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Financing the Future of Higher Education Thursday, November 15, 2012 Warwick A. Arden Provost and Executive Vice Chancellor.

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Presentation on theme: "Financing the Future of Higher Education Thursday, November 15, 2012 Warwick A. Arden Provost and Executive Vice Chancellor."— Presentation transcript:

1 Financing the Future of Higher Education Thursday, November 15, 2012 Warwick A. Arden Provost and Executive Vice Chancellor

2 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

3 Signing of the Morrill Act - 1862 Details about the Morrill Act and its impact on American higher education: http://www.aplu.org/page.aspx?pid=2185

4 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 worlds business, for the industrial pursuits and professions of life. Justin Morrill speaking on the Morrill Act before the Vermont Legislature in 1888

5 The Morrill Act & Land-Grant Colleges American higher education transformed NC States Land Grant Timeline: http://historicalstate.lib.ncsu.edu/timelines/nc-state-s-land-grant

6 Freshman Class of 1889

7 Freshman Class of 2012

8 NC State Enrollment History Fall 2012 Total: 34,340 Undergraduate: 24,833 Graduate: 9,507 Source: http://www2.acs.ncsu.edu/UPA/enrollmentdata/history/history1889-present.htm

9 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

10 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

11 Public FTE Enrollment, Educational Appropriations and Total Educational Revenue per FTE, California -- Fiscal 1986-2011 http://www.sheeo.org/finance/shef/shef_data11.htm

12 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

13 State of North Carolina Appropriated Budget 2003-04 vs. 2012-13 Source: North Carolina Office of State Budget and Management

14 State of North Carolina Appropriated Budget 2003-04 to 2012-13 Source: North Carolina Office of State Budget and Management

15 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

16 California http://www.cacs.org/ca/article/44

17 California http://www.cacs.org/ca/article/44

18 The United States 5% of the worlds population 25% of the worlds 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

19 US vs. International Trends in Higher Education U.S. ranks 14 th 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/

20 Source: OECD www.oecd.org/edu/eag2012

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24 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

25 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

26 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

27 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

28 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

29 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

30 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

31 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

32 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

33 % of Students Who Received Need- Based Scholarship or Grant Aid Source: US News 2013 Edition published in 2012 based on data collected by USN&WR.

34 Average Student Indebtedness Source: US News 2013 Edition published in 2012 based on data collected by USN&WR.

35 NC State University Revenue Budget History 2003-04 to 2012-13 Fall 2012: 34,340 Fall 2007: 31,802 Fall 2003 enrollment: 29,854 Source: NCSU Division of Finance and Resource Management.

36 Primary Revenue Streams: FY 2009-10 FTE Students Tuition and fees after deducting discounts and allowances State appropriationsSum of 2 Sources of Revenue Institution Name Value $ per FTE % of Total Revenue Value$ per FTE % of Total Revenue Value$ per FTE NC State32,198 $170,813,363 $5,30527% $466,082,224 $14,47573% $636,895,587 $19,780 Univ. of Florida51,367 $245,369,000 $4,77631% $552,200,000 $10,75069% $797,569,000 $ 15,526 Univ. of California-Davis49,542 $312,233,000 $6,30241% $451,146,000 $9,10659% $763,379,000 $ 15,408 Texas A & M45,267 $352,744,895 $7,79243% $466,330,297 $10,30157% $819,075,192 $18,094 Georgia Tech24,888 $177,483,251 $7,13146% $207,583,762 $8,34054% $385,067,013 $15,471 Univ. of Wisconsin39,067 $353,705,684 $9,05347% $399,110,702 $10,21653% $752,816,386 $19,269 Iowa State27,185 $210,024,453 $7,72547% $236,859,958 $8,71253% $446,884,411 $16,438 Univ. of Arizona37,617 $329,586,000 $8,76148% $350,399,000 $9,31452% $679,985,000 $18,076 Univ. of Maryland34,404 $360,693,065 $10,48451% $352,724,815 $10,25249% $713,417,880 $20,736 Rutgers38,438 $549,293,000 $14,29055% $444,009,000 $11,55145% $993,302,000 $25,841 Virginia Tech32,732 $285,135,238 $8,71156% $224,798,431 $6,86744% $509,933,669 $15,579 Ohio State93,549 $624,175,569 $6,67260% $415,211,095 $4,43840% $1,039,386,664 $11,110 Michigan State Univ.47,116 $542,389,357 $11,51160% $355,537,600 $7,54640% $897,926,957 $19,057 Purdue Univ.42,517 $494,607,814 $11,63362% $304,717,108 $7,16638% $799,324,922 $18,800 Univ. of Illinois at Urbana50,955 $538,279,363 $10,56368% $257,231,744 $5,04832% $795,511,107 $15,612 Colorado State26,124 $224,350,885 $ 8,58797% 6,300,000 $2413% $230,650,885 $8,829 Note: State appropriations revenue include Research and Agricultural Extension for land grant institutions. Source: Integrated Postsecondary Education Database System (IPEDS) and BD 701 Budget Reports for UNC System Campuses Highlighted columns used to create graph on the next slide.

37 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.

38 Diversify Funding Source: NCSU Division of Finance and Resource Management.

39 Public Investment in Higher Education Advocate for continued strong public investment in higher education Societal benefit – not just a personal benefit

40 Tuition & Fees Likely to become more important source of funds Need to maintain access and affordability

41 Grow Endowment $$$$$$$$$$$$$$

42 Endowment Per Student NC State & Peers (2010-11) As of 6/30/12, NC States endowment per student totaled $18,264 Source: Voluntary Support of Education (VSE) survey by Council for Aid to Education

43 Grow faculty Improve and add infrastructure Critical to graduate and undergraduate education Enhance & Grow Research Expenditures

44 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 States 2011-2020 Strategic Plan

45 Realignment Recommendations Administrative Consolidation Consolidate Equity and Diversity Offices Discontinue Office of Extension, Engagement and Economic Development Merge Undergraduate Academic Programs and Student Affairs Business Services Modify Reporting Lines Create Business Operations Centers = completed Academic Programs Review Summer Education Review Distance Education Review Academic Science Programs Review Academic Program Efficiency and Effectiveness Modify Academic Planning Process Organizational Bureaucracy Review Administrative Processes for Efficiency Review Policies, Regulations and Rules

46 Moving Forward Multifactorial approach Clear vision and strategic priorities Not a time for timid leadership


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