Tuition & Aid Advisory BoardTuition & Aid Advisory Board

A Discussion of UCB Priorities and Funding Strategies

September 27, 2004

University of Colorado at Boulder

UCB PrioritiesUCB Priorities

Enhance quality

Avoid budget cuts in FY06 (COF value + Fee for Service > FY05 appropriation)

Gain approval for tuition rate increases sufficient to meet expense needs over multi-year planning horizon

– Cover fixed cost increases

– Provide funds to remain competitive w/in AAU

Define substance of enterprise status

University of Colorado at Boulder

Investment StrategyInvestment Strategy

Maintain outstanding faculty– Competitive salaries and benefits

– Start-up and matching funds

– Selective allocation of faculty lines

– PhD support and enrollment growth

– Encourage innovative instruction and interdisciplinary research

University of Colorado at Boulder

Investment StrategyInvestment Strategy

Attract improved student quality– Greater selectivity and diversity in

admissions

– Increase financial aid/scholarships

– Offer small group learning experiences and increased research opportunities for undergraduates

– Improve tenure-track faculty to student ratio

University of Colorado at Boulder

Investment StrategyInvestment Strategy

Provide necessary infrastructure– Develop and renovate instructional,

research and support facilities

– Enhance student support services

– Promote staff development

– Upgrade and improve business systems and operations

University of Colorado at Boulder

STATE SUPPORT FOR HIGHER ED

10.5%

13.7%14.1%14.6%14.9%

17.8%

15.3%

20.3%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

FY 1990 FY 1992 FY 1994 FY 1996 FY 1998 FY 2000 FY 2002 FY 2004

University of Colorado at Boulder

State Effort, FY04State Higher Ed Appropriation per $1000 Personal Income

State Effort, FY04State Higher Ed Appropriation per $1000 Personal Income

$0

$4

$8

$12

$16

Colorado$3.96

US Average$6.80

Source: PostSecondary Education Opportunity, Jan 2004

University of Colorado at Boulder

CU-Boulder Tuition & Fees

vs. AAU Publics & Colorado Privates FY04

CU-Boulder Tuition & Fees

vs. AAU Publics & Colorado Privates FY04

$0

$10,000

$20,000

$30,000

Colorado privates (CC, Regis, DU)

CU-Boulder

University of Colorado at Boulder

UCB Affordability UCB Affordability

-$2,500

-$1,500

-$500

$500

$1,500

$2,500

$3,500

91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03

CU Boulder Resident Tuition & Fees Dollars Below AAU Average

Colorado Per Capita Personal Income - Dollars Above US Average

Source: Per Capita Personal Income Bureau of Economic Analysis, UG Resident Tuition AAU Data Exchange

2002 CO Per Capita

Income $33,170

1991 CO Per Capita Income $20,369

UG

GR

AY 2003 UG $3,556

AY 2003 GR $4,489

University of Colorado at BoulderState Tax Support & Tuition

Per Resident Student FTE

$8,879

below average

University of Colorado at Boulder

AAU Publics -- Annual Revenue per Student FTE, FY2002 ('000)

5

10

15

20

25

30

35

Annual giving at 65%

Endowment stream at 4%

Tuition and fees (total)

State appropriation

Line at $17,800, average for the 14 institutions with no medical schools without CU-Boulder. CU-Boulder at $12,380.

University of Colorado at Boulder

SB-189 New Funding ModelSB-189 New Funding Model

College Opportunity Fund– Provides UG per credit hour grant for residents up to

145 hours ($80/hr est.)

– 50% grant for Pell-eligible students at certain Colorado private institutions

– Replaces current direct state tax appropriation to institutions

Allows enterprise status for qualifying institutions– Removes revenues from state TABOR limits

– Authorizes revenue bonding authority for academic facilities

University of Colorado at Boulder

SB-189 New Funding ModelSB-189 New Funding Model

Performance Contracts– May replace Quality Indicator System

accountability reporting to CCHE– May provide opportunity for increased

management flexibility

Fee for Service– Contract for services beyond UG COF grant– Provides funding for graduate/professional

education

University of Colorado at Boulder

The Cost of a Quality Education

The Cost of a Quality Education

Non-Resident:Cost

$17,800Tuition -$20,592Net /Over $ 2,792

Resident:Cost $17,800COF -$ 2,400NRes Cr. -$ 1,396Endw/Gft. -$ 2,628Tuition -$ 3,480Net /Under ($ 7,896)

University of Colorado at Boulder

Bridging the Resource GapBridging the Resource Gap

To address the shortfall in funding resident education:

– Endowment income and annual gifts will need to double,

– Entrepreneurial revenues will need to increase, and;

– Resident tuition rates may need to address remaining shortfalls

– To do this will require a multi-year implementation strategy

University of Colorado at Boulder

A Proposed Tuition PlanA Proposed Tuition PlanEstablish UG resident base tuition increases over six year planning horizon

Utilize “fixed tuition” plan to minimize impacts to students

– One-time increase per cohort – then tuition fixed for five years

– One-time increase would approximate total of normal annual increases

Utilize financial aid to ensure accessibility and student quality

University of Colorado at Boulder

Moving Toward a New EconomyMoving Toward a New Economy

Establish fund-raising targets by Schools/Colleges and CUF

Establish a tuition and fee advisory board to evaluate market tuition and financial aid goals

Expand other revenue opportunities, such as executive education, summer school, technology transfer, real estate, and investment income

University of Colorado at Boulder

Summary Summary

A world renowned institution with a significant role in Colorado’s future

Long known for efficiency, but precariously maintaining competitiveness

With the right financial model and legislative support, UCB can sustain its excellence, and enhance Colorado’s economic future and quality of life