Understanding the Impact of the Enrollment Workload Adjustment
University of Idaho
March 2, 2012
Keith Ickes
While the Enrollment Workload Adjustment (EWA) has been a focus of attention in terms of new state
funding for at least a decade, the relationship between that funding formula and the overall institutional
state funding has not always been clearly understood. In order to understand the financial impact of
enrollment changes, it is essential that the university leadership have a basic understanding of the
structure of the EWA and the relationship between existing institutional funding levels and current EWA
formula funding.
Summary
Over the past decade the university has reached a relative “equilibrium” with respect to our state
funding. For a number of years we lost EWA-eligible enrollments (at a fairly low rate of cost per credit
hour) but have regained much of that enrollment to the point of being eligible for some new EWA
funding. The result is that our existing state funding is like being paid for having a fixed size box of credit
hours – as long as we replace the credit hours that annually come out of the box with similar credit
hours going back into the box, then that part of our state funding stays the same. If STEM credit hours
come out, then either a like amount of STEM credit hours must go back in or a higher number of nonSTEM hours have to go back in to offset the higher multiplier effect of the STEM hours. If average
undergraduate hours come out (that is, our graduating or leaving students, on average, look like our
overall population in their distribution of coursework in the credit weighting charts), then a like number
of average undergraduate hours need to go back in.
Once the university starts generating additional EWA-eligible credit hours that are in excess of the
number already being funded in “the box”, then we receive funding at the much lower EWA-formula
level and we begin to reduce the overall average state funding per student FTE.
Current EWA Funding Formula
The EWA uses a fairly typical system of multiplier values to “weight” credit hours in a course depending
on the discipline and level of the course. These weights are designed to reflect relative cost differences
in providing instruction in these courses at these academic levels. (See the EWA Weights and Categories
spreadsheet for a more detailed explanation of the weighting factors). ‘WSCH’ in the following table
refers to “weighted” student credit hours.
Based on existing, very general State Board of Education guidelines for submitting course credit hours
for EWA funding, the university has the following EWA-eligible credit hours for the latest EWA
calculation:
Remedial
Lower Division
Upper Division
Masters
Doctoral
1st Prof
EWA SCH
327
130,515
104,176
27,135
7,648
8,186
277,987
EWA WSCH
Ratio
327
178,269
219,167
127,130
58,611
30,084
613,588
1
1.37
2.10
4.69
7.66
3.68
2.21
The “ratio” that is calculated in the right-most column is the average multiplier effect of all of the
courses at that level of instruction. Since lower division humanities courses have a multiplier of 1, and
serve as the base for the entire system of course weights, an overall ratio greater than 1 indicates the
extent to which students at the lower division level are taking courses in STEM or other higher multiplier
disciplines.
The EWA formula funds year-to-year changes in the number of weighted credit hours – currently the
funding rate is $63.20 per weighted student credit hour for any additional credit hours. Growth in EWA
credit hours is calculated on the basis of a three year rolling average.
Assuming the state funded enrollment growth under the current EWA arrangement, the University of
Idaho would receive, on average, the following levels of funding for new enrollment growth:
For an “average” new Freshmen:
$2,251
(@ 26 SCH)
For an “average” undergraduate transfer at the Junior level:
$3,457
(@ 26 SCH)
For an “average” new graduate student:
$5,330
(@ 18 SCH)
This assumes that our enrollment growth approximates the existing distribution of students between
high and low cost – or high and low weighted – credit hours.
Current State Funding
There are sometimes calculations made that attempt to portray the entirety of state support for an
institution in terms of state dollars per student FTE. It is common to see this on a national level when
groups of peer institutions want to compare relative funding levels or as a proxy for a relative cost
model for conducting business when compared to institutions with similar roles and missions.
Knowledgeable financial managers understand that such simplifications eliminate the classic, and
appropriate, business distinction between “fixed” and “variable” costs, treating all costs as if they were
“variable” and a direct function of enrollment. Nevertheless, such comparisons can be useful in
understanding what financial resources are required for a well-run institution, with similar role and
mission, to provide a given quality of instruction and research.
The current (FY12) state funding for the University of Idaho is $77,171,800. The corresponding total
student FTE of funded enrollment, based on EWA-eligible course credit hours, is 9,581 FTE. This is
calculated by looking at credit hours by course level and using the following determinations of FTE
enrollment:
-
30 SCH for one undergraduate FTE;
24 SCH for one masters level FTE;
20 SCH for one doctoral level FTE; and
35 SCH for one first professional level enrollment.
A simple division (total state dollars divided by total EWA-eligible FTE) shows that the University of
Idaho in FY12 is funded, on average, at the level of $8,055 per student FTE.
Current Funding vs. EWA Funding
There are several conclusions that can already be drawn from these two analyses – current state funding
per student and EWA funding for growth:
1. If the institution sustains all of the existing EWA-eligible student credit hours with the same type
of student that now creates those credit hours (graduate, undergraduate, resident, and nonresident waiver recipients), then any growth in EWA-eligible credit hours will be funded at the
current EWA formula level and will result in a reduction in the overall average state funding
per student FTE.
This is the primary reason why all four state institutions have almost always preferred that the
SBOE fund “special allocations” over EWA funding.
This problem occurs because the university is currently funded (on average) at the rate of
$8,055 per FTE and would only be funded $2,251 for an additional UG FTE or even $5,330 for an
additional graduate FTE. In both cases, the funding per new student is well below the existing
university overall average of $8,055.
Example:
Base State Funding
EWA Funding Additional Enrollment
New Total
$77,171,800
$450,200 *
$77,622,000
Funded FTE
Additional UG Enrollment
New Total FTE
9,581
200
9,781
New Funding per FTE
$7,936 per student FTE
*The example EWA increase is determined by taking the projected growth of 200
undergraduates times the average student load of 26 annual credit hours times the average
lower division “ratio” or multiplier of 1.37 time the EWA growth funding rate of $63.20 per
weighted student credit hour: 200*26*1.37*$63.20 = $450,236.
2. If the institution grows, at least in part, through “substitution”, then very different results
happen. For example, if a non-resident undergraduate, who was receiving a full non-resident
tuition waiver, graduates and the institution replaces the resulting lost EWA-eligible credit hours
with credit hours from an additional resident undergraduate student, then our overall EWA
credit hours are preserved and that new resident student effectively continues to support our
average of $8,055 of state funding per student. It is as if that additional resident student was
funded at the full $8,055 of existing state funding, rather than being funded as EWA growth and
at the much lower level of $2,244 per student.
If, in addition, we replace that original graduating non-resident (whose credit hours were “in the
box” due to a waiver) with another non-resident, this time with someone who is receiving a
small scholarship or perhaps even paying full non-resident tuition, then we have improved our
overall per-student funding and have been able to grow our resident enrollment without being
subjected to the very low levels of EWA funding for new enrollment growth.
The Impact of Other State Funding Increases
The material above already demonstrates the problems associated with relying solely on EWA funding
as an explanation for the overall institutional funding. If you take the total state funding of $77,171,800
and divide it by the total EWA-eligible weighted credit hours of 613,588 (in the first chart above), our
total state funding comes to an average of $125.77 per weighted student credit hour. As we noted
above, the current EWA formula funds enrollment growth at the rate of $63.20 per weighted student
credit hour – about one half of the level of our total state funding.
To understand the role other state funding plays in determining the total state funding for the
institution, we can use the earlier example of additional EWA funding, but add to that example several
other possible funding changes:
New (Hypothetical) Example:
Base State Funding
EWA Funding for Additional Enrollment
Occupancy Costs
Salary Increase at 3%
$77,171,800
$450,200
$1,279,400
$2,645,100
Total New Funding
$81,546,500
Current Student FTE
New Student FTE
Total FTE
New calculated total state dollars per student FTE:
9,581
200
9,781
$8,337
Based on this example, other forms of state funding for the institution – other than EWA adjustments –
resulted in an apparent increase in total state dollars per student FTE, whereas, in the example above,
EWA funding alone spread over 200 additional students resulted in an overall decline in total funding
per student FTE.
The situation is further complicated by the fact that the legislature often does not fund the EWA
increases and, in financially lean years, the legislature makes budget reductions in higher education
appropriations that are unrelated to enrollment growth or decline.
What is Included in EWA?
-
-
All credit hours taken by resident students, whether graduate or undergraduate, are
included in the EWA base of credit hours. This includes:
o credit hours taken by faculty, staff and their spouses.
o credit hours taken by senior citizens using the senior citizen discount to take classes.
o credit hours taken by non-employee faculty/staff and spouses under the previous
extended tuition benefit opportunity.
o credit hours taken by high school students in the Dual Enrollment program.
o credit hours taken in “self supporting” programs such as the EMBA or the MAT and
DAT in Athletic training (this will likely change as a result of Board policy changes
now being considered)
All credit hours taken by a maximum of 280 non-resident undergraduates who participate in
the WUE tuition program;
All credit hours taken by non-resident students who have received a waiver of the nonresident fee. There are several State Board of Education (SBOE) caps on the number of such
waivers:
o a maximum of 225 such waivers for Athletics;
o no more than 6% of total enrollment for other non-resident undergraduate waivers;
o There is no SBOE cap on the number of waivers for non-resident graduate students
serving as Teaching Assistants (TAs) or Research Assistants (RA s).
The practice of providing state funding for non-resident students who receive tuition waivers is very
different than most other states - whether or not the state uses a funding formula.
History of EWA – Why we have the formula (Notes from Archie George)
About 1975 the State Board of Education mandated each institution in the state conduct an annual cost
study, according to National Center for Education Management Systems (NCHEMS) procedures. Each
year from about 1978 through 1993 institutional costs were determined not only for instruction, but
also research, public service, academic support, student services, instructional support, independent
operations and scholarships. Funding levels were adjusted annually through the budget request
process, based on head-to-head comparisons of costs for similar academic programs. Unique program
costs, such as for agriculture, law, forestry, dentistry, etc. were not subject to adjustments as they were
not taught at more than institution.
In the early 1990s this cost-study approach was abandoned, largely because program cost estimates
were heavily dependent on faculty self-reporting time-on-task. Institutional leadership realized that
lower instructional cost estimates could be obtained by encouraging faculty to report less time in
instruction and more in research, public service, etc. This trend greatly reduced the perceived integrity
and credibility of the process. In addition, it became clear that allocating additional funding to an
institution had no effect on the costs of the programs that “earned” them, i.e. inexpensive programs did
not gradually become more expensive.
The current weighted-credits approach embedded in the Enrollment Workload Adjustment removed the
troublesome problem of estimating costs yearly and separately at each institution. Instead, weights
were assigned to credit hours taught based on standard, nationally established estimates of
instructional costs by discipline. The first “PSR 1.5-Annual Credit Hour” reports for the EWA were
submitted for fiscal year 1992 and the last “Statewide Cost Study” was based on fiscal year 1993. This
overlap allowed for a relatively smooth transition from one model to the other. The concept of funding
adjustments based on “resident” credit hours only was introduced in 1994.
It’s important to recognize that the separation of costs for instruction, research, public service, etc. is
currently embedded in the EWA procedures and relies on a priori removal of appropriated funding for
non-instructional activities before estimating the value of the weighted credits. In my view, a primary
rationale behind initially using only 33% of the “Base Less System Needs” in the EWA worksheets was to
recognize that much of what colleges and universities do is not instruction. Non-instructional funds
were not intended to be either distributed or redistributed based on student credit hours. There was
also some initial caution lest the EWA have unacceptably high consequences for institutional funding.
Later adoption of the 67% proportion was largely to recognize that the amounts distributed based on
33% were inadequate to fully fund enrollment growth. That was during a period of universal growth
across the state, so the higher proportion was expected to more closely track and reward enrollment
growth at a rate closer to the actual cost of instruction.