Dear Friend of Indiana University,
The start of a new year brings with it, among other things, the start of another session of the Indiana General Assembly. This year’s “long” session will be dominated by the construction of the state budget for fiscal years 2016 and 2017, which includes funding for Indiana University and other public universities across the state.
Indeed, many of us at Indiana University – including myself – are already hard at work sharing the university’s enduring value proposition and its commitment to the people of Indiana, and making the best possible case to the state’s political leaders that IU is deserving of continued strong financial support.
Fortunately for all of us who care deeply about this institution and its mission to educate and perform research at the highest levels, IU comes into the current legislative session on extremely solid footing. We continue to enjoy strong relationships with the state’s political leaders, many of whom know first-hand from their time at IU the value that the university provides to Indiana residents.
The state sent a strong signal of support for higher education in the last budget session when it reversed a recent trend of flat or declining funding by approving a 3.5 percent increase for higher education in the current budget. In doing so, however, the state also made it clear that it expected better performance and outcomes from its investments made in higher education on behalf of Hoosiers. More funding was to be based on how well each institution performed on a series of specific measures, primarily with respect to helping more Indiana residents to earn college degrees.
Everyone associated with IU can be proud of the fact that on virtually all of these measures, IU significantly outperformed all other four-year institutions in Indiana. This fact is reflected in the performance numbers compiled by the Indiana Commission for Higher Education, which resulted in the Commission recommending performance budget increases for all IU campuses.
As in any other aspect of life, we have seen that measuring and rewarding performance does work. We at IU see ourselves as partners with the citizens of our state. We have listened carefully in recent years to the concerns of Hoosiers on a variety of issues related to higher education, and our record of responding to those concerns is borne out in a number of important ways for the state.
Responding to the call for more Hoosier graduates
State leaders, from the governor to the legislature to the Indiana Commission for Higher Education, have made it clear over the past several years that public universities and colleges in Indiana must do a better job of producing Hoosier graduates – both when it comes to increasing the rate of degree attainment and in graduating students who have the skills necessary to successfully compete in today’s global job market.
In fact, performance measures instituted by the commission that determine a significant portion of state funding for universities are designed to specifically address the issue of degree attainment, the number of students graduating with high-impact degrees (such as those in STEM fields), student persistence (students returning to college after their first semester and first year) and on-time degree completion.
I am pleased to report that by all of these measures, IU has demonstrated that its mission is aligned with that of the state.
For example, over the past three years IU has produced 63 percent of the total net increase in bachelor’s degrees awarded across all of the state’s public institutions, 68 percent of the total increase in on-time degrees, and 79 percent of the total increase in high-impact degrees. Additionally, IU has had far and away more success in increasing student persistence rates than any other public institution in the state over the same period.
Keeping a world-class education affordable
At the same time that IU is graduating more students and producing more on-time graduates than ever, we have placed an even greater priority on ensuring that students leave IU with as little debt as possible. As I have detailed in previous updates, the university has instituted a number of programs in recent years to keep the cost of attendance as low as possible, which is necessary for many of them to attain their educational goals, while also educating our students on the implications of incurring debt.
Those efforts are bearing fruit. For the fall semester of 2014, for example, more than 12,000 IU juniors and seniors across the state saw no tuition increase under our “Finish in Four” program, which freezes tuition and fees for those students on track to graduate in four years after their sophomore year. All of our students benefitted from the lowest tuition increase in 40 years in the current two-year tuition cycle.
Initiatives such as these, when coupled with a three-fold increase in institutional financial aid for undergraduate students over the last seven years – thanks in large part to the extraordinary generosity of our donors – have kept average net cost of attendance at IU Bloomington the lowest among the 13 public universities in the Big Ten. They also have played a role in continued strong enrollment across all of our campuses at a time when many universities are seeing a decline in students.
Addressing student debt
As I mentioned, incurring debt to achieve the dream of earning a college degree is a necessity for many students, and for most it is an excellent investment in their futures. At the same time, we have a responsibility to help our students make sound financial decisions based on a solid understanding of the implications of taking on that debt.
In some cases, the simplest measures to assist students’ decision making can yield extremely positive results. For example, as part of a broad effort to tackle the issue of student debt that we launched in 2012, IU now communicates more frequently with students who take out student loans. Those efforts include providing these students with a detailed breakdown of their debt and estimated payout levels after they graduate. In addition, we are doing more than ever to offer students information on alternatives to student loans, such as grants and scholarships that may be available.
The results of this outreach, along with new programs such as peer-to-peer financial counseling and a free online financial literacy course that is required for all incoming freshmen, have been nothing short of remarkable.
The number of IU students who took out federal student loans fell 11 percent during the 2013-14 fiscal year from the previous year, with the total amount of borrowing also decreasing by 11 percent, or $31 million. Preliminary data also suggests that borrowing continued to decline in the first part of 2014-15, and anecdotally we have heard from many students who have credited our work with helping them make better decisions regarding their borrowing.
Building toward a stronger future
Everyone at IU is appreciative that our demonstrated success in facilitating student achievement has been recognized by state leaders in recent years and we look forward to working with the governor, higher education commission and the legislature during the current session to build toward an even stronger future for IU and the state of Indiana.
In addition to the funding that will be determined by IU’s achievements on the performance metrics created by the state, we also will be making a number of additional requests for operating or capital funding during the budget session. Here is a brief summary of the most noteworthy requests.
- $ 5 million to expand student success initiatives at our regional campuses, which provide a great deal of potential to help the state attain its ambitious goals around college degree attainment.
- $5 million to enable IU, through our Office of Engagement, to assist Indiana companies and governmental units by offering access to the university’s considerable faculty and staff expertise in information technology and informatics.
- $24.7 million for repair and rehabilitation of facilities across the seven IU-managed campuses in the state. This amount is based on the level of funding recommended by the Commission for Higher Education.
- $184.4 million for five special repair and rehabilitation projects on our campuses including the continued revitalization of the Old Crescent portion of the Bloomington campus, which we were very pleased to see was included in the governor’s recently released budget recommendations.
- $19.2 million for IU’s portion of a new multi-institutional health and medical education center in downtown Evansville. This project, which would greatly expand IU’s medical education presence in the city, also has been included in the governor’s budget recommendations, for which we are grateful.
A word on future tuition rates
For obvious reasons, tuition-setting cycles at Indiana public universities and colleges mirror the state’s biennial budget cycle. Finding the right balance of funding is a complex task that relies heavily on the level of state support provided to universities.
Despite the long-term decline in state support for higher education in Indiana and across the nation, we have been heartened in recent years by the commitment the state has shown to higher education in response to efforts by IU and other institutions to do their part to address issues of affordability, access and student success. At IU, state funding accounts for about 17 percent of the university’s total operating cost across all of our campuses, with the remainder coming from tuition and fees, donors and research dollars generated by faculty and staff.
We are keenly aware that despite improvements in the state and national economy over the past year the “sticker price” of a college education remains daunting to many current and prospective students and their families. With those concerns in mind, senior leaders at IU intend to thoroughly examine the university’s cost structure and take into account the level of state funding approved by the legislature in arriving at a tuition recommendation for our Board of Trustees this spring.
That recommendation will be designed to find the “sweet spot” that allows IU to remain an affordable option, while also providing the funds necessary for the university to continue delivering on its promise of providing a world-class educational experience. We will share more details on our thoughts around tuition for the next two years in the coming months and, as always, the public will have a chance to comment on any proposed changes.
None of IU’s success would be possible without the hard work of our talented faculty and staff, and the steadfast support of our alumni and friends around the world. As always, my deepest gratitude goes out to everyone for all you do to keep Indiana University strong.
Michael A. McRobbie