UCB Tuition and Aid Advisory Board: Priorities and Funding Strategies

1. Tuition & Aid Advisory Board A Discussion of UCB Priorities and Funding Strategies September 27, 2004

2. UCB Priorities • Enhance quality • Avoid budget cuts in FY06 (COF value + Fee for Service > FY05 appropriation) • Gain approval for tuition rate increases sufficient to meet expense needs over multi-year planning horizon • Cover fixed cost increases • Provide funds to remain competitive w/in AAU • Define substance of enterprise status

3. Investment Strategy • Maintain outstanding faculty • Competitive salaries and benefits • Start-up and matching funds • Selective allocation of faculty lines • PhD support and enrollment growth • Encourage innovative instruction and interdisciplinary research

4. Investment Strategy • Attract improved student quality • Greater selectivity and diversity in admissions • Increase financial aid/scholarships • Offer small group learning experiences and increased research opportunities for undergraduates • Improve tenure-track faculty to student ratio

5. Investment Strategy • Provide necessary infrastructure • Develop and renovate instructional, research and support facilities • Enhance student support services • Promote staff development • Upgrade and improve business systems and operations

6. STATE SUPPORT FOR HIGHER ED

7. State Effort, FY04State Higher Ed Appropriation per $1000 Personal Income

8. CU-Boulder Tuition & Fees vs. AAU Publics & Colorado Privates FY04

9. UCB Affordability

10. State Tax Support & Tuition Per Resident Student FTE $8,879 below average

12. SB-189 New Funding Model • College Opportunity Fund • Provides UG per credit hour grant for residents up to 145 hours ($80/hr est.) • 50% grant for Pell-eligible students at certain Colorado private institutions • Replaces current direct state tax appropriation to institutions • Allows enterprise status for qualifying institutions • Removes revenues from state TABOR limits • Authorizes revenue bonding authority for academic facilities

13. SB-189 New Funding Model • Performance Contracts • May replace Quality Indicator System accountability reporting to CCHE • May provide opportunity for increased management flexibility • Fee for Service • Contract for services beyond UG COF grant • Provides funding for graduate/professional education

14. Non-Resident: Cost $17,800 Tuition -$20,592 Net /Over $ 2,792 Resident: Cost $17,800 COF -$ 2,400 NRes Cr. -$ 1,396 Endw/Gft. -$ 2,628 Tuition -$ 3,480 Net /Under ($ 7,896) The Cost of a Quality Education

15. Bridging the Resource Gap • To address the shortfall in funding resident education: • Endowment income and annual gifts will need to double, • Entrepreneurial revenues will need to increase, and; • Resident tuition rates may need to address remaining shortfalls • To do this will require a multi-year implementation strategy

16. A Proposed Tuition Plan • Establish UG resident base tuition increases over six year planning horizon • Utilize “fixed tuition” plan to minimize impacts to students • One-time increase per cohort – then tuition fixed for five years • One-time increase would approximate total of normal annual increases • Utilize financial aid to ensure accessibility and student quality

17. Moving Toward a New Economy • Establish fund-raising targets by Schools/Colleges and CUF • Establish a tuition and fee advisory board to evaluate market tuition and financial aid goals • Expand other revenue opportunities, such as executive education, summer school, technology transfer, real estate, and investment income

18. Summary • A world renowned institution with a significant role in Colorado’s future • Long known for efficiency, but precariously maintaining competitiveness • With the right financial model and legislative support, UCB can sustain its excellence, and enhance Colorado’s economic future and quality of life