Higher Education Trends and Overview for the 2018 Sessionsfc.virginia.gov/pdf/retreat/2017 Charlottesville/111717_No8_HE.pdfHigher Education Trends and Overview for the 2018 Session

SENATE FINANCE COMMITTEE

Higher Education Trends and

Overview for the 2018 Session

November 17, 2017

SENATE FINANCE COMMITTEE 2

Virginia Higher Education Overview and Trends

Overview of the Cost of Education

Next Steps - 2018 Session

Topics:


Virginia Higher Education Overview

Goal: Best-Educated State by 2030

3


Attainment Impacts Income

4

Prepared by the Council on Virginia’s Future, 2017.

EDUCATIONAL ATTAINMENT AND PERSONAL INCOME, BY VIRGINIA REGION, 2010-2014

11.1% to 15%

15.1% to 20%

20.1% to 25%

25.1% to 30%

30.1% to 35%

35% or higher

Percentage of Population with a Bachelor’s Degree or Better

Southwest $32,561 Southside

$32,160

Central $48,044

West Central $37,808

Valley $38,056

Northern $65,296

Hampton Roads $44,790

Eastern $40,781


Type of Degree or Training Matters

Prepared by the Council on Virginia’s Future, 2017.

43%

39%

18% Low

Middle

High

SOURCE: National Skills Coalition, Middle-Skill Jobs State by State, Virginia’s Forgotten Middle, http://www.nationalskillscoalition.org/resources/publications/2017-middle-skills-fact-sheets/file/Virginia-MiddleSkills.pdf

35%

45%

20% Low

Middle

High

WORKFORCE SKILL LEVELS vs. PROJECTED WORKPLACE SKILL DEMANDS

2015 Skills in Virginia’s Workforce

2024 Projected Demand for Skill Levels in Virginia’s Workplace


0%

10%

20%

30%

40%

50%

60%

70%

80%

Korea Canada Japan UK France US Massachusetts Maryland

Ages 25 to 34 Ages 25 to 64

Educational Attainment (Bachelor’s and Above) of Virginia and Key Competitors, 2015

6

Younger Cohort Falling Behind Global Competition: Where We Are Now

SOURCE: Country Data - Organisation for Economic Co-operation and Development, Education at a Glance, 2016/ State Data – SCHEV staff analysis of US Census and Lumina foundation data NOTE: State data represents 2014 while country data shows 2015 data.

Virginia

Prepared by the Council on Virginia’s Future, 2017


Number of High School Graduates is Relatively Flat

75,185 77,039 78,806 80,047 80,586 81,314 80,763 80,027

2008 2009 2010 2011 2012 2013 2014 2015Source: SCHEV staff; May, 2017.


Shifting High School Graduate Demographics

Source: SCHEV and SFC staff analysis of WICHE, Knocking at the College Door http://knocking.wiche.edu/; May 2017.

11%

59%

23%

7% 18%

52%

20%

10%

Hispanic

White

Black

Asian/Pacific Islander

2016 2030

http://knocking.wiche.edu/


Best-Educated State Rankings Lumina

Associates or certificate or Higher (ages 25-64)

Census Associates Degree or Better

(ages 25-64)

Census Associates Degree or Better

(ages 25-34)

Virginia 6 8 11 Massachusetts 1 1 1 Colorado 2 4 12 Connecticut 3 3 10 Minnesota 4 2 2 Washington 5 11 17 New Jersey 7 6 4 Maryland 8 7 7 Illinois 9 14 6 Kansas 10 18 19

Source: SCHEV staff analysis of US Census data and Lumina Foundation, 2016.

9


Virginia’s Higher Education Landscape

15 PUBLIC UNIVERSITIES

24 PUBLIC 2-YEARS (23 COMMUNITY COLLEGES, 1 TRANSFER COLLEGE)

5 HIGHER EDUCATION CENTERS

1 PUBLIC/PRIVATE MEDICAL SCHOOL

30 VIRGINIA PRIVATE NONPROFIT COLLEGES & UNIVERSITIES

300+ FOR-PROFIT, OUT-OF-STATE OR VOCATIONAL SCHOOLS

Source: SCHEV staff; May, 2017.


Virginia’s Institutions

118,838 DEGREES & CERTIFICATES AWARDED 2017

520,893 ENROLLMENTS IN 2016-17

$8 IN PUBLIC HIGHER EDUCATION EXPENDITURES

2nd PUBLIC 4-YEAR GRADUATION RATE IN

THE NATION

$45,000 AVERAGE WAGE 5 YEARS OUT

$26,758 billion MEAN DEBT OF DEGREE GRADUATES

Source: SCHEV staff; November, 2017.


The Subcommittee will conduct a focused review of access, affordability, quality, and autonomy issues related to Virginia's public higher education system. As part of that review, the Subcommittee will explore ways to:

(a) improve the quality of higher education;

(b) review the autonomy and flexibility granted to Virginia's public higher education institutions, including the history of restructuring and the expansion of autonomy;

(c) examine access and affordability in higher education, including the cost of education and need-based financial aid programs;

(d) review the impact of financial, demographic, and competitive changes on the sustainability of Virginia's public higher education system; and

(e) identify any practices that would result in more efficient outcomes regarding cost and completion, including dual enrollment and online programs.

Joint Subcommittee on the Future Competitiveness of Virginia Higher Education


Affordability and Outcome Trends

13


Higher Education General Fund Appropriations – Final FY 2007 – FY 2018

Note: These amounts do not include GF student financial aid amounts. FY 2018 includes the amounts for the planned faculty salary increase.

Source: SFC staff analysis; May 2017.

$1,631.6 $1,695.9 $1,624.3

$1,447.0 $1,426.5 $1,337.4

$1,421.8 $1,470.4 $1,500.2

$1,540.8 $1,676.1 $1,664.2

$-

$200.0

$400.0

$600.0

$800.0

$1,000.0

$1,200.0

$1,400.0

$1,600.0

$1,800.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Gen

eral

Fun

d Ap

prop

riatio

n

(in m

illio

ns)

Final Fiscal Year


Increases Fluctuate for Tuition and Educational and General (E&G) Fees - In-State Undergraduate Students

Source: SCHEV 2017-18 Tuition and Fees at Virginia’s State-Supported Colleges and Universities; August, 2017.

0.0% 0.0%

21.5%

19.3%

10.5%

8.2%

9.9%

6.3% 6.5%

5.1%

13.1%

9.7%

4.5% 5.1% 6.7%

7.1%

4.6%

5.4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018


2017-18 In-State Undergraduate Tuition and Mandatory E&G Fee Increases

• In-state undergraduate tuition and mandatory E&G fee increases range from 2.2% to 9.7% by Virginia’s public higher education institutions for 2017-2018.

• This is a component of the total cost of education.

Source: SCHEV 2017-18 Tuition and Fees Report, August 2017.

Institution 2016-17 2017-18 Amount PercentCNU $7,870 $8,270 $400 5.1%

CWM freshman $15,810 $16,506 $696 4.4%

CWM other ISUG $12,414 $14,163 $0 0.0%

GMU $8,204 $8,672 $468 5.7%

JMU $5,896 $6,250 $354 6.0%

LU $7,350 $7,620 $270 3.7%

NSU $5,318 $5,478 $160 3.0%

ODU $6,348 $6,648 $300 4.7%

RU $7,045 $7,461 $416 5.9%

UMW $7,948 $8,306 $358 4.5%

UVA freshman $13,515 $13,810 $295 2.2%

UVA other ISUG1 $11,848 $12,788 $261 2.2%

UVAW $5,369 $5,529 $160 3.0%

VCU $10,989 $11,483 $494 4.5%

VMI $8,461 $8,884 $423 5.0%

VSU $5,386 $5,547 $161 3.0%

VT $10,941 $11,263 $322 2.9%

RBC $5,280 $5,790 $510 9.7%

VCCS $4,373 $4,493 $120 2.7%

Average2 $7,783 $8,205 $422 5.4%

Tuition and E&G Fees Increase

Notes: (1) This is an average tuition that blends rates between student cohorts. UVA students will see a 2.2% increase in FY2018. (2) Increases for tuition and mandatory E&G fees and total are weighted to account for variable tuition charges at CWM and UVA. (3) CWM students under the “Promise” do not receive an additional increase; prices are based on a four-year rate.


In-State Undergraduate Tuition and Mandatory E&G Fees Continue to Increase


$3,956 $4,156 $3,627

$5,224

$6,956 $8,614

$2,278 $2,716 $2,668

$4,468

$6,501

$8,614

$-

$2,000

$4,000

$6,000

$8,000

$10,000

1992-93 1997-98 2002-03 2007-08 2012-13 2017-18

Average Full-Time In-State Undergraduate Tuition and Mandatory E&G Fees

(Four-Year Institutions)

2018 Constant Dollars(Adjusted forInflation)

Actual Dollars


Ranking State Tuition and Fees

1 New Hampshire $15,650

2 Vermont $15,450

3 Pennsylvania $13,880

4 New Jersey $13,560

5 Illinois $13,280

6 Michigan $12,460

7 Virginia $12,320 9 South Carolina $12,190

19 Kentucky $9,950

42 North Carolina $7,200

In-State Undergraduate Tuition and Fees

Source: The College Board, Annual Survey of Colleges, Average 2016-17 In-State Tuition and Fees at Public Four-Year Institutions by State, October 2016.


Indicators of Affordability Average Funding per FTE Student at Four-Year Institutions for E&G programs

(in 2016-17 constant dollars)

Source: SCHEV data, Cohort 2009-10; November 2016.


Indicators of Affordability Average Funding per FTE Student at VCCS for E&G programs

(in 2016-17 constant dollars)

Source: SCHEV data, Cohort 2009-10; November 2016.


Affordability: In-State Undergraduate Students Pay More than the Current State Goal of 33 Percent

Note: Calculations based on the average appropriated cost of education. *The tuition policy required out-of-state students to pay 100% of cost, but had no cost-share requirement for in-state undergraduate students. **The goal of the tuition policy was for in-state undergraduate students to pay 25% of the cost. ***The goal of the tuition policy is for students to pay 33% of the cost.


62% 77%

47%

38% 23%

53%

0%

25%

50%

75%

100%

1993-94* 2001-02** 2017-18***State Share In-State Undergraduate Student Share

Cost Share Relationship between the State and In-State Undergraduate Students


Need Met for Virginia In-State Students has Declined Since FY 2008

Source: SCHEV Data; May 2017.


Virginia Student Debt Continues to Increase

Note: The four-year bachelor’s degree mean and median debt levels reported on the SCHEV research site may differ from that reported by individual institutions. Many institutions report indebtedness based on the Common Data Set definition, which limits the indebtedness level reported to include only those students who entered the institution as first-time in college (FTIC) students. See the SCHEV website for additional notes.

Source: SCHEV Research Data; May 2017.


Overview of the Cost of Education

24


Components of Higher Education Cost

(Variables: institutional efficiencies, state general support, financial aid)

Access (Variables: location, instruction flexibility-online, day/evening, academic requirements, institutional capacity, affordability)

Quality (Variables: academic rigor, completion rates,

skill attainment, employment) Source: The Iron Triangle, A report from the National Center for Public Policy and Higher Education and Public Agenda.


• Definitions:

• Cost per student: Total appropriations divided by total students.

• Cost of attendance: Includes tuition and fees, room and board, books and supplies, transportation, and personal expenses.

• Net Price: Sticker price minus gift aid (federal, state, institutions, and other - including grants, scholarships, any aid that doesn’t need to be repaid).

• Affordability: Believed to be within one’s financial means. Applies to students, state and federal governments, and institutions.

• Value: Relative worth, merit, or importance. Can be individual and public.

• State policymakers will have to decide on a definition of affordability to

achieve desired goals based on a mixture of appropriate policies – this will include the weighing of public good versus that of individuals.

Cost versus Price - and Affordability versus Value

Source: Peter Blake, Director of SCHEV, Senate Finance Committee Presentation, October 2012.


Cost to: Definition

Students (total cost of attendance)

What a student pays to attend a higher education institution in Virginia. Total cost of attendance includes tuition, fees, room and board, books and supplies, and other expenses.

Institutions (cost per student)

What an institution spends to educate its student population. Cost to an institution includes instruction, student financial aid, student support services, and operations and maintenance of campus buildings. Institutions also spend resources on running auxiliary enterprises (bookstores, athletic programs) and sponsored programs (supported at least in part by external funds, i.e. federal grants, etc.), but these costs have dedicated streams of revenue.

Commonwealth of Virginia (funding )

What the Commonwealth spends to support the education of in-state students at Virginia’s public institutions of higher education, student financial aid, and research.

Defining Cost


Costs to Attend College

Tuition and Educational Fees (E&G) $8,177

Non-educational fees (non E&G) $3,960

Room and Board $9,989

Books and Supplies $1,354

Other expenses (transportation, health care, study abroad) $3,424

Cost of Attendance (student budget) $26,904

Estimated Average Cost of Attendance in Virginia Public Four Year, In-state Students, On Campus 2016-17

Source: Tuition, fees, room and board from SCHEV Tuition and Fees Report 2016-17. Books, supplies and other expenses from national averages provided by US Dept. of Education, IPEDS 2016-17 costs of attendance.

State support

Auxiliaries (State monitored with caps)


$27,276

$12,133 $12,137 $4,387

$10,145

$9,814 $9,989

$6,868

$1,230

$1,284 $1,354

$1,426

$2,847

$3,332 $3,332

$4,384

Private Nonprofit 4-Year(National)

Public 4-Year (National) Public 4-Year In-state (VA) Community college offcampus (VA)

Estimated Full-time Undergraduate Cost of Attendance 2016-2017

Other Expenses

Books and Supplies

Room and Board

Tuition and Fees$26,563

$41,498

$26,904

$17,065

Cost of Attendance Comparisons

Source: Tuition, fees, room and board from SCHEV Tuition and Fees Report 2016-17. Books, supplies and other expenses for VA from college reported data from SCHEV. National averages provided by US Dept. of Education, IPEDS 2016-17 costs of attendance.


Cost of Attendance vs Affordability Tuition and Educational Fees (E&G)

Non-educational fees (non E&G)

Room and Board

Books and Supplies

Other expenses (transportation, health care, study abroad)

Cost of Attendance (student budget) $XX,XXX

Source: Tuition, fees, room and board from SCHEV Tuition and Fees Report 2016-17. Books, supplies and other expenses from national averages provided by US Dept. of Education, IPEDS 2016-17 costs of attendance.


Affordability Example: UVA-Wise Student

Cost of Attendance (student budget) $19,151

Federal aid and state aid, scholarships ($11,417)

Avg. Net Price $7,734

Remaining balance

Loans $3,300

Student and expected family contribution (EFC) $436

Other (work, other sources) $3,684

Income Range $20,000-$29,000 (2014-15)

Source: SCHEV staff, SCHEV A02: http://research.schev.edu/ips/affordability_0.asp. Note: Components are individual averages which may not equal the average of the total.

http://research.schev.edu/ips/affordability_0.asp


$28,692

$19,871 $19,151

$23,475

$5,769

$11,180 $7,734

$12,219

CWM Radford UVA-Wise VT

Student Income Range of $20,000-$29,999 (2014-15)

Cost of Attendance Avg. Net Price

Cost of Attendance vs. Net Price

Source: SCHEV staff, SCHEV A02: http://research.schev.edu/ips/affordability_0.asp

http://research.schev.edu/ips/affordability_0.asp


33% 41% 39% 46%

0%

25%

50%

75%

100%

Low income Middle income Low income Middle income

4-year public

State and federal gift aid, expected family contribution Institutional aid, loans, work, other

Target

SCHEV Affordability Measure Goal: Meet half of the cost of attendance for low- and middle-income students through expected family contribution and state and federal grant aid by 2030.

Source: SCHEV staff, http://research.schev.edu/fair/strategicplan2.asp

2-year public


• Base Adequacy – Core funding needed for institutions to adequately meet their academic mission.

• Enrollment Growth – Additional costs above current funding levels needed to support additional students.

• Cost-Sharing Goal – Policy was adopted in 2004 to recognize a shared responsibility between the state and students in covering higher education costs. Goal would be that the general fund would provide 67 percent of the cost.

• Student Financial Aid – Additional funding needed to provide access to qualified students so that costs are not a barrier.

• Faculty Salaries – Salary levels needed for Virginia to be competitive with peer institutions in attracting and retaining quality teaching and research faculty. Referred to as the 60th percentile.

Funding Policies Related to Cost

Source: SFC staff presentations.


• The Joint Subcommittee on Higher Education Funding Policies recommended guidelines (2001) that estimate the funding needed to support adequately the institutions’ Educational and General (E&G) programs – resulting in the nickname “base adequacy.”

• E&G programs support the institutions’ core academic mission (instruction, advising, libraries, and computing).

• The guidelines incorporate national staffing norms and funding patterns at public peer institutions.

• Funding at the institutions under the model have been hovering around

100% based on the additional resources collected on the NGF side. • Three of the public four-year institutions (Old Dominion University, Virginia Military Institute, and

Richard Bland College) and Eastern Virginia Medical School are below 100% funding under the model.

Base Adequacy

Source: SFC staff presentations and SCHEV data.


Base Adequacy

Students

Faculty Program Support

Direct Cost (Instruction)

Academic Support

Student Services

Operation & Maintenance

Institutional Support Indirect Cost

(Support Services)

Direct Cost + Indirect Cost

Total Cost

Source: SCHEV Staff Presentation to VCU, February 16, 2015.


Base Adequacy Status Notes: (1) Based on actual FY17 student FTE and FY15-FY17 3-year average discipline credit hours. (2) The blended salary is from 2018-20 Activity-Based Budget (ABB). (3) Available resources are from 2018-20 ABB and preliminary NGF increases submitted through decision packages. (4) GF adjustments are OCR funding at NSU and VSU, and VCCS central office (FY18 adjustment).

(5) NGF includes required funding for programs 101-40, 102 and 103 made in October 2009. (6) Available resources are adjusted for “uniquely military” mission. Source: SCHEV staff analysis, October 2017.


Next Steps – 2018 Session


Source: SCHEV Agenda Book, October 30-31, 2017 and updates provided by SCHEV staff.

Item GF NGF Total GF NGF Total GF NGF TotalBase adequacy/ cost of education 7.2$ 7.4$ 14.6$ 14.4$ 14.7$ 29.1$ 21.6$ 22.1$ 43.7$ Faculty salaries 27.7$ 28.7$ 56.4$ 56.6$ 58.5$ 115.1$ 84.3$ 87.2$ 171.5$ O&M 8.6$ -$ 8.6$ 17.2$ -$ 17.2$ 25.8$ -$ 25.8$ HE Equipment Trust Fund (debt serv.) -$ -$ -$ 16.2$ -$ 16.2$ 16.2$ -$ 16.2$ Virginia Plan Initiatives 6.5$ -$ 6.5$ 8.5$ -$ 8.5$ 15.0$ -$ 15.0$ Subtotal for Operating Budget 50.0$ 36.1$ 86.1$ 112.9$ 73.2$ 186.1$ 162.9$ 109.3$ 272.2$ Undergrad. Fin. Aid 16.2$ -$ 16.2$ 29.3$ -$ 29.3$ 45.5$ -$ 45.5$ Graduate Fin. Aid 3.0$ -$ 3.0$ 6.0$ -$ 6.0$ 9.0$ -$ 9.0$ Transfer Grant 0.3$ -$ 0.3$ 0.8$ -$ 0.8$ 1.1$ -$ 1.1$ New Econ. Workforce Cred. Grant 1.0$ -$ 1.0$ 1.0$ -$ 1.0$ 2.0$ -$ 2.0$ Tuition Assistance Grant 1.4$ -$ 1.4$ 7.7$ -$ 7.7$ 9.1$ -$ 9.1$ Subtotal for Fin. Aid 21.9$ -$ 21.9$ 44.8$ -$ 44.8$ 66.7$ -$ 66.7$ Restoration of Financial Benefits 4.0$ 1.0$ 5.0$ 4.0$ 1.0$ 5.0$ 8.0$ 2.0$ 10.0$ Fund for Excellence and Innovation 0.3$ -$ 0.3$ 0.3$ -$ 0.3$ 0.6$ -$ 0.6$ Virtual Library of Virginia 0.9$ -$ 0.9$ 1.3$ -$ 1.3$ 2.2$ -$ 2.2$ Staffing for VA Research Investment 0.4$ -$ 0.4$ 0.5$ -$ 0.5$ 0.9$ -$ 0.9$ Subtotal for Systemic Budget Items 5.6$ 1.0$ 6.6$ 6.0$ 1.0$ 7.0$ 11.6$ 2.0$ 13.6$ TOTAL 77.5$ 37.1$ 114.6$ 163.7$ 74.2$ 237.9$ 241.1$ 111.3$ 352.4$

SCHEV Budget Recommendations - FY 2019 and FY 2020 - (in millions)FY 2019 FY 2020 Biennial Total


• Continue the work of the SFC Education Subcommittee and the Joint Subcommittee on the Future Competitiveness of Virginia Higher Education.

• Evaluate current funding methodologies and potential changes.

• Review performance and educational measures. • Propose items for the 2018 Session to make progress

toward higher education goals.

Next Steps


Autonomy/Other:

• Transfer agreements and program mapping/transfer tool.

• License student loan servicers.

• Dual enrollment “truth in advertising.”

• Change high school financial literacy requirements to include more on financing college.

• Restructuring (evaluation of requests).

41

Cost/Affordability:

• VIVA – open educational resources.

• Incentives to reduce the time to degree.

• Online Virginia Network – include VCCS.

• JLARC various study recommendations (i.e. fee caps, other growth, clarifying workforce grant language).

• Evaluating the need to standardize the cost components for financial aid calculations.

• State Finance Plan.

2018 Session Potential Recommendations


Appendix

42


Restructuring Timeline

43

Restructuring Act –

Level 1

Level 3 Management Agreements

Level 2

Level 2 can seek 3rd area

Extend Management Agreements

2003 CWM, UVA, and VT - “Charter University” legislation, doesn’t pass. 2004 - Jt Sub, SJ 90 study. 2005 - Restructuring Act passes, HB 2866 and SB 1327, all institutions obtain Level 1 autonomy.

2003-2005 Level 2 authority legislation passes, HB 1390 and SB 442. VCU Level 3 mgmt agreement, HB 1124 and SB 358.

2008 Management agreements are extended unless the Governor or General Assembly want to revise, HB 5010. Further budget language also extended agreements.

2014

CWM, UVA, and VT management agreements, HB 1502 and SB 675.

2006 Level 2 institutions can seek a third level of authority, budget language. No institutions have made use of this language.

2012

Level 2+ Pilot

5-year pilot for additional authority in IT, CO, and procurement for GMU and JMU, budget language.

2016

Source: SFC and SCHEV documents.


Administrative and Operational Restructuring Levels of Autonomy

44

3

2

1

Level 3 Autonomy

Broad autonomy in multiple areas including finance, HR, IT, procurement, leases, and capital outlay. Adoption of performance and other standards.

Level 2 Autonomy

Initially allowed greater autonomy in 2 of 3 areas: procurement, IT, and/or CO. SCHEV must certify performance benchmarks and institution adopts 1 new education-related measure per area.

Level 1 Autonomy

Managerial autonomy with BOV commitment to the statewide goals. Eligible for financial incentives if meet educational and institutional performance benchmarks.


Levels of Autonomy

45

1

2

3

Level 3 - CWM, UVA (UVA-Wise), VCU, & VT

Institutions with an unenhanced AA-bond rating or higher or a proven track record in two “Level 2” areas. Management agreement negotiated by the Administration and approved by the General Assembly.

Level 2 - CNU, LU, ODU, RU, UMW, VMI, VCCS, GMU (2+), & JMU (2+)

Those with an appropriate organizational structure to manage with limited state oversight and an approved memorandum of understanding (2/3 of the BOV) with respective Cabinet Secretary.

Level 1- NSU, RBC, & VSU

All with BOV commitment to the state goals.


Virginia Four-Year Public Institution Graduation Rates Vary

Source: SCHEV data, Cohort 2009-10; May 2017.

Documents

Higher Education Trends and Overview for the 2018 Sessionsfc.virginia.gov/pdf/retreat/2017 Charlottesville/111717_No8_HE.pdfHigher Education Trends and Overview for the 2018 Session