as they normally do. We are still a tuition-driven institution, and real long-term financial sustainability will accrue only from continued gains in productivity and from the development of additional revenue streams like greater annual giving and a more substantial endowment. We are working hard at all of these things. Last year, in the face of that daunting economic head wind, we were still able to raise more than $43 million in gifts and commitments. While this figure is substantially lower than in the previous two years, it still represents our fourth best year ever. I'd like to thank all of our colleagues in University advancement for their hard work, persistence and their loyalty in a very, very difficult time.
Prudence demands that we continue to be cautious, this year and in the next few years to come. I think that we should all stand back and recognize that the good condition of the University this fall?the strong enrollments, the student quality, the smaller tuition increase, the projection of a balanced budget?all of these results were made possible by the funds saved last June and the fact that we are not awarding merit salary increases this year. They were made possible by you, by your sacrifice, and by the sacrifice of those who are no longer with us. For that sacrifice, and for the good condition of the University that has resulted, I am deeply, deeply grateful. I truly wish that we could reward all of you for your hard work and loyalty in these times. As I indicated in the letter that I sent to you last spring, we gave serious consideration to awarding one-time bonuses. We concluded, though, that given the funds available, such bonuses might be awarded only to a small fraction of the community, when the sacrifice was made by all. And so we have decided on another approach. In the absence of a merit increase, it seems that the least that we might do is to make certain that it doesn't cost you any more to work at DU this year. Following a suggestion that came from the staff advisory council, we will roll back this year's increase in health insurance premiums to zero effective this past July 1, and we will do the same for the increased cost of parking permits. There are some details that remain to be worked out, but you should see a change in your November (or perhaps your December) paychecks. I understand that these actions may make only a small difference, but please know that the gratitude that they seek to convey is very, very great, indeed.
Now, let me speak just a bit about the current year and what we hope to accomplish for our students, for the University community as a whole, and for our good neighbors among the public. We remain a great private University dedicated to the public good, to the proposition of improving the human condition through the lives of our graduates and through the intellect and actions of the University community. Virtually everything that we do is focused on: 1) improving the quality of our academic enterprise, for the benefit of our students; 2) positioning the University as a force for positive change, by improving our visibility and focusing on the impact of what we do for our students and for the countless people outside the world of academia; and 3) ensuring the long-term fiscal viability of the institution. Our major efforts this year are tightly bound up with these objectives.
As I mentioned at Convocation last year, we are turning our focus toward our graduate professional programs, and that will continue this year. The Sturm College of Law is a good example of what can be accomplished by a commitment to quality. Bar passage rates are up by over 18 percentage points in just the past few years, and the capabilities of our law students have grown tremendously as we reduce the size of incoming classes to improve selectivity. We must now raise considerable funds for student aid, to accelerate that process of quality building and to make certain that we preserve our commitment to diversity and inclusion as we do so. The faculty is growing, with the planned addition of 10 new positions over the next five years. One of the most important efforts that the faculty has under way this year is the creation of a new strategic plan that will inform the development of curriculum and scholarship and the shape of that larger faculty. We are also in the middle of a search for a new dean, and the search has opened up new lines of communication among faculty, alumni and the legal community in the region. We should be able to attract an extraordinary person to lead the College of Law as it seeks to become one of the very best in the country.
Over the course of the past few years the Daniels College of Business has grown to be too large, in a manner that has skewed the balance between its undergraduate and graduate populations. We have agreed on a plan to restore that balance by reducing the number of undergraduates in the college, and implementation of that plan has begun this year. The faculty of the Daniels College has worked hard to develop a wonderful new strategic plan. The "Daniels Tomorrow" plan is a very thorough, honest and forward-looking document that I congratulate the faculty and the leadership of the college on for their very fine work in its creation. This year Daniels will move aggressively from planning to implementation, focusing on elements of the plan that involve both curriculum and people. In an effort to help with this process the provost and I have agreed to add six new faculty positions to the college, with seven more to follow in the coming years. Working with Dean Riordan, we will redouble our efforts to raise substantial new funds to support financial aid for Daniels students and further growth of the Daniels faculty.
The Josef Korbel School of International Studies, already ranked 12th in the world, is poised for a major leap forward. In the wake of its naming celebration 18 months ago, we've raised funds amounting to nearly half of the $60 million campaign goal. The new Sié Center for International Security and Diplomacy has been established, and a new addition to Cherrington Hall that houses the Sié Center and the Pardee Center for International Futures was opened just this past August. The school currently has two open endowed faculty chairs and good prospects for funding for a third. Even with the new addition to Cherrington Hall, Korbel is bursting at the seams with students, both graduate students and undergraduates. Certainly this good condition is attributable to the work of the faculty and staff of the school, but it would not have happened without brilliant leadership in the office of the dean. Many of you know that Dean Tom Farer will step down this year after 14 years of leadership, a period during which the school has experienced unparalleled growth in both size and quality. The current condition of the Korbel School and the great opportunities that lie just ahead are a fitting tribute to his skill and determination. The search for a new dean to replace Tom has begun, and we should be able to recruit a real star. This year we want to hire that extraordinary person, successfully launch operations in the Sié Center, continue to make progress on the campaign (focusing on support for students and faculty) and develop an integrated, synergistic set of programs between the Korbel School, the Daniels College and the Sturm College of Law. These interactions have begun with the design of the DU World Executive program, a truly integrated joint master's program linking Korbel and Daniels.
The Morgridge College of Education is poised for a similar leap forward. That beautiful new structure you see over on the corner of Evans and High is its new building, and a successful campaign has also provided the college with three open endowed faculty chairs and a new institute for early childhood learning and literacy. Last year the Morgridge College successfully concluded a long negotiation that resulted in a partnership between the college and the Denver Public Schools to establish the Denver Teacher Residency program, a residency-based teacher preparation program that will ultimately provide DPS with 25 percent of its new teachers each year. A search extending over the past two years yielded a wonderful new dean for the college, Greg Anderson, who joined us this past summer. This year, we must drive all of this good news home by completing the building, hiring the first endowed faculty chair, implementing the Denver Teacher Residency program (for which there were more than 900 applications for the first cohort of 25 students) and accelerating the work of the Early Childhood Institute to make it a focal point of the national movement in this area. In a more general sense, this is the year that we must vigorously move to position the college as a kind of catalyst focused on the resolution of key issues like early childhood education, STEM education, school choice, accountability, access to higher education and the most effective uses of information technology in teaching and learning. We have a wonderful new building, great leadership, a great faculty and the resources to make this happen.
Apart from this focus on our graduate professional schools, we are working hard to build greater national visibility for the University, and few programs are as visible among the general population as athletics. This last year marked another superb effort by our student athletes and by the coaches and staff of the division, resulting in our second straight Directors' Cup as the best Division I-AAA program in the country. No other program along the Front Range of the Rockies, including all of the Division I-A schools, came close. I'd like to offer my congratulations to Vice Chancellor Peg Bradley Doppes, to our wonderful coaches and staff, and most particularly to our extraordinary student athletes for whom, once again, the average GPA and graduation rate exceeded that of the student population as a whole. Looking ahead, 2010 promises to be an even better year, if that's possible. We are going to be very, very strong in several men's and women's sports, but let me offer a particular word of congratulations to our hockey program, which is celebrating its 60th anniversary this year. DU hockey is as old as I am! And as is fitting for such a great occasion, we are ranked No. 1 in the preseason polls.
Many of you know that this past winter we began the development of a plan to expand our visibility by clarifying our image, our brand, for an audience that's reached largely via the Web. The images and language that have been developed over the last few months focus on the great University that we truly are, where we are all engaged in an effort to improve the human condition through the power of our minds and the lives of our students and faculty and staff and alumni. As individuals and as a community, we attack the great issues of our time, exhorting one another to "DU something about it." We invite our new students to "start from a higher place." These are the themes focused on quality, values, commitment and action, and they are imbedded in our new Web site, which went live two weeks ago. It's important to realize that this isn't just marketing or gimmickry.
I'd ask that you all step back for just a minute and think about who we really are and what we really do. Think about research on the environment in NSM, about the bike-sharing program developed by our students, about the Bridge Project, about the Institute for Early Learning and Literacy or the Butler Institute for Families. Think about the biomechanics programs in engineering or Bridges to the Future, or about our Institute for the Advancement of the American Legal System or about our Strategic Issues Program (which is just about to come forward with its report on immigration). There are countless, countless other examples. If you really want to know about what we do, take a look at the "DU something 365" page under the "Current Students" tab on our Web site, where every picture, one for each day of the year, tells a story. We are indeed a very special blend of academic excellence and integrity and inclusion and commitment and action. We are a great private University dedicated to the public good, and we want everyone to know about it.
Let me close by simply saying thank you, one more time. These are challenging, exhilarating, extraordinarily important times for DU and for all of higher education. The good news?the good news?is that as we navigate these turbulent waters we do so with great, great strength. Strength of spirit, strength of mind, and the agility and nerve to take action on good ideas. It is a turning point, and we have the weather gauge?the competitive advantage. I'm convinced that we are headed for a future in which colleges and universities will be judged by the real quality of the education they provide, by the kinds of people they graduate and the manner in which those graduates lead their lives, and by the impact of our intellectual community on the lives of normal, ordinary people. We are that great private University dedicated to the public good. We will be the model. And for that I thank all of you, each and every one of you among the University community. You're No. 1 in my preseason poll.