Session G. Global Session G. Global Financial Crisis – What Financial Crisis – What Does This Mean for Does This Mean for Higher EducationHigher Education

If The Past Is PrologueIf The Past Is PrologueThe American StoryThe American Story

WELLINGTON GROUP FORUM2008

December 4, 2008Sydney, Australia

David Longanecker,President

Western Interstate Commission for

Higher Education (WICHE)

The American Response to Good Times and The American Response to Good Times and BadBad

Public FTE Enrollment, Educational Appropriations and Total Educational Revenue per FTE,

United States -- Fiscal 1982-2007

$6,4

51

$6,3

00

$6,3

38

$7,0

69

$7,4

24

$7,5

57

$7,5

53

$7,4

41

$7,3

97

$7,1

91

$6,7

81

$6,5

34

$6,6

12

$6,8

32

$6,9

11

$7,1

36

$7,3

47

$7,5

27

$7,5

95

$7,5

81

$7,3

41

$6,7

59

$6,3

13

$6,2

04

$6,5

20

$6,7

73

$1,8

26

$1,9

32

$2,0

55

$2,1

49

$2,2

40

$2,3

01

$2,3

64

$2,4

11

$2,4

66

$2,5

45

$2,7

45

$2,9

14

$3,0

12

$3,0

93

$3,2

01

$3,2

32

$3,2

44

$3,2

41

$3,1

54

$3,1

46

$3,1

54

$3,2

13

$3,3

73

$3,5

61

$3,7

56

$3,8

45

0.0

2.0

4.0

6.0

8.0

10.0

12.0

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Pu

blic

FT

E E

nro

llmen

t

(Mill

ion

s)

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

Do

llars

per

FT

E

Educational Appropriations per FTE (constant $) Net Tuition Revenue per FTE (constant $) Public FTE EnrollmentNote: Constant 2007 dollars adjusted by SHEEO Higher Education Cost Adjustment. (HECA) Source: SHEEO SHEF

Educational Appropriations per FTEEducational Appropriations per FTEPercent Change by State, Fiscal 2002-2007Percent Change by State, Fiscal 2002-2007

Figure 6

Educational Appropriations per FTE Percent Change by State, Fiscal 2002-2007

-7.7%

-26.1%

28.6%

-30%

-20%

-10%

0%

10%

20%

30%

40%

Note: Dollars adjusted by 2007 HECA, Cost of Living Adjustment, and Enrollment Mix; Educational Appropriations Source: SHEEO SHEF

Total Education Revenue per FTETotal Education Revenue per FTEPercent Change by State, Fiscal 2002-2007Percent Change by State, Fiscal 2002-2007

Figure 8

Total Educational Revenue per FTEPercent Change by State, Fiscal 2002-2007

1.2%

-9.7%

36.9%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

Illino

is

Florid

a

Penns

ylvan

ia

New H

amps

hire

New Je

rsey

Idah

o

Color

ado

Kansa

s

Califo

rnia

Minn

esot

a

South

Dak

ota

Georg

ia

Mich

igan

North

Car

olina

Orego

n

Conne

cticu

t

Wes

t Virg

inia

Mar

yland

Main

e

Wisc

onsin Ohio US

Miss

ouri

Miss

issipp

i

Verm

ont

Texas

Rhode

Islan

d

Mas

sach

uset

ts

Delaw

are

Was

hingt

onIo

wa

Virgini

a

New Y

ork

North

Dak

ota

Arizon

a

Nebra

ska

Kentu

cky

Nevad

a

Mon

tana

Utah

Arkan

sas

Alaska

Hawaii

Tenne

ssee

Louis

iana

India

na

New M

exico

Wyo

ming

South

Car

olina

Oklaho

ma

Alabam

a

Note: Dollars adjusted by 2007 HECA, Cost of Living Adjustment, and Enrollment Mix; Total Educational Revenues Source: SHEEO

SHEF

Source: SHEEO SHEF

State & Local Public Higher Education Support per Full State & Local Public Higher Education Support per Full Time Student (NCHEMS/SHEEO)Time Student (NCHEMS/SHEEO)

Performance Relative to Total Funding per FTE –Performance Relative to Total Funding per FTE –Overall Index Scores for State Higher Education Overall Index Scores for State Higher Education Systems (NCHEMS)Systems (NCHEMS)

136.3 127.7

122.7

106.9

104.3

103.2

101.5

100.9

100.0

99.5

96.8

96.3 92.2

91.7

91.2

90.9

90.7

89.3

88.7

85.5

85.2

85.0

84.8

83.9

83.2

82.2

80.5

78.5

78.3

76.0

75.4

74.9 71.7

71.6

71.0

70.3

69.8

69.5

68.1

67.0 63.3

63.2

60.3

60.2 53.3

51.9 48.3

88.4

76.8

74.3

0

30

60

90

120

Utah

Massachusetts

Colorado

Rhode Island

Iowa

North D

akotaA

rizonaW

isconsinM

arylandN

ew H

ampshire

Washington

Virginia

Nebraska

IllinoisK

ansasC

aliforniaD

elaware

Missouri

Minnesota

South D

akotaN

orth Carolina

Connecticut

Montana

New

York

Florida

Pennsylvania

IndianaM

ichiganA

labama

Ohio

Oregon

Oklahom

aN

ew M

exicoT

ennesseeT

exasH

awaii

Mississippi

Wyom

ingIdahoG

eorgiaN

ew Jersey

LouisianaS

outh Carolina

Nevada

Verm

ontW

est Virginia

Arkansas

Maine

Kentucky

Alaska

The Federal Financial Aid PieceThe Federal Financial Aid Piece

Perception of Shift from Grants to Loans Not True Grants are up: Pell from $2,150 in ‘93 to

$4,750 today Loan volumes are up much more

92 and 98 Amendments That will moderate

Tax Benefits Are The Big Area of Growth

Net/Net: Feds disproportionately increasing aid to middle-income

Neither Are The States moving Neither Are The States moving away from equity to meritaway from equity to merit

The States Five Year % Change

Non-need based Aid: 67% Need based Aid: 43%

Five Year $ Change Non-need based Aid: $850 million Need based Aid: $1.65 billion

Total Amount in 2006-07 Non-need based Aid: $2.1 billion Need based Aid: $5.5 billion

The Bottom LineThe Bottom Line

Higher Ed Is The Balancing Wheel

But this wheel steers in only one direction – higher costs/borne by students