FUTURES COMMITTEE: CHARTER REVIEW

2. FUTURES COMMITTEE: CHARTER REVIEW The UW Futures Committee was convened to: • explore the state of higher education funding across the country and in Washington State • discuss the current situation at the University • research cost and alternative delivery models and revenue enhancement • identify the University of Washington’s critical strengths • pinpoint opportunities to capitalize on potential solutions

3. FUTURES COMMITTEE: STATE APPROPRIATIONS

4. Snapshot UW: Workhorse & showhorse • UW provides 30% of all BA degrees in WA (40% of public BA degrees) and 39% of graduate and professional degrees (72% of public degrees) • 50k students plus 41K outreach students • Produced 14K degrees last year alone • Over half of BA students graduate with no debt • Oversees four hospitals provide 1/3rd of state’s charity care • Ranked in the top ten public research universities in the country by US News & World Report • First public research university in the country for federal research funding

5. REVIEW OF FIRST MEETING • President Young noted that the UW is on the cusp of significant change with respect to students, structure, and funding • Paul Jenny reviewed UW budget, student data, personnel data, degree production, and research activity • President Sexton discussed the differentiation of missions within higher education and affirmed that top universities should seek the most talented students and faculty, which is an expensive, but essential endeavor;

6. FORTHCOMING MEETINGS National Context, UW 101 Revenues & Options Meetings 4-6 Mtg. 2 Mtg. 1 Mtg. 3 Costs and Goals Exploration of Options and Ideas Identified by Committee

7. Contemplating College “Costs”Paul JennyVice Provost, Planning & BudgetingJune 14, 2012

8. GENERAL “COST” VS. “PRICE” PRINCIPLES • COST and PRICE are different but often conflated in discussion of college ‘costs’ • Costrefers to expenditures made by the institution for the purpose of instruction • on per-student basis • Pricerefers to the amount of money a student pays to attend

9. GENERAL “COST” VS. “PRICE” PRINCIPLES • It is easy to name the price of a degree; it is much more challenging to correctly evaluate its cost • Some expenditures are difficult to distribute among research, instruction and public service: e.g. faculty salaries and benefits • Why discuss costs? To align the price of a degree with its cost? To evaluate productivity? We cannot do this without also assessing quality • Regardless of the challenges, we can meaningfully discuss cost drivers and their evolution over time

10. Why does college cost so much? • It is a service industry, and service industry costs rise more rapidly than the cost of producing goods • Higher education prices have grown similarly to other personal services offered by highly educated providers (e.g. dentists, lawyers) • It is difficult for a service industry to increase productivity without decreasing quality – but remember, there is currently no established way to reliably measure quality

11. Uw context: constrained resources • At one time, the state legislature set UW enrollment and based tuition on an estimate of cost • Then the demand for more graduates increased and enrollments outpaced available state support • Overall tendency has been to “squeeze” in more enrollments with fewer resources and increased tuition, which places access to education and the quality of the education at odds

12. Shifting sources of Educational revenue

13. Funding trends • Funding per FTE is $3,000 less than it was in FY08, due to declining state funding and increasing enrollments • Over the last ten years, comparatively more expensive STEM degree production increased 60%

14. A tipping point at the UW? • Our primary educational goals include: • To contribute to building an educated and engaged citizenry in Washington. • To produce the graduates our economy needs in order to prosper • To make sure that all Washingtonians – regardless of income – have an equal chance to work towards a UW degree • To preserve the quality of a UW diploma and honor our graduates’ Husky Pride • And yet…

15. A tipping point at the UW? • Already doing more with less • Additional efficiencies plus student growth threaten quality and quantity of education, research and service • Non fungible sources are growing while educational funding sources decline • Public investment in unrestricted form unlikely to return • Tuition revenue can only be raised so much before the public mission is compromised

16. UW context: Education cost drivers • Human Capital • More than 77 percent of central educational resources are spent on salaries and benefits • Student Financial Aid • As we maintain student access, higher prices (tuition) create new costs (financial aid) • Physical Plant • Increasing deferred maintenance backlog • Technology • Educational delivery and administrative systems are at the end of their useful life

17. UW context: Education cost drivers • Faculty • We are raising enrollment while faculty numbers remain stagnant in comparison, increasing faculty’s instructional burden • Faculty compensation for instruction is relatively flat, which may encourage them to focus more on seeking lucrative research grants than teaching • We risk losing our best faculty to “richer” peers and limiting our opportunity to hire rising stars

18. Uw context: Education Cost Drivers

19. UW context: EDUCATION COST DRIVERS • The proportion of faculty and all other staff that will be retiring in the near future is fairly high

20. Uw context: financial aid and student access • If we admit students without regard to ability to pay and strive to at least maintain student access, higher prices (tuition) create new costs (financial aid).

21. Uw context: financial aid and student access • In fact, in order to maintain access, a higher proportion of tuition needs to be used for aid as tuition increases, unless there are other sources of aid.

22. WHERE DO WE GO FROM HERE? • Opportunities abound • Noted aging and underpaid workforce, evolving student needs, baccalaureate degree expansion exigency • What do we want to be, and how do we get there? • What do we do best and how do we preserve it while simultaneously expanding its reach?