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					Strategies for Tough Times




                                                              WICHE Commission Meeting
                                                                        Boulder, Colorado
                                                                       November 2, 2009



    National Center for Higher Education Management Systems
    3035 Center Green Drive, Suite 150
    Boulder, Colorado 80301
                        The Reality of Higher Expectations


     “By 2020, America will once again have the highest proportion of
                      college graduates in the world”
                         - President Obama, 2/24/09



• State Level Goals
     – Double the numbers in Arizona, Colorado, & Kentucky
     – Global Competitiveness in Minnesota and Texas
     – 40-40-20 in Oregon




 slide 2
                   Percent of Adults with an Associate Degree or Higher by
                               Age Group - U.S. & Leading OECD Countries
                                                             Age 25-34                                   Age 35-44                                         Age 45-54                                        Age 55-64
60
     54.8




                              54.1




                                                          53.0
         50.8




50
                                     46.2




                                                                                      43.6
                43.2




                                                                                                          42.2




                                                                                                                                      41.9




                                                                                                                                                                  41.5




                                                                                                                                                                                              41.4




                                                                                                                                                                                                                                              40.9
                                                                                                                                                                                                                      40.8




                                                                                                                                                                                                                                               39.6
                                                                                          39.5
                                            39.3




                                                                                                                                                                                                                                                39.2
                                                                                           38.1




                                                                                                                                                                                                                                                 37.7
                       37.4




                                                                 37.5


40




                                                                                                                                                                                                                             36.2
                                                                                                                                             34.8




                                                                                                                                                                         34.6




                                                                                                                                                                                                                                33.2
                                                                                                                 32.8
                                                                                                  30.3




                                                                                                                                                                                30.0




                                                                                                                                                                                                                                       28.5
                                                                                                                                                                                                     26.9
                                                                                                                                                    26.8
30




                                                                                                                                                                                       24.9
                                                                                                                        24.0
                                                   22.9




                                                                                                                                                           22.5




                                                                                                                                                                                                            19.4
                                                                        19.2




                                                                                                                               16.9
20




                                                                                                                                                                                                               16.0
                                                                               10.6




10


 0
     Canada                      Japan                       Korea                     New                  Ireland                   Belgium                      Norway                       France                Denmark                  U.S.
                                                                                      Zealand




                                                                                                         Source: OECD, Education at a Glance 2008
          slide 3
                                                                                                          nsas
                                                                                                   Arka a
                                                                                                           d
Differences in College Attainment (Associate & Higher)




                                                                                                   Neva iana
         Between Younger & Older Adults—U.S., 2006




                                                                                                   Louis ma
                                                                                                          ho
                                                                                                   Okla ma
                                                                                                         a
                                                                                                   Alab s
                                                              Age 25-34
                                                              Age 45-54




                                                                                                   Texa irginia
                                                                                                         tV
                                                                                                   Wes
                                                                                                         ucky
                                                                                                   Kent ssee
                                                                                                           e
                                                                                                   T enn
                                                                                                         ka
                                                                                                   Alas sippi
                                                                                                         is
                                                                                                   Miss M exico
                                                                                                   New ing
                                                                                                         m
                                                                                                   Wyo
                                                                                                         o
                                                                                                   Idah a
                                                                                                           n
                                                                                                   Arizo         rolina
                                                                                                          h Ca

                                                                                                                           Source: U.S. Census Bureau, 2006 American Community Survey (ACS)
                                                                                                   Sout ia
                                                                                                           g
                                                                                                   Geor n
                                                                                                           o
                                                                                                   Or egna
                                                                                                   India
                                                                                                   Ohio nia
                                                                                                         or
                                                                                                   Calif a
                                                                                                         d
                                                                                                   Flor i ri
                                                                                                         ou
                                                                                                   Miss Carolina
                                                                                                   Nor th
                                                                                                           e
                                                                                                   Main
                                                                                                   Utah an
                                                                                                          ig
                                                                                                   Mich as
                                                                                                   Kans
                                                                                                          rado n
                                                                                                   Colo          o
                                                                                                         hingt
                                                                                                   Was ii
                                                                                                         a
                                                                                                   Haw onsin
                                                                                                   Wisc
                                                                                                          is
                                                                                                   Illino Dakota
                                                                                                          h
                                                                                                   Sout
                                                                                                         t ana
                                                                                                   Mon ska
                                                                                                           a
                                                                                                   Nebr
                                                                                                         nia
                                                                                                   Vir gi nt
                                                                                                            o
                                                                                                   Vermsylvania
                                                                                                   Penn            nd
                                                                                                            e Isla
                                                                                                   Rhod ar e
                                                                                                          w           re
                                                                                                   Dela Hampshi
                                                                                                   New
                                                                                                   Iowa cticut
                                                                                                            e
                                                                                                   Conn er sey
                                                                                                           J
                                                                                                   New
                                                                                                           land
                                                                                                   Mar y ork
                                                                                                           Y
                                                                                                   New esot a
                                                                                                   Minn Dakota
                                                                                                   Nor th chusett s
                                                                                                            a




                                                                                                                                                                     slide 4
                                                                                                   Mass
                                                                                                   DC



                                                         70



                                                                          60



                                                                               50



                                                                                    40



                                                                                         30



                                                                                              20
           Percent of Adults with an Associate Degree or
                    Higher by Age Group, WICHE States
60                             Age 25-34           Age 35-44                 Age 45-54                  Age 55-64




                                                        47.6
50




                                                         45.8
                                                           44.3




                                                                     44.2
                                                                     44.1
                                                                      42.9
                                    41.9
                 41.8




                                                                                                         41.4
                                                                        40.6
                                                 40.4
                                      39.1
                                       38.2




                                                                                                            37.9
                        37.8




                                                                                                             37.4
                                                                                             37.3
     37.0




                                                                                             36.8
40
                          35.7




                                                                                                              35.7
                                          35.1
                           34.8
       34.4




                                                                                                 33.2
                             32.3




                                                                                      31.8




                                                                                                                     31.4
          30.6




                                                                                                                      30.6
                                                                                                                         27.5
                                                                                                                         27.3
30


20


10


0
       Alaska            Arizona    California    Colorado              Hawaii               Idaho        Montana     Nevada
                                                                                                                     (continued)
                                                        Source: OECD, Education at a Glance 2007
       5
         Percent of Adults with an Associate Degree or
                  Higher by Age Group, WICHE States
                                                                                                                                                                        (continued)
60                                               Age 25-34                           Age 35-44                        Age 45-54                          Age 55-64
                                 49.5


50
                                        45.5




                                                                                                                                                         43.1


                                                                                                                                                                       42.7
                                                                                                                                                                41.9
                                               41.7




                                                                                                                                           41.6
                                                                                                 41.4
                                                                                          41.3




                                                                                                                             40.8
                                                                                                                                    40.9
                                                                                  40.5




                                                                                                                                                  40.4
                          39.4




                                                                    38.2




                                                                                                        37.9
                                                                           37.8
                   36.9




                                                      36.8




                                                                                                                      36.8
40




                                                                                                                                                                                     35.6
                                                             34.5




                                                                                                                                                                                            34.3
                                                                                                                                                                                                   34.3
                                                                                                               32.9
            31.5




                                                                                                                                                                              31.5
     31.0




30


20


10


0
     New Mexico                  North Dakota                       Oregon               South Dakota                         Utah                Washington                    Wyoming


                                                                                         Source: OECD, Education at a Glance 2007
     6
                                                                                                                                                                                                                                   165       Alaska
                                                                  Adjusting for Current Levels of Educational Attainment and Population Growth by State
Annual Increase in Degree Production Required to Meet the Goal
                      – 11.7 Million Additional Degrees by 2020




                                                                                                                                                                                                                                   270       Wyoming
                                                                                                                                                                                                                                             Vermont
                                                                                                                                                                                                                                409          Montana
                                                                                                                                                                                                                                430          North Dakota
                                                                                                                                                                                                                                             Delaware
                                                                                                                                                                                                                                437          South Dakota
                                                                                                                                                                                                                                             Maine
                                                                                                                                                                                                                                563          Hawaii
                                                                                                                                                                                                                                             DC
                                                                                                                                                                                                                                             New Hampshire
                                                                                                                                                                                                                            764              Idaho
                                                                                                                                                                                                                            803              New Mexico
                                                                                                                                                                                                                                             Rhode Island
                                                                                                                                                                                                                            879              Nevada
                                                                                                                                                                                                                                             Nebraska
                                                                                                                                                                                                                                             West Virginia
                                                                                                                                                                                                                                             Connecticut
                                                                                                                                                                                                                                             Arkansas
                                                                                                                                                                                                                                             Kansas
                                                                                                                                                                                                                                             Mississippi
                                                                                                                                                                                                                        1,740                Oregon
                                                                                                                                                                                                                                             South Carolina
                                                                                                                                                                                                                                             Louisiana
                                                                                                                                                                                                                                             Oklahoma
                                                                                                                                                                                                                                             Alabama
                                                                                                                                                                                                                                             Kentucky
                                                                                                                                                                                                                  2,262                      Utah
                                                                                                                                                                                                                                             Maryland
                                                                                                                                                                                                                                             Iowa
                                                                                                                                                                                                                 2,489                       Colorado
                                                                                                                                                                                                                                             Minnesota
                                                                                                                                                                                                                                             Wisconsin
                                                                                                                                                                                                                                             New Jersey
                                                                                                                                                                                                                                             Tennessee
                                                                                                                                                                                                               3,161                         Washington
                                                                                                                                                                                                                                             Massachusetts
                                                                                                                                                                                                                                             Missouri
                                                                                                                                                                                                                                             Virginia
                                                                                                                                                                                                                                             Georgia
                                                                                                                                                                                                                                             Indiana
                                                                                                                                                                                                                                             North Carolina
                                                                                                                                                                                                      5,023                                  Arizona
                                                                                                                                                                                                                                             Michigan
                                                                                                                                                                                                                                             Ohio
                                                                                                                                                                                                                                             Illinois
                                                                                                                                                                                                                                             Pennsylvania
                                                                                                                                                                                                                                             New York
                                                                                                                                                                                                                                             Florida
                                                                                                                                                                                                                                             Texas




                                                                                                                                                                                                                                                              slide 7
                                                              16,261                                                                                                                                                                         California
                                                            18,000


                                                                                                                                                          16,000


                                                                                                                                                                   14,000


                                                                                                                                                                            12,000


                                                                                                                                                                                     10,000


                                                                                                                                                                                              8,000


                                                                                                                                                                                                       6,000


                                                                                                                                                                                                                4,000


                                                                                                                                                                                                                           2,000


                                                                                                                                                                                                                                         -
                               0
                                   1
                                       2
                                           3
                                               4
                                                   5
                                                            6
                                                                     7
                                                                             8




slide 8
                   Nevada                                             6.73
                   Arizona                                         6.32
                  Arkansas
                Tennessee
                 Louisiana
                      Texas
            West Virginia
                 Kentucky
           North Carolina
               Mississippi
                   Georgia
                       Utah                                  5.88
                Oklahoma
                  Alabama
                    Florida
                   Indiana
           South Carolina
                     Idaho                                  5.63
                  Missouri
                    Nation                                5.44
                   Oregon                                 5.44
                 Delaware
                   Virginia
                       Ohio
                 California                               5.33
                    Alaska                                5.30
                 Michigan
                  Colorado                             5.25
             New Mexico                                5.20
              Washington                               5.19
                    Hawaii                             5.17
                    Illinois
                    Kansas
                       Iowa
                Wisconsin
             Pennsylvania
                 Nebraska
                 Maryland
            South Dakota                             5.00
             Rhode Island
                 Wyoming                             4.98
                 Montana                             4.97
               New Jersey
               Minnesota
                 New York
          New Hampshire
           Massachusetts
              Connecticut
                    Maine
            North Dakota                           4.60
                  Vermont
                                                                                                                                                                         Percent Annual Increase in Degree Production Required to Meet
                                                                                                                                                                                     the Goal – 11.7 Million Additional Degrees by 2020
                                                                                 Adjusting for Current Levels of Educational Attainment and Population Growth by State
                               -
                                                                                       1,000,000
                                                                                                   1,200,000
                                                                                                               1,400,000
                                                                                                                                    1,600,000
                                                                                                                                                1,800,000
                                                                                                                                                                  2,000,000




                                         200,000
                                                      400,000
                                                                   600,000
                                                                             800,000




slide 9
                California
                New York
                     Texas
                    Florida
                    Illinois
            Pennsylvania
           North Carolina
                                                                                                                                                            2,123,105




                 Michigan
               New Jersey
                       Ohio
                   Virginia
           Massachusetts
                  Georgia
                Wisconsin
                Maryland
               Minnesota
              Washington                                        409,568
           South Carolina
              Connecticut
                 Colorado                                   394,419
                  Missouri
               Tennessee
                   Indiana
                Louisiana
                 Alabama
                   Oregon                           242,495
                   Arizona                         209,922
               Mississippi
                Oklahoma
                    Kansas
                Nebraska
                       Iowa
                                                                                                                  US = 21,578,765




                 Kentucky
                    Hawaii                137,776
                   Nevada                119,687
                 Arkansas
                    Maine
                     Idaho          71,662
             New Mexico             66,602
                 Montana            62,604
                Delaware
            South Dakota            60,864
             Rhode Island
                       Utah        56,303
                    Alaska         54,606
                Wyoming            41,049
          New Hampshire
            West Virginia
                 Vermont
            North Dakota           617
                                                                                                                                                                                          Gaps Between Whites & Minorities, 2005-07
                                                                                                                                                                              Additional Degree-Holders Needed to Close Racial/Ethnic
   Even Best Performance with Traditional College-Age Students at
Each Stage of the Educational Pipeline Will Leave Gaps in More than
                                                          30 States
         Texas                                                                                                    1,333,645
       Florida                                                                                                      893,504
    California                                                                                        560,688
  New Jersey
   Tennessee
      Nevada                                                      287,565
    Louisiana
     Arkansas
     Kentucky
North Carolina
       Arizona                            122,061
   Mississippi
          Ohio
South Carolina
     Alabama
 West Virginia
        Alaska                   65,853
    Oklahoma                                           In order to reach international competitiveness by 2025, the
       Oregon                 53,995
                                                          U.S. and 32 states cannot close the gap with even best
     Michigan
  New Mexico                 47,420                   performance with traditional college students. They must rely
    Wisconsin
         Maine                                          on the re-entry pipeline—getting older adults back into the
         Idaho             37,706                      education system and on track to attaining college degrees.
      Montana             34,547
        Hawaii           28,659
      Georgia
     Wyoming            24,741
     Maryland
  Connecticut
      Missouri
       Indiana       2,788

                 0               100,000            200,000     300,000      400,000      500,000       600,000
  10
        Even Best Performance with Traditional College-Age Students at
     Each Stage of the Educational Pipeline Will Leave Gaps in More than
                                                               30 States
         Texas                                                                                                     1,333,645
       Florida                                                                                                       893,504
    California                                                                                          560,688
  New Jersey
   Tennessee
      Nevada                                                       287,565
    Louisiana
     Arkansas
     Kentucky
North Carolina
       Arizona                            122,061
   Mississippi
          Ohio
South Carolina
     Alabama
 West Virginia
        Alaska                   65,853                   In order to reach international competitiveness by 2025, the
    Oklahoma
       Oregon                 53,995                         U.S. and 32 states cannot close the gap with even best
     Michigan                                            performance with traditional college students. They must rely
  New Mexico                 47,420
    Wisconsin                                              on the re-entry pipeline—getting older adults back into the
         Maine                                            education system and on track to attaining college degrees.
         Idaho             37,706
      Montana             34,547
        Hawaii           28,659
      Georgia
     Wyoming            24,741
     Maryland
  Connecticut
      Missouri
       Indiana       2,788

                 0               100,000            200,000      300,000      400,000       500,000      600,000
      11
FINANCIAL ENVIRONMENT


12
                                    The Flow of Funds - State

                                                                    Federal
     Economy                   Available                          Government
                            State and Local
                              Govt. Funds

                                                                      •   K-12
                                                                      •   Corrections
                                   Higher                             •   Health Care
                                  Education                           •   Other Govt.


                  Student Aid                 Appropriations/Grants


                                   Tuition
               Students                            Institutions
                                Scholarships &
                                   Waivers




13
        Many state governments
     have serious financial problems.

     And they’re not going to recover quickly.




14
                                                                                                                                               Expenditures


                                                                                Annual % Budget Increase, Fiscal 1979
                                                                 Annual Percentage Budget Increases, Fiscal 1979 to Fiscal 2010

                              20                                              to Fiscal 2009

                              15
Percentage Budget Increase




                              10




                               5




                               0




                              -5
                                   1979    1981       1983      1985       1987          1989   1991   1993     1995   1997   1999   2001    2003      2005      2007      2009
                                                                                                         Fiscal Year


                             *32-year historical average rate of growth is 5.9 percent                                                               **Fiscal 09 numbers are estimated
                             ***Fiscal 10 numbers are recommended                                                                      Source: NASBO June 2009 Fiscal Survey of States




                                slide 15
      FY 2010 Highest Budget Gaps
                as a Percentage of General Fund Budget




     Source: NCSL survey of state legislative fiscal offices, April, June, and July 2009.

16
           Projected Budget Gaps
                                      FY 2008 to FY 2012




     Source: NCSL survey of state legislative fiscal offices, various years.
                                                      *Includes Puerto Rico
17
                                                                                             -8
                                                                                                            -6
                                                                                                                          -4
                                                                                                                                          -2
                                                                                                                                               0




                                                                  -12
                                                                               -10
                                                                                                                                   -2.1        Maryland




slide 18
                                                                                                                                  -2.2         Maine
                                                                                                                                 -2.3          Vermont
                                                                                                                                 -2.3          New Jersey
                                                                                                                                -2.4           Connecticut
                                                                                                                               -2.6            New Hampshire
                                                                                                                              -2.7             Rhode Island
                                                                                                                             -2.9              North Dakota
                                                                                                                              -3               Wisconsin
                                                                                                                          -3.3                 Massachusetts
                                                                                                                         -3.5                  Michigan
                                                                                                                         -3.5                  Wyoming
                                                                                                                       -3.8                    California




           Source:
                                                                                                                     -4.1                      Ohio
                                                                                                                  -4.6                         Delaware
                                                                                                                 -4.7                          Kansas
                                                                                                                -4.8                           Oregon




           NCHEMS;
                                                                                                               -4.9                            Virginia
                                                                                                                 -5                            New York
                                                                                                              -5.1                             Minnesota
                                                                                                             -5.2                              West Virginia
                                                                                                            -5.4                               Pennsylvania
                                                                                                          -5.7                                 Illinois
                                                                                                          -5.7                                 Alaska
                                                                                                         -5.8                                  Nebraska
                                                                                                         -5.8                                  Montana
                                                                                                          -6                                   United States
                                                                                                      -6.2                                     Louisiana
                                                                                                     -6.3                                      Indiana
                                                                                                     -6.3                                      Hawaii
                                                                                                  -6.7                                         Oklahoma
                                                                                                  -6.7                                         New Mexico
                                                                                                 -6.8                                          Missouri
                                                                                              -7.2                                             Kentucky
                                                                                             -7.4                                              Iowa
                                                                                          -7.8                                                 South Dakota
                                                                                           -8                                                  Washington
                                                                                        -8.1                                                   Florida
           Don Boyd (Rockefeller Institute of Government), 2009                         -8.1                                                   South Carolina
                                                                                     -8.5                                                      Arkansas
                                                                                     -8.5                                                      Georgia
                                                                                     -8.5                                                      Colorado
                                                                                    -8.7                                                       Tennessee
                                                                                  -8.9                                                         North Carolina
                                                                                 -9.1                                                          Idaho
                                                                               -9.4                                                            Utah
                                                                              -9.5                                                             Arizona
                                                                             -9.7                                                              Nevada
                                                                     -10.6                                                                     Alabama
                                                                    -10.8                                                                      Texas
                                                                   -10.9                                                                       Mississippi
                                                                                                                                                                                       Percent of Revenues, 2016
                                                                                                                                                                Projected State & Local Budget Surplus (Gap) as a
For most states – and for most public institutions –
     the stimulus package is not an answer


• But it will slow the impact

• And it can buy enough time to adjust to substantially
  changed circumstances




 slide 19
After stimulus wanes, gaps could approximate 4% of spending,
             or $70 billion, even under the “Low-Gap” Scenario




                                  Source: Don Boyd (Rockefeller Institute of Government), 2009
slide 20
After stimulus wanes, gaps could approach 7% of spending
              or $120 billion under the “High-Gap” scenario




                                 Source: Don Boyd (Rockefeller Institute of Government), 2009
 slide 21
Recognize that the big population growth will be
 in students of color. In the main these will be
         individuals of modest means.


Therefore there are real limits as to how high tuition can
  go before price affects participation and completion.




 slide 22
Change in Population Age 25-44 By Race/Ethnicity,
            …2,689,700
             …1,044,516
                                     2005-2025




                            Source: U.S. Census Bureau
 slide 23
                                                                                                                    aii
                                                                                                   1.4       Haw Virgin ia
                                                                                                                   t
                                                                                                             Wes e
                                                                                                             Ma in oma
Difference Between Whites and Next Largest Race/Ethnic
        Group in Percentage of Adults Age 25-34 with an
                       Associate Degree or Higher, 2000




                                                                                                                    h
                                                                                                             Okla ont
                                                                                                             Verm cky
                                                                                                                    u
                                                                                                             Kent esse e
                                                                                                             Te nn a
                                                                                                                   d
                                                                                                             Flo ri n sas
                                                                                                             Arka na
                                                                                                             Ind ia ma
                                                                                                                   a
                                                                                                             Alab
                                                                                                             Ohio u ri
                                                                                                                   o
                                                                                                             Miss gia
                                                                                                             Geo r iana
                                                                                                             Lo uis issip
                                                                                                                         pi
                                                                                                             Miss Caro lin a e
                                                                                                                             ir
                                                                                                                                  Source: U.S. Census Bureau, PUMS (based on 2000 Census)
                                                                                                             Nort hHampsh
                                                                                                             New Carolina
                                                                                                                    h
                                                                                                             Sout ig an
                                                                                                             Mich d St ates
                                                                                     19.3                    Unite are
                                                                                                                    w
                                                                                                             Delaming
                                                                                    19.8                     Wyo land
                                                                                                             Ma ry sylva nia
                                                                                                             Pennana
                                                                                                                   t
                                                                                  21.8                       Mo n d a
                                                                                 22.4                        Neva ian
                                                                                                             Virgi
                                                                                                                   o
                                                                            24.3                             Ida h Me xico
                                                                            24.5                             New esota
                                                                                                             Minn on
                                                                            24.7                             Ore gonsin
                                                                                                             Wisc
                                                                                                             Iowais
                                                                                                             Illino
                                                                          25.5                               Utah  ka
                                                                         26.1                                Alas a
                                                                                                                     n
                                                                       27.3                                  Arizo ing ton
                                                                                                                   h
                                                                       27.5                                  Was Dakota
                                                                      28.1                                   Nort h  s
                                                                                                             Te xa e Islan d
                                                                                                             Rhodas
                                                                                                             KansJersey s
                                                                                                             New achuse tt
                                                                                                             Ma ssYork
                                                                                                             New Dakota
                                                                                                                    h
                                                               32.7                                          Sout aska
                                                                                                             Nebr ecticut
                                                                                                             Conn   ornia
                                                            34.7                                             Calif ado
                                                                                                                    r
                                                           35.8                                              Colo




                                                                                                                                                                                            24
                                                          40



                                                                       30



                                                                                         20



                                                                                              10



                                                                                                         0
Percentage of Children in the Lowest and Highest
  U.S. Family Income Quartiles by Race/Ethnicity
                                                                             (2006)
                       Low Income Quartile        High Income Quartile
       State         White and    Other Race/    White and    Other Race/
                      Asians       Ethnicities    Asians       Ethnicities
           Alaska      10.2          26.1          15.3           9.2
          Arizona      12.4          34.8          15.8          3.9
        California     11.8          30.1          26.5          7.1
         Colorado      12.1          33.5          19.5           4.1
           Hawaii      16.4          15.8          19.4          16.0
            Idaho      18.0          35.5           7.7           1.2
         Montana       19.5          38.8           5.2          2.7
          Nevada       11.7          28.6          16.1          4.1
      New Mexico       15.7          39.5          13.7          3.0
     North Dakota      16.0          35.3           7.3          1.3
          Oregon       17.0          38.4          11.8          4.0
     South Dakota      11.8          44.2           9.6          2.3
             Utah      11.1          31.8          12.4          3.7
      Washington       14.3          36.3          15.1          5.6
        Wyoming        18.3          26.6          11.4          6.6
     United States     14.8          37.4          17.0          5.1


25
            The Imperative to Reduce Costs and Increase
                                            Productivity

• Funding strategy to support attainment goals has to
  include attention to cost control and productivity
  increases - by states, within systems, and in institutions
• Both are possible – but both require new habits and
  attention to spending, and improving accountability for
  spending and performance
• Beginning with better language about costs-and where
  to focus policy attention




 slide 26
  Clarifying language as it relates to costs and
                                     productivity

– Costs = spending, not prices

– Focus on E&R, not total spending

– Measure cost per student and cost per
  degree/completion

– Look at patterns over time
Peeling the onion: getting at core functions inside
                                           budgets
  Snapshot of total spending by functional area, 2006, public research universities in
                                                                       WICHE region
Spending within E&R only – 2006, WICHE public
                                     research
And within E&R, the subsidy versus tuition share
                                         of costs
     Approaches to Reducing Costs and
       Achieving Greater Productivity




31
   Cost reductions + productivity = cost effective



                         Productivity improvements =
 Cost reductions =
                          Increase in output (learning,
 Permanent structural            research, jobs),
reductions in spending
                         without changing admissions or
                                    spending
                           Examples of cost reductions

• Reduce high cost/low demand programs
• Address retirement eligibility
• Reduce growth in health care
• Consolidate administrative functions
• Reduce subsidies to “self-supporting” auxiliaries
  (athletics, others)
• Restructure debt
• Restructure faculty compensation and rewards (use
  turnover to substitute teaching faculty for research
  faculty)
             Examples of productivity improvements

• Increase in student retention and graduation
• Reduce excess credits accumulated to the degree
• Increase credit-by-exam
• Increase distance-based learning programs
• Increase proportion of graduates who meet goals for
  critical learning
• Increase proportion of students who remain – and are
  employed – in state
                           Building Cost-Effective Systems

•     More appropriate mix of institutions
•     Create new types of providers
•     Effective collaboration among institutions
•     More efficient use of existing resources




    slide 35
                       Building cost-effective institutions

•     Reduce administrative costs
•     Tackle ‘automatic’ cost increases
•     Reengineer curricula
•     Reengineer course delivery
•     Eliminate or consolidate high cost/low demand programs




    slide 36
               System and institution: Increase learning
                                            productivity

•     Students come to college fully prepared (no remediation)
•     Accelerated learning
•     Minimize “rework” and reduce credits to degree
•     Improve rates of course completion
•     Encourage use of assessment/”test out” options
•     Learning in the workplace/credit for experience




    slide 37
                  State-System Level Short-Term Actions

• Be clear about goals & accountability measures
     – Degree production
     – Reduced cost/degree
• Create a Coherent Financing Plan
     – Align policies regarding appropriations to institutions, tuition, &
       student aid policies
     – Treat different sectors differentially
     – “Reset” base funding levels
• Invest more (reduce less) state appropriations in
  institutions that must contribute most to student access
  and success


 slide 38
                                       Short-Term Actions
                                                   (continued)

• Protect need-based financial aid
• Incorporate spending accountability into public reporting
  systems
• Set goals for cost reductions and productivity increases
• Have a plan for use of savings
            • Invest in reform
            • Return to General Fund




 slide 39
                                Long-Term State/System-level Actions
•     Refocus institutional missions
        –      Directly
        –      Through de-funding certain programs/functions
•     Require certain programs to be self-supporting (e.g., MBA)
•     Align state & federal student aid programs – leave no federal money on the table
•     Administer need-based aid as a state – not institutional – program
•     Tackle developmental education on a statewide basis
        –      Consider a separate delivery entity
•     Undertake a policy audit with an eye toward eliminating unnecessary bureaucracy
•     Adopt a strategy for investing in productivity enhancement
        –      Course redesign on a system-wide basis
        –      Retrofitting buildings for energy efficiency
        –      Reengineered business processes
        –      Inter-institutional collaboration




    slide 40

				
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