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Fall Semester will be a tough act to follow.
Here are some highlights:
- We enjoyed record-setting enrollment of 10,133; (Spring enrollment is 9,705—a spring term record—and 105% of our target. Even better, we are approaching an 86 percent Fall-to-Spring retention rate.)
- We made impressive progress in our goal of increasing graduate student enrollment: an 18 percent increase to 1,167 students)
- We received the largest monetary gift in university history—$5 million—from the White Family Foundations to expand and enhance our hospitality and tourism management program, renamed the Purdue University Calumet White Lodging Center for Hospitality and Tourism Management.
- We enjoyed our best ever start for grants and contracts. Notably, they generated:
- $4.7 million for our Center for Innovation through Visualization and Simulation,
- $2 million for labs for our Water Institute and Energy Efficiency & Reliability Center, and
- Nearly $600,000 in equipment for our Mechatronics Engineering Technology laboratory.
- The Indiana Commission for Higher Education ICHE approved our RN to BSN (Registered Nurse to Bachelor of Science in Nursing) program, which begins in February.
- In our plan to expand our intercollegiate athletics program from two to 12 teams, we hired coaches of men’s & women’s tennis, men’s golf and women’s volleyball teams, which will begin completion in 2010-11.
- Nearly 95 percent of our academic programs have experiential learning courses in place. That is in response to our new requirement in which all baccalaureate degree-seeking students must complete two experiential learning courses as a condition for graduation.
We are realizing the fruits of our efforts.
Our success comes from the discipline of strategic planning and staying focused on the big things that elevate our campus.
Not all the fall news, however, was positive, as we took a 4.2 percent ($1.2 million) cut in our state-funded budget to start the 2009-10 fiscal year.
- We handled that cut by implementing plans developed during the previous year.
- We reduced our recurring budgets in a number of non-instructional areas and placed those funds in reserve.
- We also suspended the employee annual salary increase process.
- So we were able to start the 2009-10 fiscal year with a balanced budget and without the unpleasant prospect of mid-year budget reductions to our academic and support units.
- At the same time, the campus was allocated ARRA (federal stimulus) funds about equal to our budget cut for one-time use. This permitted us to continue needed repair and remodeling, despite the reduction in our recurring budget.
Another budget cut
In early December, we learned that we will take another reduction in funds.
The Governor announced a $150 million cut for higher education and asked the Indiana Commission for Higher Education to recommend its apportionment among colleges and universities.
After a short intermission for the holidays, and discussions in West Lafayette, we learned that the Purdue Calumet share of that cut would be about 6.1 percent of our state appropriation taken over the rest of this fiscal year and next.
What does this mean for Purdue Calumet in more concrete terms? How will it shape the rest of our year?
- Recall that the general fund provides about 45 percent of our annual operating budget.
- This translated into a cash reduction of about $3.7 million from our budget over the next two years. ($1.7 million in 2009-10 and $2 million in 2010-11)
- Our reduction is equal to our one-time ARRA federal stimulus funding plus the state-provided Repair & Rehabilitation funds for the next two years.
- We will use our strategic reserve and R&R money in year 1 and our project money and R&R money in year 2 to cover the reduction.
- Where repairs are pressing or projects strategic, we will use budget savings and tuition collected over our budgeted amount to cover those costs.
- It is likely, therefore, that there will be projects that we will need to put on hold.
It is important that we keep these issues from dominating our energies and our attention to strategic progress.
So, we plan to continue moving forward
- We need to extend our roster of Experiential Learning courses to meet our requirement.
- We need to continue to offer our students opportunities to engage in undergraduate research.
- We need to continue to develop international components of our academic programs across the curriculum.
- We need to successfully launch our RN to BSN program.
- We need to create a computer replacement plan for faculty.
- We need to implement our AQIP (Academic Quality Improvement Program) project on service standards.
- We need to begin assessing our general education courses and program, and
- We need to press on with program review.
These are some of the important strategic tasks that are still before us and that are within our reach.
- While we are doing these things, we also will need to plan for further reductions in our state appropriation.
- We cannot say today whether we will experience further cuts or not.
- Our state appropriation for next year is already set – it was passed last year.
- But the state’s rainy day fund is disappearing because of “smaller than expected” revenues. The state is not permitted to run a deficit, so its only recourse is to cut budgets.
- Prudence dictates that we prepare for that possibility.
Therefore, this spring we will engage in planning for an additional 7 percent reduction in general funds.
This is a significant amount of money (almost $2 million a year) At this time, we do not know if we can plan for tuition increases to offset this reduction. And we do not yet have an enrollment growth projection that might also provide some relief. In short, we are planning in an uncertain environment.
Our revenue challenges, so far, are not a reason to slow down or change direction on our annual goals or our strategic plan. We have thought carefully and collectively about what we want Purdue Calumet to become. We need to continue down that path as creatively as we are able. That means looking for new solutions to our existing problems.
Some of these solutions are already close at hand.
As I noted, despite the reduction in state funds, this is proving to be an extraordinary year for gifts, grants and contracts, and we have half the year to go.
We are having our best year yet for gifts. We need to build on these successes.
We need to continue to find alternative revenue streams.
Enrollment growth/student success
Forty-five percent of our budget comes from tuition. We budget for a certain amount of tuition revenue based on meeting an enrollment target. If we exceed the target, we keep the difference. We also become eligible for additional state funds – for enrollment growth and for student success.
Our strategy is not simply “more students,” but rather “better retention and more graduates.”
International and out-of-state students
State universities receive their appropriation based on enrollment and retention of Indiana students. We receive no subsidy for international or out-of-state students. On the other hand, we keep the full tuition from those students.
From a financial perspective, growth in international and out-of-state students helps us in the short run by bringing in more “per student” dollars in tuition than Indiana students do. Moreover, when our appropriation is cut, there is no cut on international and out-of-state tuition revenue.
Expanding these numbers is helpful to us, but not endlessly. We are currently at about 15 percent non-resident students. I think we could get to 20 percent without raising questions about limiting access for Indiana students and without betting too much on our ability to continue to feed these pipelines at that level.
There has been a great deal of interest in Purdue Calumet’s relationship with Higher Ed Holdings (HEH) to design and offer selected on-line education programs. This is new territory for our campus, but it offers some significant financial opportunities at a time when state funds are shrinking.
Based on a careful study of the opportunity and on faculty commitment to the project, we are moving ahead in Nursing and Teacher Education with partnership programs.
We are in the exploratory stage with Technology and Hospitality & Tourism Management.
Why are we doing this?
- There is a substantial demand and a substantial market for distance education programs in selected disciplines. Both our Nursing and Education programs have been losing students to distance education competitors.
- These are “high demand” areas that are capable of generating large enough enrollments to cover the investments in creating and offering the programs. Programs that cannot handle 300+ students at a time are not candidates for this model.
- Higher Ed Holdings leaves all the quality decisions in the hands of our faculty: student admission, course curriculum, evaluation, and grading. Faculty members also have veto power over the learning assistants who are links between the faculty and the students.
- HEH markets the programs. We do not have the staff or the expertise to do this well.
- Higher Ed Holdings has professional production capability and professional curriculum designers to help faculty put our courses into this distance education format.
- HEH makes a major initial investment in these programs that we could not afford on our own.
- The revenue that we likely are to realize from this joint venture will fund the growth of the participating programs. This will reduce the strain on campus budgets in other areas.
Purdue Calumet has been working with other Higher Ed Holdings university partners in Texas and Arkansas to be sure that we understand the issues we will need to address to make this program successful.
Strategically, this opportunity has the potential to fund growth in critical areas in an environment of extremely constrained resources.
If we are not satisfied with the results of the partnership, we will be able to wind down our commitment without undue loss of investment.
If, however, this partnership lives up to its promise, we will be a much stronger university for it. And we will be a dominant leader in these program areas.
Other growth areas?
That is the unknown…yet to be revealed.
Actually, it is up to Deans and Academic Programs to identify growth and revenue opportunities that:
- further the campus strategic plan,
- use the expertise of their faculty,
- provide opportunities for students, and,
- to a great extent, fund themselves.
We have successful models in some of the programs I have mentioned. We need more good ideas and a spirit of experimentation to put us a little more in control of our own future. I encourage you to help us bring this drama to a happy ending.