Financing the Future
of Higher Education
Thursday, November 15, 2012
Warwick A. Arden
Provost 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 transformed
NC 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 History
35,000
30,000
Total Enrollment
25,000
20,000
15,000
Fall 2012 Total: 34,340
Undergraduate: 24,833
Graduate: 9,507
10,000
0
1889
1892
1895
1898
1901
1904
1907
1910
1913
1916
1919
1922
1925
1928
1931
1934
1937
1940
1943
1946
1949
1952
1955
1958
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
5,000
Year
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 Budget
2003-04 vs. 2012-13
2003-04
2%
2012-13
2%
10%
2% 4% 3%
38%
10%
12%
37%
8%
9%
15%
12%
11%
2%
13%
4%
2%
5%
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
Source: North Carolina Office of State Budget and Management
State of North Carolina Appropriated Budget
2003-04 to 2012-13
$8,000
$7,000
$6,000
Public Schools
Community Colleges
University of North Carolina
Millions
$5,000
$4,000
General Government
Health & Human Services - MEDICAID
Health & Human Services - All Other
$3,000
$2,000
Justice & Public Safety
Natural & Economic Resources
Capital Improvements & Debt Service
$1,000
Reserves & Adjustments
$0
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 NeedBased Scholarship or Grant Aid
70
63.1
60
55.3
50
40
30
27.1
27.9
28.9
30.5
30.8
33.1
34.9
36.0
36.3
37.9
20
10
0
Source: US News 2013 Edition published in 2012 based on data collected by USN&WR.
38.2
39.1
40.6
44.7
45.8
$15,000
$10,000
$5,000
$-
Source: US News 2013 Edition published in 2012 based on data collected by USN&WR.
$29,455
$27,286
$24,320
$24,180
$24,140
$23,725
$23,320
$23,299
$22,975
$22,716
$19,523
$18,386
$20,000
$17,317
$25,000
$16,841
$30,000
$21,247
$35,000
$24,840
$40,000
$33,530
Average Student Indebtedness
NC State University Revenue Budget History
2003-04 to 2012-13
$600,000,000
$500,000,000
Fall 2007:
31,802
Fall 2003 enrollment:
29,854
Fall 2012:
34,340
$400,000,000
$300,000,000
$200,000,000
$100,000,000
$0
Tuition & Fees
Federal Appropriations
State Appropriations
Contracts & Grants
Sales & Services
Gifts & Other Sources
Source: NCSU Division of Finance and Resource Management.
Primary Revenue Streams: FY 2009-10
FTE
Students
Tuition and fees after deducting discounts
and allowances
State appropriations
Sum of 2 Sources of Revenue
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
Institution Name
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.
Comparison of Revenues from State Appropriations per FTE
Student, to Revenues from Tuition per FTE Student, FY 2009-10
$16,000
Rutgers Univ.
Net Tuition & Fees per FTE Student
$14,000
$12,000
Purdue
Univ. of Illinois
Michigan State
Univ. of Maryland
$10,000
Iowa State
Virginia Tech
Colorado State
$8,000
Ohio State
$6,000
Univ. of Wisconsin
Univ. of Arizona
Texas A & M
Georgia Tech
UC‐Davis
NC State
Univ. of Florida
$4,000
$2,000
$$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
State Appropriations per FTE Student
$14,000
$16,000
Source: Integrated Postsecondary Education Database System (IPEDS) and BD 701 Budget Reports for UNC System Campuses.
Diversify Funding
2012-13 Revenue Budget
$1,347 M
Gifts & Other Sources
$86 M 6%
Tuition & Fees $248 M
18%
Sales &
Services $195
M 15%
Federal Appropriations
$20 M 2%
Contracts & Grants
$299 M 22%
State Appropriations
$499 M 37%
Source: NCSU Division of Finance and Resource Management.
Public Investment in
Higher Education
• Advocate for continued
strong public investment
in higher education
• Societal benefit – not just
a personal benefit
Tuition & Fees
• Likely to become
more important
source of funds
• Need to maintain
access and
affordability
Grow Endowment
$$
$$$
$$$$
$$$$$
Endowment Per Student
NC 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
Enhance & Grow
Research Expenditures
• Grow faculty
• Improve and add
infrastructure
• Critical to graduate
and undergraduate
education
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 Consolidation
Academic Programs
Review Summer Education
Review Distance Education
Discontinue Office of Extension,
Engagement and Economic Development Review Academic Science Programs
• Review Academic Program Efficiency and
Merge Undergraduate Academic
Effectiveness
Programs and Student Affairs
Modify Academic Planning Process
Consolidate Equity and Diversity Offices
Business Services
Organizational Bureaucracy
Modify Reporting Lines
• Create Business Operations Centers
Review Administrative Processes for
Efficiency
Review Policies, Regulations and Rules
= completed
Moving Forward
• Multifactorial
approach
• Clear vision and
strategic priorities
• Not a time for timid
leadership