Effectiveness and Efficiency Project

1. Effectiveness and Efficiency Project Report to the House Appropriations Sub-Committee on Education and Economic Development January 25, 2005

2. Why an E & E Initiative? Maintain Affordability, Access and Quality Address fiscal pressures related to: • Tuition affordability • Projected enrollment increase of 30% over the next decade • “Baby boom echo” & “Thornton effect” • Escalating costs (including healthcare, energy, and technology) • Sustaining academic quality

3. E & E Legislative Report Report contains 16 Action Items: • Implementation under way • To be completed or substantially implemented over the next two years • Ensure accountability through internal and external reports • Savings directed at mitigating tuition increases and maintaining quality

4. E & E “Academic Action Items” Action items to mitigate tuition increases and build institutional capacity: • Faculty Workload - Increase teaching loads 10% across the USM • Time to Degree - Limit most baccalaureate programs to 120 credits • On-line and out-of-classroom learning - Students to complete 12 credits outside traditional classroom experience • Enrollment management - Maximize utilization of institutional capacity

5. E & E “Administrative Action Items” Action items to reduce costs, mitigate tuition increases and fund quality: • Review organizational structure of “special-purpose institutions” (UMUC, UB, UMBI, UMCES) • Procurement • Leverage USM’s buying power, e.g., PeopleSoft, IT, Electricity RFP • Enrollment Management Services • Streamline student services functions to eliminate unnecessary duplication • Support and Administration: • Collaborate on “shared services” such as Finance and Human Resource Management

6. Anticipated Impact • Building Capacity: - Academic initiatives will enable USM to serve an additional 2,100 students over the next three years (FY 2006 – 2361 FTES) -- 20% - 25% of enrollment growth -- no additional cost to the State • Reducing cost and funding quality: - Administrative initiatives will enable USM to free up money for investment in quality and to mitigate tuition increases • FY 2006 fiscal impact: - Academic Action Items: $9.5 million - Administrative Action Items: $17.1 million - Total Estimated E&E Value $26.6 million

7. USM Financial Aid Task Force

8. Financial Aid Task ForcePrinciples • Hold students with greatest financial need harmless • Emphasize grants over loans • Emphasize need-based aid • Work collaboratively (federal, state and institutional levels) • Redirect savings from efficiency efforts to financial aid

9. Financial Aid Task ForceRecommendations • Improve balance of need-based versus non-need- based aid • Increase financial aid funding at all levels • Target the 75th percentile of peers in average percent of need met • Allocate tuition increase revenue to need-based aid • Target fund-raising activities for need-sensitive scholarships • Increase community college transfer student access to financial aid • Modify graduate/professional financial aid to address faculty in workforce shortage areas

10. Financial Aid Task ForceRecommendations (cont’d) • Decrease student debt burden by increasing grants • Educate students about debt management and alternative funding • Monitor student debt burden • Ensure that students with greatest need graduate with least amount of debt • Streamline administrative processes through E & E Initiative

11. Summary USM undergoing a system-wide reengineering • Effectiveness and Efficiency Program continuing • Financial Aid Task Force completed • Tuition Task Force completed • Enrollment Study under way • Strategic Plan Update completed USM is addressing affordability, capacity and quality