State Higher Education FinanceFiscal Year 2012

Summary of Analysis and Findings

Agenda

History of the SHEF Project SHEF Metrics and Adjustments

HECA vs. CPI Summary of FY 2012 Findings

National State-level

Additional Data / Analysis Opportunities

SHEF History The tenth report, SHEF FY 2012, was released

on March 6, 2013

SHEF builds upon Dr. Kent Halstead’s “Halstead Finance Survey” and the corresponding data going back to 1972

Halstead ceased publishing his study in 1998. SHEEO membership encouraged SHEEO to embark on a similar study moving forward

SHEF History Halstead transferred his dataset to SHEEO

which became the historical basis for SHEF

First SHEF report released in 2004 for FY 2003

SHEEO moved to an online data collection tool (SSDB) in 2010 and aligned the SHEF Survey with the Grapevine Survey maintained by Illinois State University

What’s the Difference?

Grapevine SHEF The first look at state

appropriations in the current fiscal year

Typically released in December or January

http://grapevine.illinoisstate.edu/

Since 1960

A more detailed look at state and local appropriations, tuition revenue, and enrollment for the most recent completed fiscal year

Typically released in March

http://www.sheeo.org Since 2003, with data

going back to 1980

What SHEF does not measure Direct tuition rate increases

SHEF measures tuition revenue over time which may increase due to tuition rate increases, enrollment growth, and changes in enrollment mix (e.g., more non-resident students or more graduate students)

College Board is a better source for specific tuition rate information

SHEF Metrics State and Local Support

Educational Appropriations

Net Tuition Revenue

Full-Time Equivalent Enrollment (FTE)

Total Educational Revenue

Make up the Wave Chart

SHEF Adjustments - HECA Higher Education Cost Adjustment (HECA)

To measure inflation over time, $s adjusted to current year

SHEEO developed as an alternative to CPI and HEPI as a means to account for the “market basket of goods” higher education must purchase, that is, primarily personnel costs

Constructed from two existing federal indices - the Employee Cost Index (75%) and GDP-Implicit Price Deflator (25%)

FY 2011 appropriation: $1000Divide by corresponding HECA: $1000/0.9824FY 2011 appropriation in FY 2012 $s: $1018

HECA vs. CPI - HECA Criticisms HECA’s critics argue that HECA has historically

grown more quickly than CPI and therefore overstates the amount of support institutions need in order to keep up with inflation

A further critique is that HECA is a meaningless figure for families struggling to pay tuition costs

HECACPI

HECA vs. CPI - SHEEO’s Response Institutions of higher education primary costs are

driven by personnel expenditures which make up the bulk of the higher education “market basket of goods.” SHEF’s intent is to measure trends in revenue for educational delivery. HECA is a reasonable means to compare available revenue to necessary expenditures

Little difference between CPI and HECA since 2007, due to flat salaries. Since 2010, CPI is growing faster than HECA

CPI is a better measure for tuition rate increases, which SHEF does not measure. SHEF tracks changes in net tuition revenues

SHEF Adjustments – EMI and COLA Enrollment Mix Index (EMI)

To adjust for differences in the mix of enrollment and costs among types of institutions among the states

Aggregated IPEDS data Cost of Living Adjustment (COLA)

To account for cost of living differences among the states

Derived from the 2003 Berry Index that provides a single index for each state

State X with $1000 educational appropriationAdjust by EMI: $1000/0.95 = $1053Adjust by EMI and COLA: $1053/1.01 = $1043

National-level Findings Enrollment grew 15.6% since 2007 to

over 11.5 million FTE in 2012 (down slightly from 2011)

For the third year in a row, educational appropriations per student hit a 25-year low and were $5,906 in 2012 (down 23.0% since 2007)

Net tuition revenue per student continued to increase, reaching $5,189 in 2012 (up 19.1% since 2007). It now makes up 47.0% of total educational revenue

Tuition increases did not offset reductions in state and local support. Total educational revenue is down 7.9% since 2007

State-level Findings All fifty states grew enrollment since

2007, ranging from 4.2% growth in California to 36.2% in Oregon

Two states, Illinois and North Dakota increased per student educational appropriations since 2007. Illinois’ increase is due to addressing the historic underfunding of its pension program

48 states decreased educational appropriations per FTE

Percent of total revenue from net tuition ranges from 13.8% in Wyoming to 85.1% in Vermont in 2012

In 36 states, total educational revenue decreased since 2007, despite increases in net tuition revenue

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36.2%

Source: State Higher Education Executive Officers

Figure 5Full-Time Equivalent (FTE) Enrollment in Public Higher Education

Percent Change by State, Fiscal 2007-2012

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Note: Dollars adjusted by 2012 HECA, Cost of Living Adjustment, and Enrollment Mix Index.

Source: State Higher Education Executive Officers

Figure 6Educational Appropriations per FTE

Percent Change by State, Fiscal 2007-2012

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13.8%

47.0%

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Note: Dollars adjusted by 2012 HECA, Cost of Living Adjustment, and Enrollment Mix. Source: State Higher Education Executive Officers

Figure 7Net Tuition as a Percent of Public Higher Education Total Educational Revenue

by State, Fiscal 2012

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Note: Dollars adjusted by 2012 HECA, Cost of Living Adjustment, and Enrollment Mix; total educational revenue excludes net tuition revenue used for capi-tal debt service. Source: State Higher Education Executive Officers

Figure 8Total Educational Revenue per FTE

Percent Change by State, Fiscal 2007-2012

Additional Data/Analysis Opportunities

All the tables and charts

The raw, unadjusted data

State wave charts and data

http://www.sheeo.org/shef12

SHEF in the News

CBPP Analysis Combined SHEF, Grapevine, and College

Board data to correlate tuition rate increases with cuts in state support

Recent Deep State Higher Education Cuts may Harm Students and the Economy for Years to Come

http://www.cbpp.org/cms/index.cfm?fa=view&id=3927

Questions?Please use the Chat Box

Or contact Andy Carlson:acarlson@sheeo.org or 303-541-1607