Weiss Memo, Cost Containment and Tuition increases

Jim PurcellADHE

Does the Director of DFA have authority to tell Colleges and Universities when or when not to give raises to their employees? ◦ I am not a lawyer. ◦ The memo gives good advice in these tough

economic times.◦ I personally agree with the memo.

Campus leaders who called ADHE for our interpretation have been advised that they should have a conversation with Director Weiss and his staff if they have questions about any action that is contrary to the memo’s intent. . .

beforehand.

Weiss Memo

Institutional Questions: Can we give raises to non classified

employees? Can we complete the pay plan

implementation for classified? What about lifetime service raises, etc?

Weiss Memo

Campus leaders should have a conversation with Director Weiss and his staff if they have questions about any action that is contrary to the memo’s intent.

Funding Available and Pay Plan Costs

Includes $9,350,000 in Tobacco Tax

Funds for Trauma Centers

Without Trauma Center Funds the loss would be

(-$23,758,740)

Minimal tuition

increases for FY 2010

Pay Plan Implementation Cost did not take into consideration employees not paid through E&G. Did not include the auxiliary staff costs. Did not include Faculty and non- classified staff.

Classified Pay Plan Implementation

Institution Fully Implemented Partially Implemented Remaining portion budgeted for:

ASUJ   Partially FY11ATU Fully    HSU   Partially FY11SAUM   Partially FY11UAF   Partially FY11UAFS   Partially FY11UALR   Partially FY11UAM   Partially FY11UAPB   Partially FY11UCA   Partially FY11UAMS   Partially FY11

Classified Pay Plan Implementation

Institution Fully ImplementedPartially

Implemented Remaining portion budgeted for:ANC Fully    ASUB   Partially FY11ASUMH   Partially FY11ASUN   Partially FY11BRTC Fully    CCCUA   Partially FY11EACC Fully    MSCC Fully    NAC Fully    NPCC Fully    NWACC Fully    OTC Fully    OZC Fully    PCCUA   Partially FY11PTC Fully    RMCC Fully    SACC Fully    SAUT Fully    SEAC Fully    UACCB Fully    UACCH   Partially FY11UACCM Fully    

Cost Containment and Tuition

Putting all the higher education budget pieces together.

What has been done to keep cost down? What factors compel institutions to increase

tuition? What has been the trend in tuition over

time? What can be done to keep tuition low?

Cost Containment and Tuition

Impact of Lottery Scholarships on Budgets of Colleges and Universities

1. State funding covers less than half of the cost.

2. If state support is reduced, the student’s burden is increased.

3. Lottery revenues change who pays the cost of college– it will not impact higher education budgets.

4. Increased student enrollment without increases in state financial support stresses the ability of colleges to meet student demand.

Financing Higher Education

Students, Parents,

Scholarships,Loans

College Tuition

State and other

funding sources

Lottery Scholarship

70% in 1980’s

Arkansas needs more graduates, but as with most good things it comes at a price.

$1,400

$1,500

$1,600

$1,700

$1,800

$1,900

$2,000

$2,100

$2,200

$2,30019

84…

1985

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2008

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Change in Purchasing Power of State Fundingper FTE Student

1984-85 to 2008-09$2,207

$1,453

34% decline in

purchasing power

per student

$1,322

$1,290

The Dilemma of Higher Education Institutions

Significant Enrollment increases while . . .

State support declines

Students expect and demand greater amenities

State Funds Per Student

FTE decline

Tuition Costs in Arkansas In Comparison to SREB

Tuition Increase from FY 2008 to FY 2009

0.2%2.0%

2.4%4.1%

4.4%4.7%4.8%

5.2%6.5%

8.1%8.7%

9.1%11.0%11.1%

11.9%12.0%

7.8%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%

MarylandWest Virginia

ArkansasTennessee

North CarolinaMississippi

LouisianaVirginia

DelawareFlorida

KentuckySo. Carolina

TexasOklahoma

AlabamaGeorgia

SREB

Tuition and Required FeesPublic Four-Year Colleges and Universities

In-State Undergraduates, 2008

$5,500$5,000

$7,100$6,600$6,600

$5,800$5,700

$5,400$5,100$5,000

$4,500$4,400

$4,000$3,800

$3,600$3,600$3,500

$7,700

United States (48%)SREB states (74%)

South Carolina (82%)Delaware (49%)

Virginia (23%)Maryland (33%)

Kentucky (109%)Arkansas (103%)

Texas (89%)Tennessee (77%)

Alabama (65%)West Virginia (57%)

Mississippi (41%)North Carolina (79%)

Oklahoma (60%)Georgia (31%)

Louisiana (34%)Florida (34%)

Median annual tuition and required fees reached $5,000 in SREB states in 2008. This was 74 percent more than in 1998 after adjusting for inflation. In Arkansas, tuition and fees were 5,700 — an increase

of 103 percent from 1998.

During same decade state

support declined from 60% to 50%

Tuition and Required FeesPublic Two-Year Colleges

In-State Undergraduates, 2008

$2,400$2,100

$3,500$3,200

$3,100$2,700$2,700

$2,600$2,500$2,500

$2,400$2,100

$2,000$2,000

$1,900$1,700

$1,600$1,400

United States (28%)SREB states (45%)

Kentucky (142%)South Carolina (128%)

Maryland (14%)West Virginia (58%)

Alabama (54%)Tennessee (77%)Oklahoma (49%)Delaware (63%)

Virginia (30%)Georgia (26%)Florida (26%)

Arkansas (62%)Louisiana (31%)

Mississippi (38%)Texas (47%)

North Carolina (88%)

Median annual tuition and required fees were about $2,100 for the SREB region in 2008. This was 45 percent more than in 1998 after

adjusting for inflation. In Arkansas, tuition and fees were 2,000 — an increase of 62 percent from 1998.

During same decade state

support declined from 60% to 50%

US Average

State Funds plus Tuition & Fee Income

Source: Delta Cost project “the dreaded “P” word

Total Funds per FTE by State 2006-07

$7,873$8,425

$8,731$8,952$8,984$9,124$9,159$9,240$9,274$9,368$9,514$9,611$9,715$9,824$9,847$10,023$10,096$10,143$10,165$10,253$10,387$10,419$10,540$10,618$10,635$10,741$10,881$10,911$10,932$10,940

$11,205$11,319$11,382$11,513

$11,731$12,299$12,317$12,484

$13,048$13,073$13,127

$13,614$14,487$14,514$14,579$14,616

$15,484$16,728

$17,408$17,738

$18,352

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000

FLCAND

WVWAMTCOMSLAARUTOROKSDMOKSGAIDIL

NCNVWINEUSTXOHVAMNNMAZSCIN

MHTNIA

KYNYMEMIPAALMDMARINJVTHI

CTWYDEAK

Total Funds = State Funds + Tuition & Fees

Source: Delta Cost Project: “The dreaded “P” word” July 2009

Arkansas is one of the 10 lowest states in total funds per FTE

Sou

rce:

Del

ta C

ost P

roje

ct: “

The

drea

ded

“P” w

ord”

Jul

y 20

09Productivity: Total Funding per Degree/Certificate 2006-07

$86,009$79,794

$75,744$72,846

$66,623$65,975

$63,822$59,465$59,420

$56,960$56,888

$56,280$56,090

$54,934$54,553

$53,535$52,888$52,572$52,491

$49,894$48,611

$47,749$47,672$47,453

$46,880$46,522

$45,904$45,833

$44,371$44,272

$43,820$42,948$42,873$42,847$42,693$42,408$42,198$42,177

$39,918$39,516$39,516

$38,365$38,364

$37,823$36,498

$34,594$34,330

$33,756$33,273

$30,619$29,075

$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000

AK.WYDERI

CTHINJVTMDNVNYALPAMAMECANMTNMINCSCTXNEIN

OHU.SMOVAIA

KYORMNARAZ

MSIL

NHID

WI.GALAKSSDMTWVOKNDUT

WACOFL

Arkansas is Among the Top 20 States in

Productivity

Productivity

Most

Least

Three Imperatives for Higher Education

Interim Legislative Study of Higher Education -Jeffress Three “Musts”:1. We must make sure state government

continues to do its part in funding higher education

2. We must limit the start up of new programs

3. We must ensure a net reduction in costs for students

1. Strengthening the Arkansas Education Pipeline

2. Improving Preparation 3. Decreasing Remediation 4. Accessing Financial Aid

5. Increasing Retention and Graduation

6. Enhancing Funding and Governance

7. Addressing Data Needs8. Supporting Economic Development

9. Issues for Further Study

Cost Containment Efforts

Four-Year Cost SavingsPersonnel

Two-Year Cost SavingsPersonnel

Other Cost Saving InitiativesPersonnel Changed Insurance Plans Shared clerical services Grant extension to provide salaries Hiring at lower salaries Conversion to paperless processing Hiring Faculty Administrators from existing

personnel

Four-Year Cost SavingsOperating

Two-Year Cost SavingsOperating

Other Cost Saving InitiativesOperating Partnerships with other institutions or local

businesses Used Institutional Personnel for Professional

Development Refunding Bond Issues Consolidated purchasing, printing, and

other services.

Four-Year Cost SavingsUtilities

Two-Year Cost SavingsUtilities

Other Cost Saving InitiativesUtilities

• Installation of Entrance Vestibules• Automated Computer Lab

Shutdown Software• Weekend power down• Programmable Thermostats• Replaced chillers• Replaced roofs with reflective

materials and increased insulationUAF – Capture the Kinetic Energy of students to help

power a building

Tuition and Fee increases

Four-Year InstitutionsResident Undergraduate Fort Smith is

an anamoly

Two-Year InstitutionsResident Undergraduate

BRTC and SEAC =increase in fees

NPCC big in increase in 2006-7

Non Resident undergraduate 2 and 4 Resident and Non Resident Graduate – Univ

Significant Points Non Resident 2-yr: Increase 15.7% over 5 years NR 4-yr: 22.4% over 5 years Non-resident tuition (GR and UG) is double the

resident rate Graduate increased over 20% in 5 years.

In your packet:

Financial Aid

Universal Application Homepage

ApplicationsAcademic Challenge (Nontraditional/Current Achievers) 36,707Academic Challenge (Traditional) 16,802AR Health Education Grant (non ADHE Program) 53AR Single Parent Scholarship (non ADHE Program) 409AR Geographical Critical Needs Minority Teacher Scholarship 222Go! Grant 34,524Governor’s Scholars Program 6,133National Guard (non ADHE Program) 19Law Enforcement Officers Dependents 60Military Dependents 540Nursing Student Loan Program 126Second Effort Scholarships 236SREB Minority Doctoral Program 12State Teacher Education Program (STEP) 775Teacher Opportunity Program (TOP) 1,615Workforce Improvement Grant (WIG) (Awarded by the institutions) 7,323TOTAL 104,856TOTAL UNIQUE ACCOUNTS 58,475

Arkansas Department of Higher EducationFinancial Aid

2011-2013 Biennial Forecast

$-

$10,000,000 

$20,000,000 

$30,000,000 

$40,000,000 

$50,000,000 

$60,000,000 

$70,000,000 

FY10 FY11 FY12 FY13

Second Effort ScholarshipsPodiatryChiropracticWashington Center ScholarshipsOptometry LoansOsteopathySingle Parent ScholarshipDependents of Law Enf. Officers, etcJr/Sr Minority Teacher ScholarsSREB Minority Doctoral ScholarsAR Geographical Critical NeedsMinority Masters FellowsSURF ProgramTuition AdjustmentDependents of POWS, MIAS, KIASOptometry GrantsTargeted Teacher DevelopmentDental LoansDental AidVeterinary AidNational Guard Tuition AssistanceSTEPTeacher Opportunity ProgramWorkforce Improvement GrantsHigher Education Opportunities GrantsGovernor's ScholarsAcademic Challenge Scholarships

21

Preliminary

Governor’s Distinguished

240262

315 315

358

392

209 215

252 262

309

3147

63 53 49

0

50

100

150

200

250

300

350

400

450

2005 2006 2007 2008 2009 2010

Eligible

Accepted

Declined

Evidence that we will need to begin thinking about our scholarship priorities.

Evidence that Smart Core is working

21

48

Financial Aid Funding Trend

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

$(10,000,000)

$-

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

General Revenue FA Expense FA Balance

Fund Balance peaked in 2009 at 53m

GR peaked at 48m in 2008Expense (Student Awards) has increased since 2005

Preliminary