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Amid funding challenges, should universities follow the money?

"We need to look at everything"

    The Old Capital on the University of Iowa Pentacrest in Iowa City on Friday, May 2, 2017. (Cliff Jette/The Gazette)
    Higher Education
    Jul 10, 2017 at 10:17 am

    Public higher education is not what it used to be.

    In fact, many would say the “public” label has become a misnomer — at least when it comes to funding. In many states — including Iowa — cuts in legislative appropriations for public universities have some referring to them as “state-enhanced” instead of state-funded.

    The funding shift has meant all kinds of things, including higher tuition, rate spikes for students in expensive programs, ramped-up competition for research grants, increased reliance on philanthropy, programmatic cuts in the scramble to retain and recruit top faculty, and ramifications to university reputations and rankings.

    The changes also have prompted big thinkers across higher education to become bolder, to innovate, to experiment — catapulting, in some cases, previously disregarded ideas from the fringe to the mainstream.

    “I think we are at a place in the funding of higher education in the state that we need to look at everything,” University of Northern Iowa President Mark Nook told The Gazette in May.

     

    Iowa’s Board of Regents this summer plans to do just that by sitting down with lawmakers to mull a tuition-setting plan for the future — potentially mapping out structured rate increases for five years or beyond, as opposed to earlier board initiatives to freeze tuition.

    Details of this summer’s tuition task force have not been made public, including who will participate and how often they will meet. But the discussion comes at a time when university leaders are pressing for more freedom on several fronts, including differentiating tuition within their campuses and from one another.

    Where undergraduate resident tuition rates at the University of Iowa, Iowa State University and UNI historically have been closely aligned, some administrators have pushed for leeway to ramp up rates or keep them low — regardless of what the others are doing.

    Some administrators, students and even regents also recently have advocated for access to funds previously off limits — such as the Iowa Tuition Grant, a state-supported resource reserved to help resident students attend a private university or college in Iowa.

    And others have raised the idea of redistributing revenue from the university’s high-performing athletics programs among the campus’ academic enterprises.

    In light of the need to think outside the funding box, university administrators are seeking to increase philanthropy and collaboration with external enterprises. Some have suggested leniency from rules limiting partnerships with the private sector — perhaps paving the way for revenue-generating, business-centered endeavors related to research, discovery and intellectual property.

    “Currently, the ability to actively engage the private sector is limited because of a handful of limitations set out within state law,” UI President Bruce Harreld told The Gazette in an email.

    Limitations, he said, include a lack of protection for proprietary confidential information a private entity might share with the university as part of a collaboration.

    “In the next legislative session, we hope to seek legislation that would add these protections as well as streamline the innovation pipeline in the state,” Harreld said. “Allowing the UI, through its faculty, staff and students, more freedom to pursue new ideas, collaboration and economic opportunities will allow the UI to potentially grow new resources in research and investment from the private sector and would have the added benefit of creating new jobs and businesses across the state.”

    ‘We’re so low’

    In the immediate future, Iowa’s regent universities are expecting to generate an extra $25.7 million through a new $216 tuition increase proposed for all resident undergraduate students this fall — plus steeper hikes for UI students from out of state or enrolled in costlier programs. That revenue bump will help make up for state funding cuts in the 2017 and 2018 budget years amounting to more than $30.3 million.

    Max Freund / The Gazette

    The newest proposed tuition increases come on top of already-approved bumps for the upcoming year, amounting to a total 5 percent increase from last fall to this fall for resident undergraduates — the standard, often-compared rate.

    When it comes to actual dollar figures, those resident undergraduates on all three campuses will be paying $358 more per student under the proposal. But for nonresidents, graduate and professional students, and those enrolled in more expensive programs — such as engineering, medicine, nursing and dentistry — the increases vary widely.

    A UI student from outside Iowa pursuing a degree in dentistry, for example, is looking at a $4,216 one-year rate hike. Other groups, including undergraduate nonresidents pursuing engineering, also will see increases in the thousands.

    Some administrators believe that type of differentiation makes sense and will continue.

    “The fact is that the cost of education is not equal as you go across the campus,” UI Tippie College of Business Dean Sarah Gardial told The Gazette. “It’s simply not.”

    Her college is among those charging students more to enroll, and Gardial said she expects the trend will continue.

    “Frankly, what I think is more colleges will go down that path,” she said, explaining that a one-size-fits-all tuition policy doesn’t make sense.

     

    “Trying to come up with one tuition for the whole campus, you’re making a lot of compromises there, and I think we’re starting to pay a lot more attention to what the cost is as you move from college to college and from major to major,” she said.

    She — as with many other faculty, administrators and even students across the three campuses — also notes public higher education in Iowa is a steal when comparing what it offers and its price with national peers.

    “We’ve got a long way to go in terms of raising tuition,” Gardial said, pointing to the group of universities that Iowa’s regents have identified as UI peers in scope and mission. “We’re so low relative to our peers that it’s not going to be ground-shaking for us to raise tuition.”

    Both the UI and ISU in the last academic year were at the bottom of their peer groups for resident undergraduate tuition and fees — charging $8,575 at the UI and $8,219 at ISU compared with the universities of Illinois, Michigan, Minnesota, California, Wisconsin and Indiana, all of which charged more than $10,000. Penn State University led Iowa State’s peer group last fall with a rate and fees total of $17,900 for resident undergraduates. Illinois led the UI’s peers with a rate and fees total of $15,698.

    In states such as Tennessee, tuition increases have become a foregone conclusion — even when legislators, like this year, allocate more money for higher education. The University of Tennessee charged in-state students $12,724 in this last academic year, and officials said rates for that state’s 10 public universities, 13 community colleges and 27 applied technical schools are approved to increase up to 4 percent in the fall.

    Richard Locker, communications director for the Tennessee Board of Regents, said the Tennessee Higher Education Commission has approved a tuition-increase range of zero to 4 percent, and his entity is considering a 2 percent to 3 percent bump.

    “With this zero to 4 percent, we will have had the lowest three years of tuition increases in about 20 to 25 years,” Locker said. “We have had double-digit increases within that 20-year period. They’ve also been up 7, 8, 9 percent. So this past two years — and including this upcoming year — it will be the lowest three years of increases.”

    ‘They’ll pretty much have autonomy’

    Although the Tennessee system differs from Iowa’s in size and breadth, Locker said it’s seen a similar trend over the years away from state reliance “as a percentage of the total operating costs of the institutions.”

    That shift, along with projections it will need a larger, educated workforce come 2025, prompted the state recently to take the dramatic step of creating more independence for the public universities, community colleges and technical schools.

    “At what point do we have to do the bidding of the people who are funding us? It becomes pernicious at that point. … So it’s critical to the unbiased furthering of research and furthering of humanity to keep the funding of some universities completely homogenized.”

    - Jonathan Sturm

    ISU professor of music and former Faculty Senate president

     

    Until recently, Tennessee essentially had two higher education governance systems — one Board of Trustees for the University of Tennessee systems’ four campuses and one Board of Regents that oversaw the other six public universities and all its community colleges and technical schools.

    Four years ago, Tennessee Gov. Bill Haslam announced his “drive to 55” initiative, referring to the percentage of working-age Tennesseans he wants to have some form of post-high school education by 2025. Former Iowa Gov. Terry Branstad had set a similar goal to reach 70 percent by that time.

    As part of the Tennessee push, Haslam in 2015 unveiled the FOCUS Act, identifying a focus on college and university success. That legislation separated the six public universities formerly under the Board of Regents and gave them each their own independent boards of trustees.

    Lawmakers approved that legislation last year, and the transition period is nearing its end — with all six new boards having convened for the first time, Locker said.

    The goal of the separation is to better enable the institutions to pursue their individual missions by giving them more freedom to set tuition, hire and fire presidents, and create and eliminate programs — all in hopes of achieving the 55 percent educated workforce goal.

    “If those universities want to change their own policies, they’ll be able to do that,” Locker said. “They’ll pretty much have autonomy. If they want to create a new program, formerly they had to get Board of Regents approval, and now their own board can do that.”

    UI President Harreld has been vocal in his desire to achieve more control over the university’s budgetary components, including tuition rates, admission standards, program alignment and external partnerships — especially in light of dwindling state support.

    In some cases, he’s taken that control — shifting the budget-planning process into the hands of college deans and program directors and charging a small group of UI leaders to investigate a possible campus reorganization that could involve relocating departments, changing the number of faculty in various colleges and consolidating or eliminating units or majors.

    But Harreld earlier this year, while speaking at an Iowa City Chamber of Commerce event, said the state, regents and universities need to be working in harmony — and right now they’re not.

    “The question is, how do we get them in harmony?” he said.

    ‘It becomes pernicious’

    The answer to that question is paramount in sustaining excellence across Iowa’s campuses, with the struggle to adequately pay top faculty threatening academic quality.

    The University of Iowa, according to information Harreld has presented, in 2016 earned the lowest U.S. News & World Report rank among its peers in faculty salary. The UI’s 103rd spot — compared with the University of California-Los Angeles at No. 19 and the University of Illinois at No. 24 — represented a 20-spot slide from its 2006 ranking at No. 83, which was the worst at that time as well.

    Presidents at UNI and Iowa State similarly have vocalized concern over competing for faculty with fewer resources. Jonathan Sturm, an ISU professor of music and former Faculty Senate president, seconded the concern over faculty losses and weakening support for their academic and research endeavors.

    “If we keep raising it, it’s going to start scaring away non-resident students. And we really promote a culture of diversity here at Iowa, where we feel that having out-of-state students and international students does a lot more to enrich us.”

    - Grant Jerkovich

    Vice President of the UI Graduate and Professional Student Government

     

    And he acknowledged that — at least this year, in light of a struggling Iowa economy — tuition increases seem logical, noting comparative rates nationally. But he worries about going further down the path of declining state support.

    “If we cannot see a change in the economy, or if we do not see a change in prioritization from the government, we will probably end up being … instead of state-funded universities, we will be state-supported or state-enhanced,” he said. “And that means we’re moving more toward private education.”

    The impact, Sturm said, could be stark for low-income Iowans — a high school graduate population that is growing.

    “It cuts out a segment of society — usually it’s the lower class or the poorer segment of society — that can’t then have access to education,” he said.

    It also poses real risks to academic freedoms and the discoveries they enable. What if, for example, public universities started accepting corporate sponsorships?

    “At what point do we have to do the bidding of the people who are funding us?” he said. “It becomes pernicious at that point. So it’s critical to the unbiased furthering of research and furthering of humanity to keep the funding of some universities completely homogenized.”

    ‘We must remind ourselves’

    Some members of the university communities are resigned to the reality that state support might never return to the years when it accounted for 77 percent of the Board of Regents’ general education budget.

     

    Grant Jerkovich, vice president of the UI Graduate and Professional Student Government, warned if it doesn’t, the universities at least should be careful not to put too much of the extra tuition weight on the shoulders of out-of-state students.

    “If we keep raising it, it’s going to start scaring away non-resident students,” Jerkovich said. “And we really promote a culture of diversity here at Iowa, where we feel that having out-of-state students and international students does a lot more to enrich us.”

    But several lawmakers — most vocally those from districts that include Iowa’s public universities — have not given up on the ideology of state-funded higher education.

    “We must remind ourselves that the value of broad-based investment in higher education is twofold — economic growth and quality-of-life improvements based on merit in the marketplace of ideas,” Sen. Jeff Danielson, D-Waterloo, said. “It’s in the public interest to make these investments, and it can only be done principally by the public as the majority shareholder in achieving that goal.”

    Danielson got specific and suggested the state set a goal of providing 51 percent of the public universities’ revenues. At the start of the 2017 budget year, state appropriations accounted for 33 percent of the regent universities’ general education funding.

    “It’s both a symbolic number and substantive goal at the same time,” Danielson said. “Symbolic because when a majority of support for public universities comes from the public, the public is the majority shareholder and has credibility in guiding the goals. Substantive because it would give us a stretch goal to reach in the coming years that restores priority investment in Iowa, Iowa State and UNI.”

    If the state doesn’t plan to reverse its decline in public higher education investment, Danielson said, “I’m open to policies that allow the universities to operate with a balanced budget given the unique strengths of the core missions of each university.”

    l Comments: (319) 339-3158; vannessa.miller@thegazette.com

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