2018-2024 Six-Year Academic, Financial, and Enrollment PlanAugust 22, 2017

Timothy D. Sands, PresidentThanassis Rikakis, Executive Vice President and ProvostM. Dwight Shelton, Jr., Vice President for Finance and CFO

Advancing Virginia Tech

As a Global Land-Grant Institution

Timothy D. SandsPresident

Strategic Planning at VT

Beyond Boundaries: A 2047 Vision Propel VT as a Top 100 global land-grant

institution

Strategically address the challenges and opportunities presented by the changing landscape of higher education

Initial work has identified several key concepts that shape the future of the institution

Beyond Boundaries

Actions Underway

Growing Enrollment – scaling to address demand and provide resources to support student access and affordability and accelerate research activity.

InclusiveVT - accelerating efforts to make VA Tech accessible to best and brightest students and faculty and to further reflect diversity.

Beyond Boundaries Scholars – reducing barriers to enrollment by underrepresented and high-achieving students.

Business Engagement Center –forging deeper relationships with external partners, explore diversified funding models, and develop agile frameworks for interaction.

Enrollment Growth Average comprehensive public land-grant research peer

enrolls 34,000 undergraduates Of those peers, the top three in US News & World Report

rankings enroll about 30,000 each

Virginia Tech will enroll approximately 27,000undergraduates in Fall 2017 72% of undergraduates are Virginian

Number of Virginia high school graduates is expected to grow by just 3.6% through 2022 VT enrollment growth may require looking outside state

We are experiencing a significant increase in demand, and undergraduate applications reached a new high for Fall 2017 admission.

Demand is broad-based and includes several areas where Virginia Tech is in a unique position to provide additional access to qualified students.

Growing Demand for a Virginia Tech Education

14,000

16,000

18,000

20,000

22,000

24,000

26,000

28,000

Applications to Virginia Tech

27,226

15,883

Enrollment Growth Growing undergraduates enrollment will allow Virginia Tech to

support the evolving funding model for higher education

Provide resources: In an environment of constrained tuition and General Fund resources, scale can support growing costs.

Expanding Access/Affordability: Additional enrollment allows for scaling of costs, reduced pressure on tuition increases, and generates net revenue to enhance financial aid and pathway programs for Virginia undergraduates

Growing Research Activity: Additional faculty lead to increased research activities, resulting in economic activity for Virginia

Challenge: To maintain/grow Virginia undergraduate enrollment while growing research and addressing affordability, additional nonresident enrollment flexibility may be needed.

Update and Success of 2016 Plan

M. Dwight Shelton, Jr. Vice President for Finance and CFO

Current Environment The university’s financial position is impacted

significantly by four major categories: Enrollment (tuition revenue) State Support (General Fund Per Student) Research Success Philanthropy Cost Containment and Administrative Efficiency

Current indicators are positive in many of these categories, and signal continued progress.

Total EnrollmentIn 2015-16 Virginia Tech enrolled over 33,000 total students; more FTE students than any other public four-year institution in the Commonwealth.

Source: SCHEV

1,655

1,936

4,234

4,852

5,091

4,583

4,609

8,446

9,487

20,820

20,324

24,260

28,260

28,456

33,223

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000

UVA - W

VMI

UMW

LU

CNU

VSU

NSU

CWM

RU

JMU

ODU

UVA

GMU

VCU

VT

Undergraduate Students Graduate and First Professional Students

Educating VirginiansSince Fall 2004, the university has:

Increased Virginia undergraduate enrollment by more than 3,400 Increased Virginia freshman seats by almost 800 Increased VCCS transfer students by 110%

Growth in enrollment results in more degrees awarded. 5,079

6,215

1,807

1,973

Bachelors

Graduate

Degrees Awarded

Virginia Tech is the leading STEM-H institution in the Commonwealth. Graduated 4,391 students in STEM-H fields in 2015-16 Produced 25% of state’s 4-year public institution total; more than

any other institution in Virginia.

STEM-H Graduates

Together, tuition and General Fund per student combine to generate less purchasing power per student than in 2000-01.

Resources Per Student

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

State Funding and Tuition ChargesIn-State Undergraduate, Inflation Adjusted to 2000 (HEPI)

GF/FTE (Real FY2000 $s) In-State UG Tuition (Real FY2000 $s)

Growth in Research ExpendituresThe academic program is bolstered by a vibrant research environment, which drives knowledge to the classroom, and helps attract faculty.

Virginia Tech is the Commonwealth’s largest research institution.

28 patents and 46 licensed agreements in FY2016

$1.8 million in intellectual property licensing in FY2016

$269

$504

$0

$100

$200

$300

$400

$500

$600

2004 2015

Research Expenditures $ in millions

Administrative Spending

Data Source: IPEDS

Administrative spending is a smaller portion of the VT budget than at most of our peer institutions.

22% 20% 20% 15%

78% 80% 80% 85%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Virginia ResearchAverage (n=2)

Public ResearchAverage (n=72)

SCHEV Peer Average(n=25)

Virginia Tech

Administrative Costs as a Percent of Total Core ExpendituresFY2015

Remaining Core Expenses(Instruction, Research,Public Service, etc.)

Academic & InstitutionalSupport

July 2017 – the American Council of Trustees and Alumni (ACTA) published a report on administrative costs in higher education.

Using IPEDS data, study calculates ratio of institutional support (administrative) spendingcompared to instruction and academic support (instructional) spending.

Virginia Tech ratio is 0.14, meaning VT spent $0.14 on institutional support for each $1.00 of spending on instruction and academic support. This ratio is lower than peer averages.

Administrative Spending

0.18 0.18 0.170.14

0.00

0.05

0.10

0.15

0.20

Public Research (n=81) SCHEV Peer Average(n=25)

Virginia Research (w/o VT)Average (n=2)

Virginia Tech

ACTA Administrative Cost RatioFY2015

Data Source: IPEDS

VT is #23 Best College for Your Money Money Magazine’s measure of Quality, Affordability, and Alumni Success

VT is #1 in “Their Students Love These Colleges” The Princeton Review

Average salary within 5 years: $57,500 Payscale.com/Money Magazine

47% of Virginia resident graduates have no debt Average debt of resident borrowers is $26,273 ($30,100 nationally)

National figures from the Project on Student Debt by the Institute for College Access & Success.

Of those with debt: 1.6% Cohort Default Rate (11.3% nationally) 2013 CDR data. The 2014 DRAFT CDR data (to be published in September) has VT at just 1.4%.

Federal Loan Repayment Rate (3YR): 80% (46% nationally) Students with federal loans who are able to pay down at least $1 of the principal balance within 3 years of leaving institution.

19

Virginia Tech: Value Added

Academic Plan

Dr. Thanassis RikakisExecutive Vice President and Provost

Helping Build the Commonwealth’s 21st Century Economy

Market needs change on a much faster cycle than academic disciplines accrue knowledge or research infrastructure can develop

Virginia Tech is pursuing methods to ensure institutional programs are responsive to our rapidly changing external environment

Cha

nge

Time

The Responsive 21st

Century Land Grant University

Building Communities of Discovery and Learning for Life

College Access

Collaborative

K-12 Partnerships Industry PartnershipsFormative Training

Access and Diversity Financial Aid Enrollment Growth

VCCS & Other 4YRs

In VA

Virginia Tech Lifelong Learning

Opportunities

Industry, Government, Not for Profit

Sectors

Adaptive Learning

From Basic Research to Market Driven Outcomes

BasicResearch

Applied and Translational

Research

Market Needs

Partnership – Academia, Industry, Government and Community

A Statewide Strategy Focused on Virginia Tech and State Strengths

InfrastructureBlacksburg & Beyond

Advanced ManufacturingDanvillePetersburg

Data, Artificial Intelligence and SecurityNational Capital Region

Health Science & Technology Innovation CorridorRoanoke

The Responsive 21st Century Land Grant University

Experiential Learning and Partnerships• Co-labs• Internships/Externships• Undergraduate Research• Living Learning Communities

Transdisciplinary Discovery• Faculty Clusters• Shared Facilities• Cross-Cutting Training and

Credentials

Disciplinary Depth• Colleges and Departments• Degrees

Research ImpactResearch at Virginia Tech spans several growing domains.

Virginia Tech CarilionSchool of Medicine

(VTCSOM)Integration

Carilion ClinicVTC Research

Institute

VTC School of Medicine

Physician Educators

Physician Scientists

Health Science and TechnologyCampus at Roanoke Innovation Corridor

Community Partnerships

Enhanced Health CareDestination

Practice

IP Transfers, Patents,

Start-Ups

Research

Philanthropy

Virginia TechEducation

Biomedical Research

Basic Science Education

Industry Partnerships

Interdisciplinary Research

Total Comprehensive University

Health and Education Driving Economic Development in Southwest Virginia

Chronology of Development 2007- VT, Carilion Clinic, and state announced a public-private partnership:

VTCSOM and Research Institute to address physician shortage.

2008 - Commonwealth approved a $59Mcapital project.

Fall 2010 - Charter class enrolled

May 2016 - General Assembly encourageddevelopment of the partnership, includingthe potential for VT to acquire VTSCOM

August 2016 - VT BOV approved intent to acquire and integrate VTCSOM into VT

May 2017 - Included in VT long-term enrollment projections

Accreditation

Acquisition of another accredited institution is a substantive change to VT’s regional accreditation status

Process overseen by Southern Association of Colleges and Schools Commission on Colleges (SACSCOC)

Change must also be approved by the Liaison Committee on Medical Education (LCME), which oversees accreditation of medical education programs

Coordination with State Council of Higher Education for Virginia on status of programs at integration

2018-19Revenue

Medical Student Tuition (~$52K) $7.3Partnership Nongeneral Funds 6.9Miscellaneous 0.3

Total Revenue 14.5

ExpensesMedical Instruction (14.5)

Net $0

The medical program will be funded by existing, self-generated revenue.

Currently: Joint integration workgroups coordinating various aspects of integration: accreditation, communications, facilities, finance, IT, libraries, personnel, student services

November 2017: Boards of both institutions approve acquisition

July 2018 – VTCSOM becomesVirginia Tech’s 9th college

2018-19 – Site visit by SACSCOCand LCME for accreditation

Key Initiatives of 2018-2022

Six-Year Plan

Faculty and Staff Compensation: Maintaining an annual merit process can support retention of high-performing faculty and staff. The university is currently at the 33rd percentile of the peer group faculty salary average.

Increase Access for Virginia Undergraduates and Support Growth of Stem-H Degrees: This is the core of our effort to advance Virginia Tech as a contemporary land-grant university.

Develop Destination Areas: Instruction and research clusters that are focused on the following areas:

Adaptive Brain and Behavior Data and Decision Sciences Global Systems Science Integrated Security Intelligent Infrastructure for Human-Centered Communities

Opportunities for Commonwealth Partnership

Advance Strategic Research Opportunities: The university will expand partnerships in strategic areas including:

Health sciences/neuroscience Autonomous Systems Cybersecurity

Expand Degree Pathways: Increased access and affordability to underrepresented Virginians, including:

Urban and rural K-12: VT’s College Access Collaborative Virginia State University: bachelor to master’s program at VT Danville Community College: manufacturing engineering partnership Virginia Western Community College: health science transfer program

Agency 229: Advance Agricultural Competitiveness: An integrated research and extension effort will be at the forefront of supporting a sustainable global agricultural and natural resource industry. A strong partnership with relevant industries is the key to the success of this initiative.

Opportunities for Commonwealth Partnership

Virginia UndergraduateTuition and Fee Increase History

2017-18 continues the slowing of in-state undergraduate tuition increases.

9.8%9.6%

3.9% 4.9%

4.9%

3.9% 2.9%

2.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Perc

enta

ge In

crea

se o

ver

Prev

ious

Yea

r

University Division -Nongeneral Fund Revenue Estimate

Tuition % Increase Placeholder

2018-19 2019-20

Resident Nonresident Resident Nonresident

Undergraduate 2.9 2.9 2.9 2.9

Graduate 2.9 2.9 2.9 2.9

Vet Med 2.0 2.0 2.0 2.0

Medicine N/A N/A 3.5 3.5

Access to higher education is a core tenet of the university’s Land Grant mission

Aid programs targeted at Virginians with need, first-generation Virginians, and K-12 pathway participants

Commitment in Management Agreement to reduce unmet need and mitigate tuition increases Funds for the Future (FFF) is primary tool to mitigate tuition increases

Financial Aid Strategy

Family Income (AGI)

Undergraduate Tuition & Fee

Increase Protection*

Example Impact of FFF Protection for Undergraduate Student

Total Tuition & E&G Fee Increase

Net Impact of Tuition & Fee

Increase$0 - $74,999 100% 2.9% 0%

$75,000 - $87,499 50% 2.9% 1.5%$87,500 - $99,999 25% 2.9% 2.2%

Capital Priorities

Virginia Tech Capital Priorities

Agency 208General

FundNongeneral

Fund Total1 Undergraduate Science Laboratory $ 74.8 $ 0.0 $ 74.8

2 Data Analytics & Decision Sciences Building 75.0 0.0 75.0

3 Replace Randolph Hall 155.1 27.4 182.5

4 Corps Leadership & Military Science Building 29.9 20.0 49.9

5 Renovate Robeson Hall 44.6 0.0 44.6

Agency 2291 Global Systems Sciences Building $ 94.4 $ 0.0 $ 94.4

2 Renew Livestock and Poultry Research Facilities, Phase II 24.3 0.0 24.3

Focus on: Repair and replacement of deteriorating buildings, Increase of lab space for STEM-H programs, Investing in cost-containment and efficiency efforts

Restructuring

Restructuring Restructuring has been successful at Virginia Tech:

Increased efficiency

Improved operating environment and responsiveness of services

Reduced cost of operations, purchasing

Yet some tenets of Restructuring have not been fully realized:

Compensation authority

Interest Earnings and Credit Card rebate

RestructuringIn the Future

Since Restructuring, VT has increased Virginia undergraduate enrollment by over 3,400 students

In-state/Out-of-State mix has remained steady at 72% over that time period

VT has slowed the rate of growth in tuition

Increase enrollment flexibility (percentage split) and continue with the next step in restructuring will allow the university to capitalize in high-demand areas

Generating resources while holding down resident tuition

Ensure academic quality to compete with other states and drive economic development in Virginia

Achieve additional economies of scale and control costs

Moving Forward

Partnering for the Future

In partnership with the Commonwealth, the university can Create opportunities for Virginians to achieve personal and professional success

Discover solutions to cross-disciplinary challenges that affect the world

Contribute to Economic Prosperity in Virginia

We understand the financial challenges of the state Limited resources can be targeted to advance initiatives that generate incremental

resources for the commonwealth

Research investments lead to long-term growth of the economy and workforce

Beyond Boundaries is more than an exercise State of mind, pushing faculty, staff, and students to dream big

Advancing Virginia Tech as a global Land Grant institution

Questions?