Special Committee on Higher Education Affordability and Accessibility December 1, 2003

1. Welcome to Salisbury University! Special Committee on Higher Education Affordability and AccessibilityDecember 1, 2003 President Janet Dudley-Eshbach

2. “Maryland has established a method for comparing State general fund support for our public four-year institutions with State support at our peer institutions across the country—the funding guidelines developed by MHEC. Currently, it is estimated that USM institutions are at 64% of the funding guidelines—in other words, we are funded at 64% or our goal (which is the 75th percentile of peers for most USM institutions) for State support when compared to our peer institutions.” (Chairman of the USM Board of Regents, Clifford M. Kendall)

3. Salisbury University Performance Peers FY 2002 State Appropriation per FTES

4. Salisbury University is today funded at lower levels than in the early 1990s

5. Salisbury University How we have addressed the cuts over the past two years: Total $9,367,144 5

6. Positions Lost: • USM: 600 positions eliminated (including many that were vacant). • SU: 60 positions eliminated. Tuition Increases: • USM: Tuition increases constituted $75 million of a $200 million deficit. • SU: Tuition increases made up 39% of the total $9,367,144 lost to SU in State appropriations.

7. According to MHEC statistics, Maryland’s public tuition increases have not been out-of-line with what is happening nationally: The average increase in Maryland over the past two years was $1,064; nationally the average increase was $950.

8. Average Increase in Annual Full-Time Tuition & Fees Since Fall 2002 Note: Approval for across-the-board tuition increases of a certain percentage do not allow the institutions who have lower tuitions to “catch up” to other publics.

9. KEY POINTS: 1. Maryland ranks 42nd among all states in support provided for public higher education per capita. This is why Maryland is a high tuition state. 2. Maryland ranks 4th among all states in per capita income. We are not a poor state, yet we are starving our public higher education system. 3. Many states are spending more on education than in past years, but there are far more students being served. Per student funding has fallen in Maryland. 4. Cuts in State appropriations are a key factor in rising costs passed on to students.

10. Salisbury University Source of Revenue per FTES

11. When looking at tuition increases, it is important also to consider fees and fee increases. While some institutions raised both last year, SU held the line on student fees because of the significant increase in tuition. When the two (tuition and fees) are combined, the total increase was 15.8% (not nearly as high as the 22% tuition increase would suggest).

12. Maryland Public 4-Year Institutions Annual Full-Time In-State Tuition and Fees

14. Increases in financial aid have helped offset tuition increases. According to reports issued by the College Board, the National Association of Independent Colleges and Universities, and the National Association of State Universities and Land-Grant Colleges: “Over the past 10 years, grant aid has increased at a rate that surpasses that of tuition prices at both private and public four-year colleges. In constant 2002 dollars, grant aid has grown by 85% since the ’92-93 academic year, while tuition at public four-year colleges has jumped 37.9%, and tuition at private four-year colleges has risen 39.2%.” (Chronicle of Higher Education, Oct. 31, 2003) Comparison of Average Institutional Financial Aid Awards for Five USM Institutions 1996-2000

15. Scholarships Awarded at Maryland Public Institutions - Fall 1999

16. Percentage of Loans in all Funds Awarded Among Select Maryland Publics - FY 2000

17. Funding decisions to date have supported the research mission of Maryland’s public universities, but have not helped to build capacity for undergraduate student education. USM Appropriation per FTES: FY 2004

18. USM: FY 2004 Appropriation per Student And In-State Tuition and Fees

19. Enrollment Growth and the Need To Increase Capacity: By 2010 there will be an increase in higher education enrollments of 22% to 31%. (MHEC, USM & MACC data)

20. Salisbury University Number of Freshman Applicants vs. Number of Freshman Enrollments; Mean SAT of New Freshmen

21. Transfer Issues: Approximately 40% of the degrees we award at SU go to transfer students. If SU cannot create more capacity for freshmen students, increasingly we will become a transfer, upper-division institution. Three-fourths of transfers to SU are from community colleges. (Of these, only 4% hold an associate’s degree.)

22. Efficiency Measure: Appropriation per Student vs. Graduation Rates To meet undergraduate enrollment growth and build capacity in a time of constrained State funding support, resources should be directed to those institutions that offer the greatest “bang for the buck,” those that require a lower funding per FTES and yet have high graduation rates.

23. Attempts to Respond to Critical Workforce Needs Off-Campus: Teacher Education: In Fall 1999 SU had 1,147 students majoring in education. In Fall 2003 we have 1,176 students majoring in education. Nursing: In Fall 1999 SU had 221 students majoring in nursing. In Fall 2003 we have 369 students majoring in nursing. On-Campus: • The retention of faculty and staff (and, yes, administrators!) is a major issue at SU and other resource-starved campuses. • We are losing competitiveness after three years without salary increases. The private colleges and universities have not had this constraint! • The best way to increase one’s salary is to find a job elsewhere. We are experiencing “brain drain” as people in high demand move out of Maryland.

24. Recommendations

25. Recommendation # 1: Commit to adequate and more predictable (multi-year allocations?) State funding support for Maryland’s public colleges and universities. Recommendation # 2: Apply the funding formula equitably. Recommendation # 3: • Reward institutions that show high performance in terms of graduation rates and other measures.

26. Recommendation # 4: Continue to support the capital needs of those institutions that can demonstrate their efficiency and effectiveness. Recommendation # 5: Authorize and encourage growth at those institutions that give more bang for the buck. Over time, redistribute enrollments and State funds to the comprehensive public universities. Currently, some public institutions subsidize others, and not in a way that promotes access and affordability. Recommendation # 6: • Determine the role of Maryland’s research institutions: They are more expensive to operate and do not meet burgeoning undergraduate demand in the most cost-effective way.

27. Recommendation # 7: Since the political reality is that not all USM institutions are funded at the same level of the funding guideline, allow institutions increased flexibility to set tuition rates based on: • student demand • State support per FTES • mission • performance • marketing strategies Recommendation # 8: • Do not impose tuition caps unless and until • the funding guideline is applied as a formula and not used selectively • limits on tuition increases are tied to guaranteed and adequate State appropriations.

28. Recommendation # 9: The State of Maryland generously supports private colleges and universities with State taxpayer dollars. At a time of declining State support, should these funds not instead go to public colleges and universities? As Maryland’s publics raise tuition to offset cutbacks in State appropriations, our publics are becoming more “private.” Should Maryland’s citizens not expect to have affordable access to their public institutions of higher education?

29. Thank you for your on-going commitment to Maryland’s public colleges and universities.