Higher Education in the U.S. and Virginia JEREMY P. MARTIN, PH.D. - PowerPoint PPT Presentation

Some Current Trends in Higher Education in the U.S. and Virginia JEREMY P. MARTIN, PH.D. COLLEGE AND UNIVERSITY AUDITORS OF VIRGINIA CONFERENCE MAY 7, 2019 1

Some Current Trends in Higher Education Increasing Confidence in Institutional Financial Viability Shifting Sources of Institutional Funding Trends in Enrollment 2

Increasing Confidence in Institutional Financial Viability 3

Presidents' Confidence That Their Institution Will Be Financially Stable in the Next Five and 10 Years (2019 Survey) Next 5 Years Next 10 Years 70% 66% 63% 63% 59% 60% 56% 52% 57% 50% 53% 52% 50% 48% 40% 39% 30% 20% 10% 0% 2014 2015 2016 2017 2018 2019 Source: Inside Higher Education’s 2019 Survey of College and University Presidents 4

Presidents' Confidence That Their Institution Will Be Financially Stable in the Next Five and 10 Years by Institution Type (2019 Survey) Next 5 Years Next 10 Years 81% 80% 70% 66% 66% 66% 65% 64% 63% 61% 60% 60% 58% 57% 60% 52% 50% 50% 49% 50% 40% 30% 20% 10% 0% All Public Private Nonprofit Doctoral Master's/Bacc. Assoc. Doctoral/Master's Bacc. All Institutions, by Sector Public Private Nonprofit Source: Inside Higher Education’s 2019 Survey of College and University Presidents 5

Presidents' vs. Business Officers’ Confidence That Their Institution Will Be Financially Stable in the Next 10 Years by Institution Type (2018) Presidents Business Officers 80% 68% 70% 64% 62% 60% 57% 54% 54% 53% 53% 52% 52% 50% 49% 50% 47% 46% 44% 44% 40% 30% 20% 10% 0% All Public Private Nonprofit Doctoral Master's/Bacc. Assoc. Doctoral/Master's Bacc. All Institutions, by Sector Public Private Nonprofit Sources: Inside Higher Education’s 2018 Survey of College and University Presidents and 2018 Survey of College and University Business Officers 6

Increasing Confidence in Institutional Financial Viability Overall, presidents’ confidence in their institution’s financial viability has been increasing in recent years – both at 5-yr. and 10-yr. outlooks Public doctoral institution presidents have the greatest confidence in financial viability in the next five years. Private baccalaureate institution presidents are more confident in their financial viability over a 10-yr. horizon than the next five years. P rivate institution business officers are less confident than their presidents in the institution’s financial viability over the long term (2018 results). 7

Shifting Sources of Institutional Funding 8

UNITED STATES PUBLIC FTE ENROLLMENT AND EDUCATIONAL APPROPRIATIONS PER FTE, FY 1993-2018 14 $16,000 EDUCATIONAL APPROPRIATIONS PER FTE NET TUITION REVENUE PER FTE PUBLIC FTE ENROLLMENT $14,000 12 $4,060 $4,105 $3,916 $4,074 $4,101 $12,000 $4,898 $6,786 $6,788 $4,934 $4,075 $6,696 $4,854 $4,168 10 $4,969 $4,018 $6,524 $3,884 $4,385 $4,551 $6,335 $5,218 $3,785 $5,400 $3,657 Public FTE Enrollment (Millions) $6,159 $5,876 $10,000 8 Dollars per FTE $8,000 6 $6,000 $9,765 $9,533 $9,493 $9,405 $9,290 $8,997 $8,848 $8,671 $8,712 $8,695 $8,578 $8,481 $8,307 $8,265 $8,200 $8,141 $8,077 4 $7,841 $7,853 $7,690 $7,650 $7,454 $7,360 $7,155 $6,820 $6,689 $4,000 2 $2,000 0 $0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 NOTES: Data adjusted for inflation using the Higher Education Cost Adjustment (HECA). Full-time equivalent (FTE) enrollment equates student credit hours to full-time, academic year students, but excludes medical students. Educational appropriations are a measure of state and local support available for public higher education operating expenses including ARRA funds, and exclude appropriations for independent institutions, financial aid for students attending independent institutions, research, hospitals, and medical education. Net tuition revenue is calculated by taking the gross amount of tuition and fees, less state and institutional financial aid, tuition waivers or discounts, and medical student tuition and fees. Net tuition revenue used for capital debt service is included in the net tuition revenue figures above. SOURCE: State Higher Education Executive Officers Association 9

VIRGINIA PUBLIC FTE ENROLLMENT AND EDUCATIONAL APPROPRIATIONS PER FTE, FY 1993-2018 350 $18,000 EDUCATIONAL APPROPRIATIONS PER FTE NET TUITION REVENUE PER FTE PUBLIC FTE ENROLLMENT $16,000 300 $14,000 250 $12,000 Public FTE Enrollment (Thousands) $4,290 $4,385 $4,166 $9,498 $9,720 $6,100 $4,948 $6,367 $6,692 $9,443 $5,136 $5,295 $6,080 $7,373 200 $5,418 $5,959 $8,544 $5,097 Dollars per FTE $6,848 $5,225 $10,000 $8,065 $8,744 $8,315 $5,120 $5,387 $4,763 $8,000 150 $6,000 $9,009 100 $8,575 $8,649 $7,803 $7,408 $7,265 $7,312 $7,009 $6,814 $6,857 $6,721 $6,734 $6,661 $6,481 $6,517 $6,552 $4,000 $6,221 $5,992 $5,930 $5,936 $5,701 $5,379 $5,168 $5,236 $5,018 $4,808 50 $2,000 0 $0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 NOTES: Data adjusted for inflation using the Higher Education Cost Adjustment (HECA). Full-time equivalent (FTE) enrollment equates student credit hours to full-time, academic year students, but excludes medical students. Educational appropriations are a measure of state and local support available for public higher education operating expenses including ARRA funds, and exclude appropriations for independent institutions, financial aid for students attending independent institutions, research, hospitals, and medical education. Net tuition revenue is calculated by taking the gross amount of tuition and fees, less state and institutional financial aid, tuition waivers or discounts, and medical student tuition and fees. Net tuition revenue used for capital debt service is included in the net tuition revenue figures above. SOURCE: State Higher Education Executive Officers Association 10

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Institutional Sources of Revenue (IPEDS) Tuition and fees are revenues from all tuition and fees assessed against students (net of refunds and discounts & allowances) for educational purposes. Sales and services of auxiliary enterprises are revenues (net of discounts and allowances such as scholarships) generated by auxiliary enterprises that exist to furnish a service to students, faculty, or staff, and that charge a fee that is directly related to the cost of the service (e.g., residence halls, food services, student health services, intercollegiate athletics, college unions, college stores, and movie theaters). Total operating revenues is the sum of all operating revenues. They result from providing services and producing and delivering goods. 13

Institutional Sources of Revenue (IPEDS) State appropriations are amounts received by the institution through acts of a state legislative body, except grants and contracts and capital appropriations. Funds reported in this category are for meeting current operating expenses, not for specific projects or programs. Total non-operating revenues represents the sum of all revenues generated from non-exchange transactions. 14

Percentage of Total Operating and Non-Operating Revenues by Selected Source at Public, 4-yr. Institutions, FY2017 U.S. Virginia 60% Percent of Total Operating and Non-Operating Revenues 52% 50% 41% 40% 30% 26% 24% 20% 10% 0% State Appropriations Tuition and Fees + Auxiliary Enterprises Source: Author’s Calculations from U.S. Department of Education, National Center for Education Statistics, Integrated Postsec ondary Education Data System (IPEDS), 2017-18, Finance Component. Retrieved from https://nces.ed.gov/ipeds/datacenter on May 4, 20 15

Shifting Sources of Institutional Funding In the U.S., educational appropriations for higher education peaked in 2001 – on an inflation- adjusted basis and remain well below that level as of 2018. This is also the case in Virginia. In the U.S., enrollment in public higher education peaked in 2012 and has since declined/plateaued. This is also the case in Virginia, though the enrollment peak came in 2011. In the U.S., student-driven revenues are increasingly the primary source of institutional income. This is also the case in Virginia. 16

Trends in Enrollment 17

Headcount Enrollment at Virginia Public, 4-yr. Institutions In-State Students Out-of-State Students 200,000 174,795 180,000 160,000 33,204 140,000 121,953 120,000 23,044 100,000 80,000 141,591 60,000 98,909 40,000 20,000 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Author’s Calculations from State Council of Higher Education, E2: Fall Headcount Enrollment (1992 thru Current Year) 18

Change in In-State Undergraduate Headcount Enrollment from Max/Min Value since 1992 100% 94% 89% 80% 59% 60% 46% 38% 40% 34% 21% 20% 0% -4% -6% -9% -10% -13% -20% -16% -27% -33% -40% NSU VSU UVA-W RU CNU LU ODU VMI W&M VT UVA UMW VCU GMU JMU Source: Author’s Calculations from State Council of Higher Education, E2: Fall Headcount Enrollment (1992 thru Current Year) 19