Office of the President

Systemic Change NOW: Performance Funding and Student Success

September 14, 2011President John D. Haeger

Office of the President

ACCOMPLISHMENTS - FY 2011• Record enrollments: 25% growth (in FTE) since fall 2008

• Four Forest Restoration Initiative agreement

• $1.5 million for Charles Olajos and Ted Goslow Chair of Environmental Science and Policy for the Southwest– Dr. Tom Sisk

• Dr. Keim helps researchers uncover source of Haitian cholera outbreak

• Top grant awards FY 2011:– The Partnership for Native American Cancer Prevention: $1.7 million– Microbial Forensics (Dr. Keim): $1.6 million– ERI: $1.5 million– American Indian Air Quality Training Program: $1.5 million– Northern Arizona University Noyce Fellows Program: $1.5 million

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Office of the President

CAPITAL PROJECTS

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Completion 2012• San Francisco Parking Garage• Residence Halls• Ardrey Auditorium• Classroom Upgrades• NAU “Foundation” building

Potential Future Projects• Multi-purpose Facility• Science/ Health Facility

Completion Fall 2011• Health and Learning Center• Skydome• Liberal Arts• North Plant• Native American Cultural Center• North Quad• Transportation Spine• Science Lab Facility

Office of the President

TRANSPORTATION• Transit spine connecting

downtown, NAU campus, and Woodlands Village

• $6.2 million in federal funding

• Joint project of NAIPTA, the City of Flagstaff, and NAU

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Office of the President

NATIONAL ECONOMY

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9.1%

Office of the President

STATE BUDGET

• FY 2012 TOTAL OPERATING BUDGET: $ 8,355.4 B

• JLBC: The 3 Main Drivers of General Fund Spending Are Education, Health, and Prisons

K-12; 41%

Medicaid; 24%

Prisons; 12%

Higher Educa-

tion; 9%

State Work-ers; 6%

Debt Service;

3%Other; 5%

Office of the President

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Office of the President

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Office of the President

UNIVERSITY BUDGET

Office of the President

ENROLLMENT GROWTH

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2003 2004 2005 2006 2007 2008 2009 20100

5,000

10,000

15,000

20,000

25,000

30,000

13,027 12,71714,766

17,5295,048 4,359

4,517

4,033462 1,318

2,593

2,956662 675

631

686

Flagstaff

Community Campuses

Online

YumaFall 2010 Enrollment: 25,204Fall 2011 Enrollment: Likely flat

Office of the President

FY11 BUDGET

11Sage shaded pieces are the basic university expenditure supports

Yellow shaded pieces provide some university support

Red shaded pieces are not generally available for direct support

State Gen'l Fund, $134 , 29%

Net Tuition & Fees, $148,

33%

Grants & Contracts, 51, 11%

Fed Fin Aid $36 8%Private Gifts, 13.4, 3%

TRIF, 11, 2%

Auxiliary Revenue, 47, 10%

Other Revenue, 15, 3%

Estimated all funding sources total = $455 million

FY12 BUDGET SCENARIO

State Gen'l Fund, $103, 24%

Net Tuition & Fees $154,

36%

Grants & Contracts, $48 ; 11%

Fed Fin Aid $36,

8%

Private Gifts

$15, 3%

TRIF $1

2, 2%

Auxil-iary Reven

ue, $46, 11%

Other Revenue 16 4%

Estimated total = $430 million

Office of the President

NAU TOTAL TUITION, FEES, AND STATE APPROPRIATION/ FTE

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Office of the President

FY 2012 BUDGET PLAN REDUCTION OF $198MNAU SHARE IS $30.1M

Strategy Approx. Amt DiscussionTuition and Fee Collections

$6-8M ($6 million with

stable enrollment)

• Rebate new resident 2011-2012 Pledge students $350 (estimated $1.2M)• Additional financial aid (RSA and scholarships) to be provided estimated to be $3.5M• Graduate Assistant Waivers from 75% to 100% of Tuition

Reductions, savings, revenue growth from Divisions, Debt Service, Salaries and Benefits (Employee Related Expenses – ERE)

$15M • FY 2011 Voluntary Retirement Program for Tenured Faculty should bring in $1,2-$1.6M with ERE• Debt service reduction of $1.9M• Changes/increases in benefits prices for employees •Utility reductions and other divisional and central reductions

Operating Efficiencies in all Divisions

$0-$2M • Innovations that reduce costs per FTE

Reduce state budget flexibility and one time expenditures, reserves, auxiliary accounts

$4-7M • Diverting one-time funds for FY12 and FY13 knowing our base or structural deficit must be corrected by FY14

Office of the President

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Provost94.947%

EMSA (Enrl Mgmt & Student

Aff)28.114%

Extended Campuses

24.312%

Capital Assets15.28%

Information Technology

Services14.87%

Finance & Administration8.74%

President6.73%

Advancement2.81%

Research2.71%

Institutional Effectiveness1.61%

State and Local Resources (Mil-

lions)Cabinet Level Target

Reduction (Millions)

Provost $3.8 EMSA (Enrl Mgmt & Student Aff) 1.1Extended Campuses 1.0Capital Assets 0.3Information Technology Services 0.6Advancement 0.4Finance & Administration 0.3President 0.3Research 0.1Institutional Effectiveness 0.1Total 8.0

Office of the President

FY11-12 SIGNIFICANT INVESTMENTS• Academic Building Repairs

• Transportation Spine/NAIPTA support

• Student Success/Retention

• Oracle/PeopleSoft, ePlanning, etc. software

• Technical Adjustments, Workforce Planning, and Minimum Wage

• 100% Graduate Assistant Waivers

• Class Coverage and Undergraduate Support

• Research and Compliance15

Office of the President

PERFORMANCE FUNDING

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Office of the President

ABOR – SIGNIFICANT CHANGES• New Regents• Performance Metrics

• Performance Funding• Disparity Study

• Financial Aid– Options:

• Performance based• Loan forgiveness• Financial literacy• Voucher program

Office of the President

PERFORMANCE FUNDING (ABOR)Base

+Adjustment to the Base

+Performance Funding

=University Funding

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Components of Performance Funding1. Increases in SCH completed2. Increase in number of degrees

produced3. Increases in research funding4. Success in meeting the state’s

economic development goals5. Maintaining or enhancing quality

The model will allocate monies approximately as follows:• 50% in support of the growth of degrees awarded• 25% in support of the growth of completed student credit hours• 25% in support of the growth of external funding for research and public service

Office of the President

• The Carnegie Classification to differentiate between ASU and UA (Very High Research) and NAU (High Research).

• ASU and the UA will use weighting of 33.3% each for degrees, student credit hours (SCHs) and research.

• NAU will use a weighting of 42.5%, 42.5% and 15%, respectively, for degrees, SCHs and research.

• This distinction will ensure that NAU is not penalized for having a relatively small share of current and anticipated research spending.

PERFORMANCE FUNDING: UNIVERSITY MISSION-SPECIFIC WEIGHTING

Office of the President

Change in Major Metrics—Average Annual Change for Three Years Ending in 2010-11:

• Degrees Awarded: ASU—791, U of A—220, NAU—274

• SCH’s: ASU—70,737, U of A—30,029, NAU—33,319

• Research Spending (millions): ASU--$20.45, U of A--$28.43, NAU--$1.95

At 100% State Funded, this = $24M for NAU

PERFORMANCE FUNDING: WHAT IF PROPOSED FUNDING WAS USED IN THE FY 2013 BUDGET

REQUEST?Using a 3-year moving average growth for performance metrics:

Office of the President

FY 2013 BUDGET REQUEST

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Request $

Disparity Funding (Base)3,302,600

Student Success through Instructional Innovation -- one time (non-base) funds

11,600,400

Performance Based Funding – If the formula was used, depending on State Share requested, our performance would have produced a $12-$24M request

Office of the President

SYSTEMIC CHANGE INEVITABLE

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Office of the President

MEETING THE GOALS+ More students + Fewer Faculty per FTE+ Performance Funding+ Restriction on Tuition ___________________How does NAU succeed in this environment?

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AccountabilityPerformance Funding

Technology

Office of the President

U. of Texas Adopts Plan to Publish Performance Data on Professors and Campuses (8/25/2011)

Ohio Board of Regents moves forward with Enterprise University Plan (8/25/2011)

Traditional Universities Considering New Approaches (8/24/2011)

How to Fix Our Math Education (8/24/2011)

State Officials Say Difficult Changes Are Needed to Help More Students Graduate (8/10/2011)

Postdocs Can Be Trained to Be More Effective Than Senior Instructors, Study Finds (5/11/2011)

Governing Boards Turn to Technology to Reinvent the University (4/5/2011)

Restructuring Is Key to Turning Freshmen Into Graduates (11/12/2010)

Hard Times Require Better Planning and More Online Offerings, Speakers Tell Public-University Leaders (11/15/2010)

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Office of the President

DISRUPTIVE CHANGE IN HIGHER EDUCATION – A NATIONAL VIEW

• Public demands accountability: poor performance vs. high tuition

• National Governor’s Association: complete to compete

• President Obama’s agenda

• Lumina Foundation, Bill and Melinda Gates Foundation

• Western Governor’s University

• Texas, Florida, Ohio…

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1950s delivery system will not work in 2011 environment

Office of the President

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

30%

35%

40%

45%

50%

55%

43.4%43.8%

46.6%

51.3%50.1%

48.3%47.0%

48.1%

52.6%50.0%

49.0%

51.6%

6-year Graduation Rate: First-time Full-time Freshman Cohort

SYSTEMIC CHANGE IN THE ACADEMIC DIVISION

• Retention and graduation rates: – Made progress over the years – BUT still MUST improve

Cohort Year

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

62%

64%

66%

68%

70%

72%

74%

65.7%

67.2%

69.9%70.4%

69.6%

71.8%

71.3%

69.1%

71.5%

71.0%

72.5%

1-year Retention Rate: First-time Full-time Freshman Cohort

Cohort Year

Office of the President

HIGH-ENROLLMENT CLASSES WITH DFW% >= 25%, FY11

(FTFT COHORT)

MAT 136

MAT 108

PHI 150

MAT 119

POS 120

COM 101

BIO 100

MAT 125

ANT 104

BIO 181

ANT 101

PSY 101

0%

5%

10%

15%

20%

25%

30%

35%

40%

DFw

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Office of the President

HIGH-ENROLLMENT CLASSES WITH DFW%<=15%, FY11

(FTFT COHORT)

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REL 150

SPA 101

ANT 103

BIO 181L

ENG 105

HON 190SC

111

GLG 112

EPS 1

01FS

141

AST 180

ENG 205

ART 135

EGR 186

NAU 100

GLG 112L

EDF 2

000%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

DFW

Office of the President

AVERAGE STUDENT CREDIT HOURS TAKEN AND COMPLETED FOR CREDIT, FALL, 2010 (FTFT

COHORT)

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Initial Credits # Students

Average Credits

Completed

% Students Completing

All Credit Hours

Attempted12 183 8.7 52%

13 423 10.7 63%

14 768 12.5 73%

15 1,076 13.6 83%

16 932 14.3 69%

17 392 15.2 71%

18 91 15.4 58%

19 25 17.5 72%

OVERALL 15 3,865 13.9 69%

• On average, students in the FTFT Freshman cohort take 15 credit hours and complete just under 14.

• Over 30% of all students complete fewer credit hours than they undertake

• Students who take fewer than 15 credit hours, complete a lower proportion of their initial credit hours than do those who take 15 or more credit hours

Office of the President

STUDENT SUCCESS IS EVERYONE’S AGENDA

• Responsibility to help students succeed

• Implications:– Cost to students, taxpayers, and university– Funding tied to successful credit hour completion– Graduation delayed—funding impact

• 70% of the FTFT cohort with 12 to 18 credit hours do not succeed in completing their load

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Office of the President

WHY STUDENTS DO NOT PROGRESS• University policies encouraging contrary

behavior

• Unstructured curriculum

• Students are unprepared – the Millennial Generation

• Faculty culture

• Delivery system31

Office of the President

FACULTY’S CHANGING ROLE• New normal: faculty

composition– Growth of non-tenure

track positions from ‘99 to ’09: 46%

– Percentage of tenured faculty at public research institution in ‘09: 23% (NAU still at 49%)

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• Student success as institutional value reflected in hiring, promoting, rewarding

• Tenured/tenure-track faculty focus on higher order analytical and interpretative presentation, work closely with students

• Lecturers with strong teaching background, staff, and coaches complement work of tenured/tenure-track faculty

• Commitment to augment the new student generation learning style/ Millennial generation

Tenured

44363%

Tenure Track12918%

Lectur-ers/ In-

struc-tors13619%

Fall 2002

N=708; FTE Students per Faculty = 24:1

Tenured

40749%

Tenure Track11814%

Lec-turers / In-

struc-tors 31137%

Fall 2010 N=836; FTE Students per Faculty = 27:1

Office of the President

TECHNOLOGY TO CHANGE THE SYSTEM• Higher ed. is where IT was 10 years ago

• NAU always an early adopter of technology

• More effective course delivery: focused, 5-week formats, more interactive, one-on-one with faculty augments web, rich content

• Tools to use faculty time effectively and efficiently• Open courseware—Berkeley, MIT, Carnegie-Melon• NBC Learn• McGraw Hill• Pearson Soultions…• iPod/ smart phone apps

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Office of the President

SYSTEMATIC AND COMPREHENSIVE REFORM OF FRESHMAN LEARNING• Coaches

• Instructional innovation

• University policies– Financial aid-related policies and their impact/

administrative drop– Freshman mandatory attendance

+

University College

• Dedicated group of faculty– Reward and compensations structure

• Standardized, multi-section courses

• More structure to the freshman year

Office of the President

STUDENT SUCCESS IN MATHEMATICS• Math Emporium (technology + redesigned courses +

faculty): Students

– spend the bulk of their course time working on specific competency skill deficiencies,

– spend more time on things they don't understand and less time on things they have already mastered,

– get assistance when they encounter problems, – and are required to participate in scheduled learning

activities and assessments.

• Standardized courses

• Self-paced modules—five-week segments

• Selected faculty on multi-year contracts 35

Office of the President

NEXT STEPS

• Robert Zemsky on September 27

• Discussions with colleges and faculty

• Develop implementation plans– Broad scale of curricular

improvements36

Office of the President

Questions?

Thank you.

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