ACTA is an independent, non-profit organization committed to academic freedom, excellence, and accountability at America's colleges and universities.

ACTA is an independent, non-profit organization committed to academic freedom, excellence, and accountability at America's colleges and universities.

ACTA is an independent, non-profit organization committed to academic freedom, excellence, and accountability at America's colleges and universities.

Bold Leadership, Real Reform Executive Summary

February 2015

American higher education has for many years prided itself on being the envy of the world, but it is in danger of losing that hard-earned status. After decades of tuition increases far outpacing inflation, the cost of a college education is higher than ever. Six years after the Great Recession, state funding for higher education remains low.1 Colleges and universities across the country are seeing their bond ratings drop and their budgets shrink. Employers complain that college graduates are not prepared for the workplace, and many students find themselves saddled with considerable debt and no job to show for it. These are trying times for parents, for students, and for institutions.

Given these trends, it’s no wonder that the past few years have seen an upsurge in talk about higher education reform. Governors, state legislators, and even the President of the United States2 have begun to speak seriously about higher education policy, often adding sharp criticism. They are impatient for change.

As a college or university trustee, you bear fiduciary responsibility for your school. But merely managing your institution will no longer be enough. It is essential that you pursue bold, innovative strategies for promoting academic excellence while holding down costs. The future of American higher education depends on it.

The American Council of Trustees and Alumni (ACTA) is here to help. In this guide, we lay out 12 best practices for effective, reform-minded university governance. We present examples of colleges and universities that have adopted these policies, providing further guidance on how these practices can best be implemented. With this guide in hand, you will have the knowledge and tools to make your school a stronger institution.

DOING MORE WITH LESS:
Implementing Cost-Saving, Quality-Enhancing Reforms

LARGE-SCALE CHANGE in higher education is not only possible, it has happened, though unfortunately not often enough. With the help of engaged and active boards, the past decade saw two large public university systems successfully implement a variety of cost-saving, quality-enhancing reforms. They are proof that, as difficult as effecting change may be, it can be done. Before exploring the practices and reforms you can implement at your institutions, we begin by telling you their stories.

University System of Maryland
At the turn of the 21st century, the University System of Maryland (USM) was in trouble. For the last decade, state funding for the system had swung up and down depending on who controlled the governor’s office and legislature, and the overall funding trajectory was downward. Tuition was rising, budgets were tight, and few had faith in the system’s leaders.

The USM was buffeted by criticism on all sides. Students, the public, and lawmakers were all taking aim at the system’s image of wastefulness and profligacy with money. In the words of regent Cliff Kendall, “Everybody was criticizing the system for having too many administrators, the faculty wasn’t working hard enough, and on and on.” But instead of brushing off complaints and assuming a defensive posture, the Board of Regents took the critiques seriously. In Kendall’s words, “Every suggestion for improvement, every criticism, we recorded and brought back.” The USM was being accused of having too many overpaid administrators, so the board investigated administrative salaries and the administrator to student ratio. Some said professors were not teaching enough, so the board looked into teaching loads. Charges of wastefulness led to studies of use of campus facilities.
These investigations helped the board form an action plan. While the board found the administrator to student ratio was acceptable, it also focused on areas that needed improvement. The board found underused facilities, extensive delays in completing four-year degree requirements, and faculty teaching loads that were far too low for a cost-effective public university system.3

System chancellor Brit Kirwan and the Board of Regents got to work. In response to these challenges, the board launched the Effectiveness and Efficiency (E&E) Initiative. Its purpose was to “optimize [system] resources to yield savings and cost avoidance.”4 The regents worked hard to bring campus leadership and faculty on board. They used online tools to help students pick the right courses to decrease time to degree completion, found ways to use classroom and dorm space more efficiently, and increased teaching loads by 10% across the system’s research universities.5
Progress was regularly measured in reports submitted in response to the Maryland General Assembly’s annual Joint Chairmen’s Report.6 E&E Initiative Reports focused on detailing what initiatives had been launched; predictions and targets; assessments of success in meeting stated goals; and plans for the future. The reports articulated goals for increased faculty teaching loads, and actual loads were compared against explicit benchmarks. The reports included relevant financial analyses.7 On the tenth anniversary of the initiative’s launch, the system issued a comprehensive report assessing the system as a whole, breaking it into units and categories and analyzing its success to date.8

In addition, the Board of Regents received regular information about the progress and plans of the E&E Initiative. The board took an active role in monitoring its progress and providing support.9 The E&E Initiative helped rebuild trust between the USM, the state government, and the taxpayers by demonstrating that the Board of Regents was taking steps to spend precious funds wisely and efficiently. The USM has removed over $130 million in direct costs from its budget; in-state tuition held flat from 2006 through 2009; faculty classroom contact at undergraduate research universities increased by 20%; time-to-degree reached historic best levels (averaging under 4.5 years); and thousands of students were absorbed despite the absence of additional funding for enrollment growth.10

State University System of Florida
In the aftermath of the 2008 recession, the State University System of Florida (SUSF) also faced a crisis. There were huge cutbacks in state funding and the system had major budgetary challenges. Between 2007 and 2012, state funding for the SUSF fell from $2.6 billion to $1.7 billion. Educational appropriations per full-time-equivalent student in two- and four-year colleges for FY 2012 were well below the national average.

Against this backdrop, the SUSF managed to thrive in the face of the budget crunch. The chancellor of the SUSF at that time was former lieutenant governor Frank Brogan. Chancellor Brogan was adamant about the system’s responsibilities: "During this time of fiscal constraint, we must continue to maximize the effective and efficient use of our resources and work with our partners in the Legislature to achieve the proper balance of revenue derived from appropriation and from tuition. We must also remain keenly aware that the economic pressures our students face are as real as the economic challenges our universities and the Legislature are experiencing."

Despite modest increases, tuition was kept low: the flagship University of Florida still had the lowest tuition among public universities who are members of the prestigious Association of American Universities. Total student enrollment rose 11.2% between 2007 and 2012. During these hard times, graduation rates of first-time-in-college students at the same university improved 4% from the 2007 to 2012 cohorts, and retention rates at the same university for first-time-in-college students rose to 88%.11

How did the SUSF manage to improve quality and control costs despite massive reductions in funding? The system board focused on value and efficiency by eliminating 80 undergraduate programs and suspending 94 others between 2007 and 2012; 96 graduate programs were terminated. These cuts weren’t made carelessly, but were part of a wider effort to concentrate on promising programs that played to the system’s strengths. In fact, 93 new undergraduate and 109 new graduate programs were added during the same period. The SUSF also managed to limit administrative spending, decreasing such expenditures by 8% since 2008, while increasing expenditures on instruction and research. System schools took steps to improve building utilization and effectively deploy distance learning.12

The policies undertaken in Maryland and Florida were spearheaded by active system boards and chancellors as well as engaged boards of trustees at individual institutions. They model what trustees can accomplish when they get the data they need and proactively reform their universities. With these examples in mind, we turn to the best practices that can help your institution better serve students, parents, and taxpayers.

End Notes

  1. Sandy Baum and Jennifer Ma, Trends in College Pricing 2014, Trends in Higher Education Series (The College Board, 2014), 27-28
  2. Megan Slack, “President Obama Explains His Plan to Combat Rising College Costs,” The White House Blog, August 22, 2013.
  3. Jon Marcus, “How Maryland Universities Were Able to Cut Costs and Keep Tuitions Down,” Hechinger Report, April 11, 2010.
  4. Effectiveness and Efficiency Initiative: Index,” University System of Maryland, accessed October 14, 2014.
  5. Changes in teaching load requirements were differentiated across different types institutions. See discussion in Marcus, “How Maryland Universities Were Able to Cut Costs and Keep Tuitions Down.”
  6. The Joint Chairmen’s Report is prepared annually by the State Senate Budget and Taxation Committee and the State House Appropriations Committee.
  7. See “Effectiveness and Efficiency Reports,” University System of Maryland, accessed October 14, 2014.
  8. Tenth Anniversary Report on the University System of Maryland Effectiveness and Efficiency Initiatives (University System of Maryland, 2013).
  9. See “Board of Regents Minutes,” University System of Maryland, accessed October 14, 2014.
  10. “Effectiveness and Efficiency Initiative: Index.”
  11. “A Great Value,” University of Florida, accessed January 6, 2015, http:// http://www.admissions.ufl.edu/value.html; Office of the Vice Chancellor for Academic and Student Affairs, SUSF, e-mail message to Michael Poliakoff, January 7, 2015; American Council of Trustees and Alumni, Florida Rising: An Assessment of Public Universities in the Sunshine State (Washington, DC: American Council of Trustees and Alumni, 2013).
  12. Office of the Vice Chancellor for Academic and Student Affairs, SUSF, e-mail message to Michael Poliakoff, December 23, 2014; ACTA, Florida Rising, 3.