Education in the US * Education is a State responsibility, not Federal

1. Education in the US * Education is a State responsibility, not Federal * $800 billion industry, second largest after healthcare. *For post-secondary, there are 10,000 institutions with 17 million students (2001), worth $300 billion. * High school graduates expected to grow by 11%, 1999-08. * Institutions have vast autonomy, little interference from the state * The for-profit sector represents 12% of the industry. * Graduate enrolment is about 2 million in 2001. * A bachelor degree holder will earn 80% more than a high school diploma.

2. The 3-Tier Higher Education System in the State of California * Community Colleges (Santa Monica College etc.) * State Universities(Teaching) (California State University, North Ridge etc.) * Higher Level State Universities(Teaching & Research) (University of California, Berkeley, LA etc.)

3. Interesting Features of the US University System * Large amount of government budget allocation * Fund raising role, endowments, external contributions * Great diversity in the system of management * Freedom from interference by the state * Strict system of accountability in the state schools * Wide range of academic standards, accreditation is voluntary * Wide opportunity for creativity and talent development and a lot of academic freedom

4. Importance of Endowment - Buys faculty, students and state of the art infrastructure - Measure of alumni loyalty and industry confidence - Ensures quality of life on campus - Measure of the wealth of the institution - Ability to weather lean times - Financial stability and flexibility to grow and prosper

5. University’s Endowment(2001)(in millions) Harvard $17,951 Yale $10,700 Texas Univ. System $9,364 Princeton $8,359 Stanford $8,250 MIT $6,135 In the MIT Case: In 2001: Value of endowment lost 3.7% of investment value In 2002: Value expected to shrink a further 8%

6. Stanford Sources of Funds - 2001/2($1.9b) 36% Sponsored research 25% Endowment/Investment income 15% Student Income [14,000 students] 8% Healthcare services income 6% Expendable gifts 10% Other income Expenditures - 2001/2 54% Salaries and benefits 20% Maintenance, utilities, libraries, student stipends, other services 15% Other operating expenses 11% Linear Accelerator center

7. Univ. of California, Berkeley(2000/1) Income: $1,231 million. State of California 35.6% Student Fees 13.3% [33,000 students] Auxiliaries and Sales 10.8% Endowments 4.2% Other Funds 5.7% Federal Contracts and Grants 17.9% State Contracts 2.1% Private Gifts 10.6%

8. Percentage of Alumni who contribute to their Alma Mater Princeton 49% Yale 36% Caltech 35% Stanford 32% MIT 31% Harvard 27% Michigan 17% UC Berkeley 12%

9. University Management in US (Freedom and Divestment of Powers) Board of Trustee President - External Relations, Fund Raising Provost - Chief Academic/Administrator and Bursary Senate - Chaired by an elected Professor

10. Reporting to the President: VP (Development) CFO VP (Business Affairs) CEO/Director of Companies VP (Communications) President, Alumni Association

11. Reporting to the Provost: Deans of Schools Dean of Student Affairs Dean of Admission Director of Faculty/Staff Housing Vice Provost - Land & Buildings Vice Provost - Extended Education Vice Provost - Research & Graduate Policy University Librarian

12. Range of University Academic Standard: Top Ivory League: Harvard, MIT, Stanford , Princeton (Private, non-profit) Most liberal, open system: University of Phoenix (Private, for profit) Accreditation: Accreditation is entirely VOLUNTARY However students are eligible to get state funding if institution is accredited. Only the institution is accredited, not courses

13. Effect of Economic Downturn: - State institutions: State grants for state institutions cut - Private Institution: left to management but generally has to impose cuts - Endowment value, external contributions have reduced Effect: - Increase of tuition fees (MIT - 4.7% in 2002/3) - Lower salary increases - Less financial aid - Staff Lay-off - Postponement of faculty hiring and labs

14. Entrepreneurship Development - Silicon Valley best example - Most universities have Incubator Centers, Technology Licensing & Patenting Office - Entrepreneurship sabbatical(Stanford University) Stanford Research Park - Home to 140 companies - Employs 25,000 workers

15. Secret of Success of Silicon Valley * Long tradition of entrepreneurial spirit in the West coast * Conducive climate of the West coast * Abundant venture capital * Many companies operate in the area * Stanford alumni are ingrained with entrepreneurship and the concept of entrepreneurship sabbatical * Availability of expertise

16. Issues in Malaysian Higher Education: - Racial composition - Distribution of Economic Wealth/New Economic Policy - Socio-Political Scenario - National Policies on Education - Primary, Secondary, Post-Second - History of Higher Education - The Current Language Debate - Racial Composition and University Entrance - Accreditation of courses

17. Governing Acts on Higher Education in Malaysia: University and University Colleges Act: Private Higher Educational Institution Act:

18. University and University Colleges Act: - Chancellor appointed by the King - Vice Chancellor appointed by the Minister of Education - Members of BOD appointed by the MOE - BOD meets every month - VC is Chief Academic and Chief Executive Officer - Almost 85% of budget provided by the government - New courses need to be approved by MOE - Student Tuition is Minimal

19. Private Higher Educational Institution Act: - University is private, for profit - Chancellor appointed by MOE upon recommendation by BOD - President appointed by MOE upon recommendation by BOD - Setting up of university only by invitation of the MOE - Government does not provide any funding - Evaluation by LAN and approval by MOE compulsory before starting course - BOD meets quarterly - President is CEO and entirely responsible for profitability - President is Chief Academic and Chief Executive Officer - Tuition Fee is Higher than Government Universities

20. Challenges Ahead In Managing MMU * The expected changes in the country’s political scenario * The ever changing educational policies and scenarios * University’s role in the MSC * Needs of the parent company * To sustain university’s leadership position and company’s profitability * To expand the endowment collection

21. Prospective Areas For Malaysian Universities: * Fund raising effort * Accreditation of programs - Differing agencies * Program approval by MOE * Academic promotion standards * Greater empowerment of university officers * Percentage of graduate students

22. Comparison between US and Malaysian universities: - Cost of operation of US universities many times higher - Philantrophic spirit is significant in US - Entrepreneurial spirit far higher in the US - Greater autonomy in US - Larger fund availability in US

23. Strength of US Sytem - Availability of vast amounts of funds - Freedom encourages entrepreneurship, innovation and creativity - Fertile ground for realizing ones potential and ability - Nation of immigrants invokes spirit of ‘must work hard to succeed’ - Equal opportunities for all races and sexes - No apparent racial problems or serious racial divide

24. University Expenditure in Malaysia University of Malaya (UM) : $75 million [23,000 students] MMU : $25 million [14,000 students] Magnitude of scale UC,B:UM is 16 times. Source of fund: University of Malaya : 80% from the government MMU : 70% student fees