financing the future of higher education thursday, november 15, 2012 warwick a. arden provost and...
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Financing the Future of Higher Education
Thursday, November 15, 2012
Warwick A. ArdenProvost and Executive Vice Chancellor
European Model of Higher Ed
14th century illustration by Laurentius de Voltolina showing a lecture at the University of Bologna, established in 1088 and often recognized as the first university in the western world. http://www.eng.unibo.it/PortaleEn/University/Our+History/default.htm
Signing of the Morrill Act - 1862
Details about the Morrill Act and it’s impact on American higher education: http://www.aplu.org/page.aspx?pid=2185
The fundamental idea was to offer an opportunity in every State for a liberal and larger education to larger numbers, not merely to those destined to sedentary professions, but to those much needing higher instruction for the world’s business, for the industrial pursuits and professions of life.”
Justin Morrill speaking on the Morrill Act before the Vermont Legislature in 1888
“
The Morrill Act & Land-Grant Colleges
American higher education transformedNC State’s Land Grant Timeline: http://historicalstate.lib.ncsu.edu/timelines/nc-state-s-land-grant
Freshman Class of 1889
Freshman Class of 2012
NC State Enrollment History18
8918
9218
9518
9819
0119
0419
0719
1019
1319
1619
1919
2219
2519
2819
3119
3419
3719
4019
4319
4619
4919
5219
5519
5819
6119
6419
6719
7019
7319
7619
7919
8219
8519
8819
9119
9419
9720
0020
0320
0620
09
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Year
To
tal E
nro
llme
nt
Fall 2012 Total: 34,340Undergraduate: 24,833
Graduate: 9,507
Source: http://www2.acs.ncsu.edu/UPA/enrollmentdata/history/history1889-present.htm
Public FTE Enrollment, Educational Appropriations and Total Educational Revenue per FTE,
United States -- Fiscal 1986-2011
http://www.sheeo.org/finance/shef/SHEF_FY11.pdf or http://www.sheeo.org/finance/shef/shef_data11.htm
Public FTE Enrollment, Educational Appropriations and Total Educational Revenue per FTE,North Carolina -- Fiscal 1986-2011
http://www.sheeo.org/finance/shef/shef_data11.htm
Public FTE Enrollment, Educational Appropriations and Total Educational Revenue per FTE,
California -- Fiscal 1986-2011
http://www.sheeo.org/finance/shef/shef_data11.htm
Higher Education Finance Indicators (Constant Adjusted 2011 Dollars in Millions)
http://www.sheeo.org/finance/shef/SHEF_FY11.pdf or http://www.sheeo.org/finance/shef/shef_data11.htm
State of North Carolina Appropriated Budget2003-04 vs. 2012-13
38%
4%
11%
2%
12%
9%
10%2% 10% 2%
2003-04
Public Schools Community Colleges University of North CarolinaGeneral Government Health & Human Services - MEDICAID Health & Human Services - All OtherJustice & Public Safety Natural & Economic Resources Capital Improvements & Debt ServiceReserves & Adjustments
37%
5%
13%
2%
15%
8%
12%2%
4% 3%
2012-13
Source: North Carolina Office of State Budget and Management
State of North Carolina Appropriated Budget2003-04 to 2012-13
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
Public Schools
Community Colleges
University of North Carolina
General Government
Health & Human Services - MEDICAID
Health & Human Services - All Other
Justice & Public Safety
Natural & Economic Resources
Capital Improvements & Debt Service
Reserves & Adjustments
Mill
ions
Source: North Carolina Office of State Budget and Management
California
*Other includes: Business, Transportation and Housing, State and Consumer Services, Tax Relief, and Environmental Protection Agency (each less than 1 percent of General Fund).
http://www.sco.ca.gov/state_finances_101_state_spending.html
California
http://www.cacs.org/ca/article/44
California
http://www.cacs.org/ca/article/44
The United States• 5% of the world’s population• 25% of the world’s prison population• Incarcerates more people, in absolute numbers and per
capita, than any other nation including China (2nd) and Russia (3rd)
Total annual state spending• More than $44 billion (2007) on incarceration and
related expenses, a 127% jump from 1987• Over the same period, spending on higher education
rose just 21%
Sources: ACLU https://www.aclu.org/files/assets/massincarceration_problems.pdf Pew Center on the States http://www.pewstates.org/research/reports/one-in-100-85899374411
US vs. International Trends in Higher Education
• U.S. ranks 14th in the world in the percentage of 25-34 year-olds with higher education (42%)
• Odds that a young person in the U.S. will be in higher education if his or her parents do not have an upper secondary education: 29%
• Percentage of expenditures on higher education – Across all OECD countries, 30% comes from private sources – In the U.S., 62% comes from private sources
From Organisation for Economic Co-operation and Development (OECD), Education at a Glance 2012 – Country Note United States http://www.oecd.org/education/bycountry/unitedstates/
Source: OECD www.oecd.org/edu/eag2012
Source: OECD www.oecd.org/edu/eag2012
Source: OECD www.oecd.org/edu/eag2012
Source: OECD www.oecd.org/edu/eag2012
Percentage Increases in Total Full-Time Equivalent (FTE) Enrollment in Public Degree‑Granting
Institutions Between Fall 2000 and Fall 2010, by State
SOURCE: The College Board, Trends in College Pricing 2012, Figure 23. trends.collegeboard.org/sites/default/files/college-pricing-2012-full-report_0.pdf
State Appropriations for Higher Education: Total Appropriations in 2011 Dollars (in Billions),
Appropriations per Public FTE Student in 2011 Dollars, and Public FTE Enrollment (in Millions), 1981-82 to 2011-
12
SOURCE: The College Board, Trends in College Pricing 2012, Figure 12B. trends.collegeboard.org/sites/default/files/college-pricing-2012-full-report_0.pdf
Average State Appropriations for Higher Education per $1,000 in Personal Income, 1989-90 to 2011-12
SOURCE: The College Board, Trends in College Pricing 2012, Figure 13A. trends.collegeboard.org/sites/default/files/college-pricing-2012-full-report_0.pdf
State Appropriations for Higher Education per $1,000 in Personal Income, 2011-12 and 5-Year Change from 2006-
07 to 2011-12
SOURCE: The College Board, Trends in College Pricing 2012, Figure 13B. trends.collegeboard.org/sites/default/files/college-pricing-2012-full-report_0.pdf
Inflation-Adjusted Published Tuition and Fees Relative to 1982‑83, 1982‑83 to 2012‑13 (1982‑83 =
100)
SOURCE: The College Board, Trends in College Pricing 2012, Figure 5. trends.collegeboard.org/sites/default/files/college-pricing-2012-full-report_0.pdf
Average In-State Tuition and Fees at Public Four-Year and
Two-Year Institutions, by State, 2012-13 and 5-Year Percentage Change in Inflation-Adjusted Tuition and
Fees, 2007-08 to 2012-13
SOURCE: The College Board, Trends in College Pricing 2012, Figure 7. trends.collegeboard.org/sites/default/files/college-pricing-2012-full-report_0.pdf
Annual Percentage Change in State Appropriations for Higher Education per Full-Time Equivalent (FTE) Student and Percentage Change in Inflation-Adjusted Tuition and Fees at Public Four-Year Institutions, 1981-82 to 2011-12
SOURCE: The College Board, Trends in College Pricing 2012, Figure 12A. trends.collegeboard.org/sites/default/files/college-pricing-2012-full-report_0.pdf
Average Aid per Full-Time Equivalent (FTE) Undergraduate Student in 2011 Dollars, 1996-97 to
2011-12
SOURCE: The College Board, Trends in Student Aid 2012, Figure 3A. http://trends.collegeboard.org/sites/default/files/student-aid-2012-full-report.pdf
Average Aid per Full-Time Equivalent (FTE) Graduate Student
in 2011 Dollars, 1996-97 to 2011-12
SOURCE: The College Board, Trends in Student Aid 2012, Figure 3B. http://trends.collegeboard.org/sites/default/files/student-aid-2012-full-report.pdf
% of Students Who Received Need-Based Scholarship or Grant Aid
Universi
ty of M
arylan
d--Colle
ge Park
Pennsyl
vania
State
Universi
ty--U
niversi
ty Park
Universi
ty of W
isconsin
--Mad
ison
Purdue U
niversi
ty--W
est La
fayett
e
Virginia
Tech
Michiga
n State
Universi
ty
Colorado St
ate Unive
rsity
Universi
ty of Il
linois-
-Urb
ana-C
hampaig
n
Texa
s A&M Unive
rsity-
-College
Stati
on
Universi
ty of F
lorida
Rutgers,
the S
tate U
niversi
ty of N
ew Je
rsey--
New Bru
nswick
Georgi
a Insti
tute of T
echnology
Ohio State
Universi
ty--Columbus
Universi
ty of A
rizona
North Caro
lina S
tate U
niversi
ty--Rale
igh
Iowa Stat
e Unive
rsity
Universi
ty of C
aliforn
ia--D
avis
0
10
20
30
40
50
60
70
27.1 27.9 28.9 30.5 30.8 33.1 34.9 36.0 36.3 37.9 38.2 39.1 40.644.7 45.8
55.363.1
Source: US News 2013 Edition published in 2012 based on data collected by USN&WR.
Average Student Indebtedness
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$16
,841
$17
,317
$18
,386
$19
,523
$21
,247
$22
,716
$22
,975
$23
,299
$23
,320
$23
,725
$24
,140
$24
,180
$24
,320
$24
,840
$27
,286
$29
,455
$33
,530
Source: US News 2013 Edition published in 2012 based on data collected by USN&WR.
NC State University Revenue Budget History2003-04 to 2012-13
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13$0
$100,000,000
$200,000,000
$300,000,000
$400,000,000
$500,000,000
$600,000,000
Tuition & Fees Federal Appropriations State AppropriationsContracts & Grants Sales & Services Gifts & Other Sources
Fall 2012:34,340
Fall 2007:31,802
Fall 2003 enrollment:29,854
Source: NCSU Division of Finance and Resource Management.
Primary Revenue Streams: FY 2009-10FTE
StudentsTuition and fees after deducting discounts and
allowances State appropriations Sum of 2 Sources of Revenue
Institution Name Value Value $ per FTE % of Total Revenue Value $ per FTE % of Total
Revenue Value $ per FTE
NC State 32,198 $170,813,363 $5,305 27% $466,082,224 $14,475 73% $636,895,587 $19,780
Univ. of Florida 51,367 $245,369,000 $4,776 31% $552,200,000 $10,750 69% $797,569,000 $ 15,526
Univ. of California-Davis 49,542 $312,233,000 $6,302 41% $451,146,000 $9,106 59% $763,379,000 $ 15,408
Texas A & M 45,267 $352,744,895 $7,792 43% $466,330,297 $10,301 57% $819,075,192 $18,094
Georgia Tech 24,888 $177,483,251 $7,131 46% $207,583,762 $8,340 54% $385,067,013 $15,471
Univ. of Wisconsin 39,067 $353,705,684 $9,053 47% $399,110,702 $10,216 53% $752,816,386 $19,269
Iowa State 27,185 $210,024,453 $7,725 47% $236,859,958 $8,712 53% $446,884,411 $16,438
Univ. of Arizona 37,617 $329,586,000 $8,761 48% $350,399,000 $9,314 52% $679,985,000 $18,076
Univ. of Maryland 34,404 $360,693,065 $10,484 51% $352,724,815 $10,252 49% $713,417,880 $20,736
Rutgers 38,438 $549,293,000 $14,290 55% $444,009,000 $11,551 45% $993,302,000 $25,841
Virginia Tech 32,732 $285,135,238 $8,711 56% $224,798,431 $6,867 44% $509,933,669 $15,579
Ohio State 93,549 $624,175,569 $6,672 60% $415,211,095 $4,438 40% $1,039,386,664 $11,110
Michigan State Univ. 47,116 $542,389,357 $11,511 60% $355,537,600 $7,546 40% $897,926,957 $19,057
Purdue Univ. 42,517 $494,607,814 $11,633 62% $304,717,108 $7,166 38% $799,324,922 $18,800
Univ. of Illinois at Urbana 50,955 $538,279,363 $10,563 68% $257,231,744 $5,048 32% $795,511,107 $15,612
Colorado State 26,124 $224,350,885 $ 8,587 97% 6,300,000 $241 3% $230,650,885 $8,829
Source: Integrated Postsecondary Education Database System (IPEDS) and BD 701 Budget Reports for UNC System CampusesHighlighted columns used to create graph on the next slide.
$- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
Colorado State
Univ. of IllinoisPurdue Michigan State
Ohio State
Virginia Tech
Rutgers Univ.
Univ. of Maryland
Univ. of Arizona
Iowa State Univ. of Wisconsin
Georgia TechTexas A & M
UC Davis ‐
Univ. of FloridaNC State
State Appropriations per FTE Student
Ne
t T
uit
ion
& F
ee
s p
er
FT
E S
tud
en
t
Comparison of Revenues from State Appropriations per FTE Student, to Revenues from Tuition per FTE Student, FY 2009-10
Source: Integrated Postsecondary Education Database System (IPEDS) and BD 701 Budget Reports for UNC System Campuses.
Diversify Funding
Tuition & Fees $248 M 18%
Federal Appropriations $20 M 2%
State Appropriations $499 M 37%
Contracts & Grants $299 M 22%
Sales & Services $195 M 15%
Gifts & Other Sources $86 M 6%
2012-13 Revenue Budget $1,347 M
Source: NCSU Division of Finance and Resource Management.
Public Investment in Higher Education
• Advocate for continued strong public investment in higher education
• Societal benefit – not just a personal benefit
Tuition & Fees
• Likely to become more important source of funds
• Need to maintain access and affordability
Grow Endowment
$$ $$$ $$$$ $$$$$
Endowment Per StudentNC State & Peers (2010-11)
As of 6/30/12, NC State’s endowment per student totaled $18,264
Source: Voluntary Support of Education (VSE) survey by Council for Aid to Education
• Grow faculty• Improve and add
infrastructure• Critical to graduate
and undergraduate education
Enhance & Grow Research Expenditures
Organizational Excellence
An excellent university is pervasively excellent ... But excellence is not a static target. Achieving excellence requires constant attention, self-assessment, inclusion, and the courage to change and adapt.”
“
The Pathway to the Future: NC State’s 2011-2020 Strategic Plan
Realignment Recommendations
Administrative ConsolidationConsolidate Equity and Diversity Offices
Discontinue Office of Extension, Engagement and Economic Development
Merge Undergraduate Academic Programs and Student Affairs
Business ServicesModify Reporting Lines• Create Business Operations Centers
= completed
Academic ProgramsReview Summer EducationReview Distance EducationReview Academic Science Programs• Review Academic Program Efficiency and
EffectivenessModify Academic Planning Process
Organizational BureaucracyReview Administrative Processes for
EfficiencyReview Policies, Regulations and Rules
Moving Forward
• Multifactorial approach
• Clear vision and strategic priorities
• Not a time for timid leadership