SDSU endures $800,000 loss in scholarship funds

South Dakota State University will no longer receive the roughly $800,000 annually that had been used to fund student scholarships. This money had been coming from a vaccine royalty which expired in 2016.

The vaccine is for a swine disease known as Porcine Reproductive & Respiratory Syndrome (PRRS), which was originally discovered by researchers at SDSU in the 1980s. In collaboration with the University of Minnesota, SDSU filed for a patent of the vaccine in September of 1991.

Although SDSU has other patents that produce royalties, the PRRS vaccine was substantially larger than any other.

“We do about $2 million to $2.5 million a year in royalties,” said William Aylor, assistant vice president of the Office of Technology Transfer & Commercialization. “Roughly a third to half of that has been from the PRRS vaccine.”

This begs the question: what will happen to student scholarships?

President Barry Dunn said the amount of scholarship money for students won’t decrease in the next year. He hopes to raise the amount of scholarships instead.

As a total, SDSU commits $2 million annually to fund student scholarships. This money comes partially from royalties, such as in the case of the vaccine, but is also generated through laundry services, vending machine revenue and logo licensing.

According to Dunn, student scholarships for current and incoming students will not be affected, despite the massive drop in funding.

“Colleges have some reserves, there’s always a flow of money from tuition and fees, so it’s a matter of allocation.” Dunn said. “Something in the college is just not going to get done that was done before.”

As far as the allocation of funds within SDSU goes, Dunn said there was no central decision being made for the colleges, rather each of the six schools would be allowed to choose how to go about allocating their own funds.

While the university will lose scholarship money due to the expired royalty, another source of scholarship dollars comes from the SDSU Foundation.

“Every year somewhere around $3.6 to $3.7 million of what we raise goes toward student scholarships,” said SDSU Foundation CEO and President Steve Erpenbach. The foundation is not technically part of the university and is funded solely by donors.

The foundation then sends the donated money to the university to be used for anything from student scholarships, to academic and athletic buildings. This money is allocated based on what the donor chooses to support.

In a recent campaign, the SDSU Foundation raised $255 million over six years, as part of a comprehensive campaign, and is averaging roughly $50 million in donations annually.

“In the last campaign there were a lot of building projects. I think moving forward in the next year and beyond, the focus will be on more scholarships for students and faculty support.”

The money the foundation supplies for student scholarships, including the Jackrabbit Guarantee and the Briggs and Lohr Scholarships, will not be affected by the lost royalty, as the money comes from a separate source.

Despite the lost revenue, current and incoming students should expect to see no change in the amount of scholarship money awarded at SDSU.

“We are still committed to doing that, but we will have to find other sources of revenue,” Dunn said. “The pool will stay the same.”