A New Model for Higher Education
A shifting landscape
A lot has changed at Missouri State University, but the state’s higher education models have not adapted to accommodate the shifting landscape. Missouri State’s enrollment has significantly increased and the percentage of the state’s budget spent on higher education has decreased. The result is that Missouri State’s budget has gone from being funded mostly by state appropriations to now being funded mostly with tuition and fees.
The old model
Public universities have two sources of revenue: tuition and state appropriations. The old funding model focused on these two items.
This model proved very successful in keeping down gross tuition and fees. While most universities throughout the country have drastically increased tuition rates, Missouri’s public universities have not.
At Missouri State, tuition and fees in fiscal year 2017 were 27 percent below average for public universities throughout the country.
Missouri State is the fifth least expensive public university in the state. The university has excelled in keeping gross tuition and fees low.
|U of Missouri – St. Louis||$10,275|
|Missouri U of Science and Technology||$9,831|
|U of Missouri – Columbia||$9,787|
|U of Missouri – Kansas City||$9,763|
|Northwest Missouri State U||$9,572|
|Truman State U||$7,656|
|U of Central Missouri||$7,520|
|Missouri State U||$7,306|
|Southeast Missouri State U||$7,185|
|Missouri Western State U||$6,843|
|Harris-Stowe State U||$6,090|
|Missouri Southern State U||$6,067|
The old model did not keep state appropriations on track with enrollment trends and the increased costs of doing business.
This is especially true at Missouri State. During the last decade Missouri State’s operating appropriation has decreased by millions of dollars, even without accounting for inflation. At the same time, enrollment at Missouri State has increased by more than 20 percent and operating costs have risen significantly.
This has resulted in a significant decrease in appropriations per student. Missouri State now receives the lowest appropriation per student of any public university in the state. The university receives thousands less per student than many of its peers.
|Institution name||Appropriations per FTE 2016-17|
|Harris-Stowe State U||$8,311|
|Truman State U||$8,117|
|U of Missouri System||$7,765|
|Northwest Missouri State U||$6,037|
|Missouri Western State U||$5,855|
|U of Central Missouri||$5,670|
|Southeast Missouri State U||$5,376|
|Missouri Southern State U||$5,198|
|Missouri State U||$4,672|
Missouri State has significantly less revenue per student than most other universities in the country. This has impacted Missouri State in several critical ways.
|State||Funding per public FTE student||2016-17 in-state tuition and fees||Total|
Efficiency at a cost
In July 2017, the American Council of Trustees and Alumni (ACTA) issued a guide for higher education trustees on controlling administrative costs. ACTA analyzed data compiled through the federal government’s Integrated Post-Secondary Education Data Systems (IPEDS). ACTA determined that the median administrative cost ratio for universities like Missouri State is 0.21. Missouri State’s administrative cost ratio is 0.17. This makes Missouri State the 12th lowest in the cohort of 52 universities.
This demonstrates that Missouri State University has become a state and national leader in efficiency.
Limited resources have driven Missouri State to find cost savings and creative revenue. Some examples include collaborative programs, aggressive procurement, renegotiated contracts and reallocation of resources.
Missouri State takes steps to become leaner and more effective each year. The university takes pride in its track record for efficiency; however, these efficiencies have come with a cost.
|University of Wisconsin-Oshkosh||0.12|
|University of Central Oklahoma||0.12|
|University of Wisconsin-LaCrosse||0.13|
|University of Minnesota-Deluth||0.14|
|The University of Tennessee-Chatanooga||0.14|
|California State University-Long Beach||0.15|
|Appalachian State University||0.15|
|James Madison University||0.15|
|University of Wisconsin-Whitewater||0.16|
|San Jose State University||0.16|
|California State Polytechnic University-Pomona||0.16|
|Missouri State University||0.17|
|Western Washington University||0.17|
|Southeastern Louisiana University||0.17|
|California State University-Northridge||0.18|
|Grand Valley State University||0.18|
|Minnesota State University-Mankato||0.18|
|University of North Carolina Wilmington||.019|
|Southern Illinois University-Edwardsville||0.19|
|Eastern Washington University||0.20|
|West Chester University of Pennsylvania||0.20|
|Southeast Missouri State University||0.20|
|California State University-Chico||0.20|
|California Polytechnic State University-San Luis Obispo||0.20|
|University of Alaska Anchorage||0.21|
|University of North Florida||0.21|
|California State University-Sacramento||0.22|
|California State University-Los Angeles||0.23|
|CUNY City College||0.23|
|Central Washington University||0.24|
|CUNY Bernard M Baruch College||0.24|
|California State University-East Bay||0.24|
|California State University-Dominguez Hills||0.25|
|CUNY Hunter College||0.25|
|College of Staten Island CUNY||0.25|
|Weber State University||0.25|
|Saint Cloud State University||0.26|
|CUNY John Jay College of Criminal Justice||0.27|
|Eastern Kentucky University||0.28|
|Youngstown State University||0.28|
|Northern Kentucky University||0.28|
|Florida Gulf Coast University||0.29|
|Stephen F Austin State University||0.30|
|California State University-San Bernardino||0.31|
|CUNY Brooklyn College||0.31|
|Western Kentucky University||0.31|
|CUNY Queens College||0.31|
|College of Charleston||0.32|
|University of Maryland-University College||0.51|
Missouri State’s student-to-faculty ratio has increased to 22:1. Peer institutions average 17:1 with a range of 15:1 to 19:1.
The university is losing talented employees because compensation at Missouri State lags behind its peers.
We’ve created new programs and expanded existing programs to meet workforce needs in the community, state and region. But Missouri State lacks the resources to add and expand many more in-demand programs.
Deferred maintenance, infrastructure and other obligations continue to increase. Without new revenue, funding for these obligations must come from mission critical academic operations and student services.
The new model
Higher education institutions must adapt to thrive in the shifting landscape. Missouri State is developing a contemporary financial platform to sustain its growth. The old model focused on two financial components: tuition and state appropriations. The new model will focus on the following four dynamic components.
Missouri State has staked its position as a leader in efficiency. However, as operating expenses continue to increase, Missouri State’s efforts to become more efficient must continue.
Each year the university will evaluate its staffing structure, contracts and procurements, and other processes and protocols. We will continue to eliminate and streamline operations with a goal of reallocating resources from one area of the university to another. This will be challenging, but it must be done to sustain growth in the current landscape.
Affordability must remain a priority at Missouri State. With declining revenue per student, the university must look at affordability through a different lens. Historically, affordability has been analyzed by looking only at gross tuition and fees that students are required to pay. Under the new model Missouri State must continue to evaluate tuition and fees. But we will also evaluate other affordability strategies that impact the net financial impact on students, such as:
- Expanding dual credit opportunities
- Developing more accelerated programs
- Reducing the minimum number of credit hours for graduation
- Reducing the number of students who take developmental classes
- Expanding open access textbooks
- Streamlining students’ schedules to reduce “unnecessary” courses being taken
- Facilitating course transfer
- Realigning scholarship and aid programs to mitigate the impact of tuition and fee increases
- Reducing student debt and default on student loans
Universities have historically focused on increasing revenue by raising tuition and fees and seeking state appropriations. These remain important pieces of the financial picture, but Missouri State must diversify its portfolio by developing additional revenue through creative opportunities. Such opportunities include:
- Enrollment growth by expanding high-demand programs and adding programs based on workforce demand
- Increasing retention and graduation rates to sustain revenue for multiple years
- Increasing private giving and grant funding
Missouri State intends to make substantial progress through asset reallocation and creative revenue. However, these strategies will not sufficiently offset new expenses nor decrease the rising student to faculty ratio. They will not improve lagging compensation or address other business needs previously outlined.
To develop the necessary revenue, Missouri State must also evaluate its tuition and fee policies and advocate for additional state investment.
Missouri State has already begun to evaluate differential tuition and fee options. Several options we are considering would increase tuition above CPI for the first time in a decade.
As part of this evaluation, it has become clear that further cuts in appropriations to Missouri State will require substantial tuition and fee increases. Likewise, appropriation increases will reduce the anticipated increases in tuition and fees.
The higher education paradigm is evolving nationwide. Through these outlined strategies, Missouri State will chart a course to thrive in the changing landscape and continue on its trend for growth.