Strategic Allocation of Resources
ACE’s 87th Annual Meeting
February 14, 2005
James E. Morley, Jr., President
National Association of College and University
Business Officers (NACUBO)
© NACUBO
Overview
• High School Graduate Projections
• Rising Enrollments in Postsecondary
Education
• State Financing of Higher Education
• Changes in Revenue Sources
• Tuition Discounting Trends
• Institutional Debt Levels
Overview (cont.)
• Research and Development
Expenditures
• Charitable Giving Trends
• Title IV Funding
• Foreign Student Enrollments in U.S.
Institutions
• Resources and Successful Practices
High School Graduates
• The number of high school
graduates will continue to
steadily rise over the next five
years.
– In 1988, 2.8 million high school
graduates
– In 2013, 3.2 million estimated
High School Graduates
High School Graduates With Projections, 1988-2013
3,500
3,000
In Thousands
2,500
2,000
1,500
1,000
500
13
20
12
20
11
20
09
10
20
20
08
20
06
07
20
20
04
05
20
20
03
02
20
20
01
00
20
20
98
99
19
19
97
19
96
95
19
19
93
94
19
19
91
92
19
19
89
90
19
19
19
88
0
Year Ending
Total Number of High School Graduates
Total Public High School Graduates
Total Private High School Graduates
Source: U.S. Department of Education. National Center for Education Statistics. Projections of Education Statistics to 2013. Data from 2002 to 2013 are projected.
Rising Postsecondary Enrollments
• Increasing number of high school graduates
expected to impact postsecondary enrollments.
• Enrollment Growth (year = number of
students)
– 1950 = 2.3 million
– 1990 = 13.8 million
– 2004 = 16.5 million (projected)
– 2013 = 18.2 million (projected)
Source: U.S. Department of Education. National Center for Education Statistics. Digest of Education Statistics 2003 and
Projections of Education Statistics to 2013.
Rising Postsecondary Enrollments
• Carnevale and Fry attributes
increases to:
–a rise in births from 1982 to
1996
–immigration
–increase in older students
going to college
Postsecondary Enrollments by Sector
Total Fall Enrollment in Degree-Granting Institutions, 1947-2013
20,000,000
18,000,000
16,000,000
(In Thousands)
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
Total
Public
Private
4,000,000
2,000,000
19
47
19
50
19
53
19
57
19
63
19
66
19
69
19
72
19
75
19
78
19
81
19
84
19
87
19
90
19
93
19
96
19
97
20
00
20
03
20
06
20
09
20
12
0
Source: U.S. Department of Education. National Center for Education Statistics. Digest of Education Statistics 2003 and Projections of Education Statistics
to 2013. Data for years 2001-2013 are projected.
Postsecondary Enrollments by Type
Total Fall Enrollment With Projections at All Degree-Granting Institutions by 2-year
and 4-year Classification
20,000,000
18,000,000
16,000,000
In Thousands
14,000,000
12,000,000
Total
4-year
2-year
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
11
09
07
05
03
01
99
97
95
13
20
20
20
20
20
20
20
19
19
19
93
19
91
19
89
19
85
83
81
79
77
75
73
71
69
67
87
19
19
19
19
19
19
19
19
19
19
19
19
65
-
Source: U.S. Department of Education. National Center for Education Statistics. Digest of Education Statistics 2003 and Projections of Education Statistics to 2013. Date from 2002 to 2013 are
projected.
State Appropriations for
Higher Education
• For FY04-05, appropriations rose by
3.8 percent, to $63 billion.
• 11 states still froze or cut
appropriations of state tax funds
between FY04 to FY05.
• In seven states where higher
education spending increased, the
increases were not enough to make
up for the prior two years of cuts.
State Appropriations vs. Enrollment
$70,000,000
17,000
$60,000,000
16,500
16,000
$50,000,000
15,500
$40,000,000
15,000
$30,000,000
14,500
$20,000,000
14,000
$10,000,000
13,500
$-
13,000
FY95
FY00
FY03
FY04
FY05
Total Appropriations (in thousands)
Total Fall Enrollment (in thousands)
Source: U.S. Department of Education, National Center for Education Statistics, Integrated Postsecondary Education System, Fall Enrollment
Survey, various years. Total fall enrollment for FY03, FY04, and FY05 are projected.
Total Fall Enrollment (in thousands)
Total Appropriations (in thousands)
State Appropriations for Higher Education Operating
Expenses Compared to Total Fall Enrollment for All
Degree-Granting Institutions
Revenue Sources for Publics
• In 2000-01, state appropriations
contributed 31.9 percent in current funds
revenue.
• Total dollars have increased $37 billion
over 20 years.
• From 1980-81 to 2000-01, state
appropriations as a percentage of campus
budgets declined by 12 percentage points.
Revenue at Public Institutions
Major Current-Fund Revenue Sources for
All Public Degree-Granting Institutions
100%
Percentage Distribution
80%
Other
Federal Grants and Contracts
60%
Tuition and Fees
Sales and Services
40%
State Appropriations
20%
0%
1980-81
1985-86
1990-91
1996-97
2000-01
Source: U.S. Department of Education. National Center for Education Statistics. Digest of Education Statistics 2003
.
Revenue Sources for Privates
• Tuition and Fees continue to be the
major current-fund revenue source.
• Revenue from private gifts and
grants and endowment income has
remained relatively constant,
contributing around 9 percent and 5
percent, respectively, towards
campus budgets.
Revenue at Private Institutions
100%
Major Current-Fund Revenue Sources for All Private DegreeGranting Institutions
90%
Percentage Distribution
80%
70%
Other
60%
Endow ment Income
50%
Private Gifts and Grants
40%
Federal Grants and Contracts
Sales and Services
30%
Tuition and Fees
20%
10%
0%
1980-81
1985-86
1990-91
1995-96
Source: U.S Department of Education. National Center for Education Statistics. Digest of Education Statistics 2003.
Tuition Discounting
2003 NACUBO Tuition Discounting Survey
• Institutional Categories:
– SCLT - Small College, Lower Tuition
• Enrollment < 850, Tuition and Fees
< $22,260
– SCHT - Small College, Higher Tuition
• Enrollment < 850, Tuition and Fees
> $22,260
– LCU - Large Colleges and Universities
• Enrollment > 850
Average Tuition Discount
Among private institutions, average tuition discounts per FTE
Freshmen are creeping up:
Small colleges, lower tuition
43.0% (2003) vs. 34.2% (1994)
Small colleges, higher tuition
38.1% (2003) vs. 33.3% (1994)
Large colleges and universities
33.4% (2003) vs. 27.8% (1994)
Average
40.0% (2003) vs. 32.8% (1994)
Source: NACUBO 2003 Tuition Discounting Study
Average Tuition Discount, FTE Freshmen
Financial Aid as a % of Tuition and Fees
45%
40%
35%
30%
25%
SCLT
LCU
20%
SCHT
All
15%
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: NACUBO 2003 Tuition Discounting Study
Institutional Debt Levels
• In 2003, higher education issued 8
percent of the $2 trillion tax exempt
bond market.
• In the last four years, record
borrowing due to: stock market drop;
low interest rates; increased student
demand; research facilities.
Rising Share of Bond Market
1991-2003
% S hare
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
91
92
93
94
95
96
97
98
99
OO
O1
O2
O3
• In 2004, the
median debt per
university was
estimated at
approximately
$70 million.
$70
$60
$50
$40
$30
$20
$10
$0
1998
2000
2002
2004
est
Median Debt Per University
($million)
Research and Development
• Universities and colleges reported increased
R&D expenditures in FY02 compared to the
prior six years.
• In FY02, total U.S. academic R&D
expenditures were $36.3 billion, an increase of
close to 11 percent over the FY01 figure of
$32.8 billion.
• Federal funding supported 60 percent of the
R&D expenditures, fueling the growth seen in
FY02.
Source: National Science Foundation’s Survey of Research and Development Expenditures at Universities and Colleges.
(www.nsf.gov)
R&D at Postsecondary Institutions
Source: National Science Foundation’s Survey of Research and Development Expenditures at Universities and Colleges.
Federal Obligations for R&D at Health
and Human Services (HHS)
• HHS has experienced the largest
average annual percentage change
between FYs 1990-2002 in federal
obligations for R&D compared to any
other federal agency; 9.1 percent in
current dollars and 6.8 percent in
constant 1996 dollars.
Federal Research Obligations by Agency
Average Annual Percentage Change
Federal Obligations for R&D by Federal Agency: Average
Annual Percentage Change FYs 1990-2002
USDA
NSF
DOE
NASA
HHS
DoD
Total
-4%
-2%
0%
2%
4%
6%
Avg. Annual % Change FYs 1990-2002 ( in millions of constant 1996 dollars)
Avg. Annual % Change FYs 1990-2002 ( in millions of current dollars)
Source: National Science Foundation. Survey of Federal Funds for Research and Development.
8%
10%
NIH R&D Funding Trends
• In 2003, Congress appropriated $27
billion to NIH’s research budget, two
times their 1998 budget; a 15
percent increase from 1998 to 2003.
• However, appropriations bill for 2005
provides the NIH with $28.6-billion,
an increase of about 2 percent;
smallest in 20 years.
Federal Dollars for Research to NIH
Federal Spending on Academic Research Awarded
to the National Institutes of Health
$35
$30
In Billions
$25
$20
$15
$10
$5
$0
1995
1996
1997
1998
1999
2000
Fiscal Years
Source: Chronicle of Higher Education, Outlook 2005.
2001
2002
2003
2004
2005
Charitable Giving Trends
• FY03 showed a stabilization in giving
from FY02—FY02 giving year was the
first decline to higher education since
1998.
• An estimated $29.3 billion in FY03 was
reported in giving to higher education;
out of the $31.6 billion given to all
education institutions.
Source: Council for Aid to Education. (www.cae.org)
Charitable Giving to Education
$35
$30
$25
$20
$15
$10
$5
$0
19
63
19
68
19
73
19
78
19
83
19
88
19
93
19
98
20
03
$ in billions
Giving to Educational Institutions
1963-2003
Current $
Inflation-Adjusted $
Source: The Center on Philanthropy at Indiana University (www.philanthropy.iupui.edu)
Charitable Giving to Education
• Charitable giving has tripled in the
last four decades
• Forecasts call for a massive
intergenerational transfer of wealth
over the next five decades—from
$41 to $136 trillion.
Capital Campaigns 2004
• University of Virginia $3 billion
• Duke University $2 billion
• Washington and Lee University $242
million
• Juniata College $92 million
Title IV: Federal Grants and Loans
• Over the past decade, grant aid has
increased by 84 percent in real dollars,
while education loan volume has
increased by 137 percent.
• In 2003-04, about one-half of the
undergraduate aid was in the form of
loans, whereas three-quarters of graduate
student aid was loans.
Source: College Board. Trends in Student Aid 2004. (www.collegeboard.com)
Grants and Loans
Grant Aid and Loan Aid in Constant 2003 Dollars,
1993-94 to 2003-04
$80,000
$70,000
In Millions
$60,000
$50,000
$40,000
Grant Aid
Loans
$30,000
$20,000
$10,000
$1993- 1994- 1995- 1996- 1997- 1998- 1999- 2000- 2001- 2002- 200394
95
96
97
98
99
00
01
02
03
04
Source: College Board. Trends in Student Aid 2004.
Grant and Loan Aid Per FTE
• Grants per
FTE rose
64 percent
in real
dollars, and
loans per
student
rose 111
percent in
constant
dollars.
Average Aid per Full-Time Equivalent Student,
1993-04 to 2003-04
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
Source: College
Board. Trends in
Student Aid 2004.
$1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
Average Grant Aid Per FTE
1999-00
2000-01
Average Loan Aid Per FTE
2001-02
2002-03
2003-04
Innovative Practices in Tuition Pricing
• Raised in-state tuition to equal outof-state tuition—Miami University in
Ohio
• Reduced tuition overall:
– Muskingum College
– Albertson College
– Wells College
Foreign Students
 In 2004, the number of foreign students
attending U.S. institutions declined by 2.4
percent, the first drop in enrollments since
1971-72.
 Why?: Difficulties in receiving student
visas, particularly in the fields of science
and technology
Source: Institute for International Education (IIE). (www.iie.org)
Resources
Western Interstate Commission for Higher
Education (WICHE)
• 15 Member states
• Mission: to expand educational access and
excellence for all citizens of the West
• Concerns:
– Pell Grant value
– Transfer and articulation between and within
the western states
– Growing enrollment now but anticipating
reduction in 20 years
www.wiche.edu
Resources
State Higher Education Executive Officers
(SHEEO)
• SHEEO members are chief executive officers serving 26
statewide governing boards and 30 statewide coordinating
boards of higher education.
• SHEEO’s focus is to assist members and the states in
developing and sustaining excellent systems of higher
education.
Recent Projects:
– IPEDS Student Unit Record Feasibility Study
– National Commission on Accountability in Higher
Education
– State Higher Education Finance (SHEF) report
www.sheeo.org
Successful Practices
Sustainability
Demonstrating environmental leadership:
•Tulane University-Greening the Campus
(http://www.tulane.edu/~greenclb/thesis/)
•The State University of New York at Buffalo
(http://wings.buffalo.edu/ubgreen/)
•University of Colorado at Boulder
(http://www.colorado.edu/cuenvironmentalcenter/)
•Associated Colleges of the South (ACS)
(http://www.colleges.org/~enviro/)
Successful Practices
Information Technology
Drexel University
–Supplies IT services to MCP Hahnemann University,
Cabrini College and Neumann College
Appalachian Colleges Association (ACA)
–35 institutions in 5 states
–Collaborate on common web site, student technology
assistant program, central library, course sharing, and
more
Committee on Institutional Cooperation (CIC)
–Library and University Press Collaborations
–Inter-institutional sharing of online resources
–Purchasing and Licensing coordination
–http://www.cic.uiuc.edu/index.shtml
Successful Practices
Mission Focused
Lakeland Community College
–Task Force for Managing the Future
–Center for Business and Industry
Clemson University
–Tuition and Fee increases
–Enrollment cap
–Maintain student mix
Successful Practices
Coalitions and Consortia
•EPA Sector Initiative
•“Self-Insurance” Program
--Oregon Independent College Employee Benefits Trust
--Florida’s Independent Colleges and Universities Benefits
Association
•University of Cincinnati’s Integrated
Planning
•Boston Consortium for Higher Education
(http://www.boston-consortium.org/)
Contact Information
www.nacubo.org
james.morley@nacubo.org