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Higher Education in the New Economy

August 17, 2011

As state and federal funding for higher education dwindles and the workforce needs of the new economy continue to shift, state and university officials are reevaluating how higher education is funded, its return on investment for the state, and how universities can better drive economic growth. Recent examples in New York, Ohio and Texas demonstrate how states are implementing new policies to adapt to the changing times.

New York
Gov. Andrew Cuomo recently signed into law the NYSUNY 2020 legislation, an initiative the governor says will both help New York's public universities become a leading catalyst for regionally-focused economic development and stabilize tuition. The new law allows the four university centers located in Albany, Binghamton, Buffalo, and Stony Brook to apply for challenge grants of $35 million each to expand facilities and enhance research-focused programs. A total $140 million is available through the program, including $80 million in capital funding authorized under the new law and $60 million in existing SUNY funds.

Details recently emerged on the proposals submitted by the four centers. The University of Albany wants to build a Biomedical and Information Innovation Research Plaza and hire additional faculty while Binghamton plans to construct a Health and Natural Sciences facility for healthcare innovations and provide space for startup companies. Meanwhile, Stony Brook wants to use the money to jumpstart construction of a translational medical research center and the University of Buffalo would use the money to implement the next phase of its UB2020 plan, a long-term strategic plan focused on enhancing research.

The law also enacts a tuition plan allowing each SUNY and CUNY campus to raise tuition by $300 per year for five years. The four research-focused institutions can implement an additional three percent increase upon approval of their challenge grant applications. Plans will be reviewed by the SUNY chancellor and recommended to the Empire State Development Corporation board for final approval, which is expected by the end of the year.

A plan introduced by Ohio Board of Regents Chancellor Jim Petro would enable the state's colleges and universities to operate more like corporations by removing several state regulations in return for taking a smaller share of state funding and meeting certain benchmarks such as graduating students sooner and increasing the percentage of degrees awarded in science, technology, engineering and mathematics (STEM) fields. The Enterprise University Plan, which recognizes universities as drivers of economic development for the state, allows universities to be free from mandates thus helping to increase efficiency, effectiveness and competiveness, said Chancellor Petro.

There are two parts to the plan, each requiring legislative approval. Phase one reduces mandates and regulations, including eliminating statutory enrollment limits for public universities, eliminating the requirement that the controlling board must approve funds for the purchase of real property, and allowing universities to differentiate the cost of tuition based on size and facility reasons.

The second phase provides a framework for the universities to receive greater autonomy from the state through further reductions of mandates by meeting certain benchmarks to earn Enterprise University status. This includes investing a portion of state aid into scholarships or other initiatives and accepting less state funding. Once a university gains this status, they will be eligible to advance to International Enterprise University status. Benchmarks to achieve this include unallocated net assets of 30 percent of total operating expenses, a five-year graduation rate of 75 percent, research expenditures of $250 million or more, STEM degree percentage of 20 percent, and direct articulation partnership with community colleges, among others.

The plan is available at: http://www.ohiohighered.org/sites/default/files/uploads/enterprise-university-plan/Enterprise-Universities-Plan-WEB.pdf.

Lawmakers passed a bill earlier this year requiring students to file a degree plan with institutions of higher education no later than the end of the second regular semester or term detailing how and when they intend to achieve their degree. The idea is to graduate students earlier, especially those receiving full tuition scholarships who may linger longer than needed to complete a degree. A recent article in Stateline reports that fewer than half of Texas students graduate from four-year colleges in six years or less and the state can pay up to $6,800 for each student who takes extra credit hours. The bill, which also requires students to obtain permission if they deviate from their plan, was signed into law by Gov. Rick Perry in June.

New York, Ohio, Texashigher ed, bio, stem, workforce