Affordability and Efficiency Initiatives in Higher Education History, Current Status & Next Steps November 9, 2017 2017 Annual Trustees Conference Jim kicks off the presentation

Overview of Today’s Presentation History of Ohio’s Affordability & Efficiency Initiative Status Update and Highlights Next Steps In addition, as a reminder, the framework of the Task Force report was two master recommendations and 25 recommendations that focus on operational excellence and efficiency. The 25 recommendations are ongoing exercises to ensure the financial and operational health of your college or university.

History of Ohio’s Affordability & Efficiency Initiative Across all of higher education, revenue from key sources is constrained, while the need for continued access to an affordable education for as many students as possible remains Enrollment Appropriations In addition, as a reminder, the framework of the Task Force report was two master recommendations and 25 recommendations that focus on operational excellence and efficiency. The 25 recommendations are ongoing exercises to ensure the financial and operational health of your college or university.

History of Ohio’s Affordability & Efficiency Initiative Nationally, higher education revenue from key sources is constrained Enrollment Ohio’s Public Higher Education FTE Enrollment (FY11-16) 52,299 (-12%) Source: Ohio Department of Higher Education, FTE Enrollment Trends In addition, as a reminder, the framework of the Task Force report was two master recommendations and 25 recommendations that focus on operational excellence and efficiency. The 25 recommendations are ongoing exercises to ensure the financial and operational health of your college or university.

History of Ohio’s Affordability & Efficiency Initiative Nationally, higher education revenue from key sources is constrained Appropriations per FTE In addition, as a reminder, the framework of the Task Force report was two master recommendations and 25 recommendations that focus on operational excellence and efficiency. The 25 recommendations are ongoing exercises to ensure the financial and operational health of your college or university.

Appropriations per FTE, % change (FY10-FY15) Louisiana -28.5% Arizona -23.8% Delaware -21.8% Pennsylvania -21.8% U.S. Average -2.4% Source: State Higher Education Executive Officers, FY2015 SHEF Report

Appropriations per FTE, % change (FY11-FY16) Louisiana -33.1% Arizona -21.0% Wisconsin -18.8% Pennsylvania -18.7% U.S. Average 3.3% Source: State Higher Education Executive Officers, FY2016 SHEF Report

Appropriations per FTE, % change (FY11-FY16) Louisiana -33.1% Arizona -21.0% Wisconsin -18.8% Pennsylvania -18.7% U.S. Average 3.3% Ohio 11.3% Source: State Higher Education Executive Officers, FY2016 SHEF Report

History of Ohio’s Affordability & Efficiency Initiative With these state and national trends in mind, Ohio’s Task Force on Affordability and Efficiency was developed to recommend solutions based on three key needs In addition, as a reminder, the framework of the Task Force report was two master recommendations and 25 recommendations that focus on operational excellence and efficiency. The 25 recommendations are ongoing exercises to ensure the financial and operational health of your college or university.

Be more efficient in expense management and resource generation; A quick recap of how we got started: In 2015 Governor Kasich established the Task Force on Affordability and Efficiency in Higher Education. There were three charges to the Task Force. Read 3 charges In short, students must have access to an affordable education with the highest possible quality.

Be more efficient in expense management and resource generation; Offer an education of equal or higher quality; and A quick recap of how we got started: In 2015 Governor Kasich established the Task Force on Affordability and Efficiency in Higher Education. There were three charges to the Task Force. Read 3 charges In short, students must have access to an affordable education with the highest possible quality.

Be more efficient in expense management and resource generation; Offer an education of equal or higher quality; and Decrease costs to students and families. A quick recap of how we got started: In 2015 Governor Kasich established the Task Force on Affordability and Efficiency in Higher Education. There were three charges to the Task Force. Read 3 charges In short, students must have access to an affordable education with the highest possible quality.

The Task Force Report Master Recommendation #1 Students Must Benefit Master Recommendation #2 Develop 5-Year Goals Efficiency Savings and New Resource Generation 25 Individual Recommendations Strategies that focus on operational excellence In addition, as a reminder, the framework of the Task Force report was two master recommendations and 25 recommendations that focus on operational excellence and efficiency. The 25 recommendations are ongoing exercises to ensure the financial and operational health of your college or university.

Overview of Today’s Presentation History of Ohio’s Affordability & Efficiency Initiative Status Update and Highlights Next Steps Sara talks about status update and highlights

Status Update and Highlights Based on the FY16 efficiency surveys, total estimated cost savings reported by Ohio’s colleges and universities was almost $250 million. If all of our colleges and universities meet their stated five-year goals, our state will generate more than $1.2 billion in efficiency savings and new resources by FY21. Students and families are the ultimate beneficiaries of this good work. The data captured from the efficiency reports allows ODHE to highlight efficiencies gained at our campuses. Read bullet points. Ohio’s colleges and universities are doing outstanding work and it is greatly appreciated and acknowledge. Chancellor Carey is excited about the work being done and he looks forward to continuing to work with your campuses.

Redeployment of Cost Savings The following chart is from the 2016 Efficiency Report and captures the aggregated amount that institutions have invested to student-focused areas. The largest investment has been to student financial aid at 56%. Student Focus Aggregated Amount Invested by Institutions * Reductions to the total cost of attendance (tuition, fees, room and board, books and materials, or related costs — such as technology) $25,563,282 Student financial aid $55,851,367 Student success services, particularly with regard to completion and time to degree $8,599,237 Improvements to high-demand/high-value student programs $4,851,521 Investments in tools related to affordability and efficiency $3,854,118 *NOTE: Only 27 out of 37 institutions reported an amount invested

Status Update and Highlights Bowling Green State University reported a copier/printer savings of $1.9M in fiscal year 2016. The Ohio State University, after negotiating two contracts, redirected the $2.8 million savings towards student financial aid. Data from efficiency reports illustrates the incredible work Ohio’s colleges and universities are doing. For example…read these

Status Update and Highlights The University of Toledo realized a $3.1 million savings by leveraging its in-house pharmacies to purchase employee prescriptions at the hospital discount versus retail pharmacies and passed that savings on to the University. University of Cincinnati’s financial literacy efforts have helped to reduce their student loan default rate from 10.5% to 7.6% over three years. Read these

Status Update and Highlights Belmont College’s review of their organizational structure resulted in a collective savings of $1.4 million in budgeted expenditures. Lorain County Community College’s Back on Track Scholarship is a $500 incentive to returning students if they register for summer or fall 2016. Read these. This list is not exclusive. There are many more practices we could highlight and they are captured in the 2016 Efficiency Report.

Overview of Today’s Presentation History of Ohio’s Affordability & Efficiency Initiative Status Update and Highlights Next Steps Sara continues on Next Steps

Next Steps Efficiency Reports Approved by each institution’s Board of Trustees in each fiscal year Benchmark and document progress over the prior year Structured around the individual recommendations of the Task Force on Affordability and Efficiency in Higher Education We collected the FY17 efficiency reports in October and will be issuing the Chancellor’s Efficiency Report by December 31, 2017.

Next Steps Regional Compacts – Ohio Revised Code now requires regional compacts of Ohio’s public colleges and universities, with an executed agreement in place by June 30, 2018 for colleges and universities to collaborate more fully on shared operations and programs. Textbook Affordability – Ohio Revised Code now requires each college and university to determine the current cost of textbooks for students enrolled in the institution and submit the study to the Chancellor by a date prescribed by the Chancellor (fall of 2018). We collected the FY17 efficiency reports in October and will be issuing the Chancellor’s Efficiency Report by December 31, 2017. Moving forward, we wanted to put on your radar that there will be two new initiatives you will see on the FY18 efficiency reporting template. Ohio Revised Code Section 3345.59 requires regional compacts of Ohio’s public colleges and universities, with an executed agreement in place by June 30, 2018 for colleges and universities to collaborate more fully on shared operations and programs. Per O.R.C. §3345.59 {E} colleges and universities shall report within their annual efficiency report the efficiencies gained as a result of the compact. This provision will be included in the FY18 Efficiency Advisory Committee survey; therefore, institutions should prepare accordingly to meet this timeline. Ohio Revised Code Section 3333.951(D) requires Ohio’s public colleges and universities to conduct a study to determine the current cost of textbooks for students enrolled in the institution and submit the study to the Chancellor by a date prescribed by the Chancellor. Please note that the study will be due on the same submission timeline as the FY18 Efficiency Advisory Committee survey; therefore, institutions should prepare accordingly to meet this timeline.

Next Steps Efficiency and affordability will continue to be top priorities. Current challenges facing higher education are not expected to weaken in the near term The purpose of the Affordability and Efficiency initiative is to encourage the operational and financial health of each of Ohio’s colleges and universities so that students benefit. Turn over to Jim to close out

Next Steps The Task Force recommendations are strategic exercises that are intended to be iterative and ongoing. Through the data that is provided, our agency is better able to highlight and communicate higher education’s success stories.

Next Steps Board of Trustees are absolutely essential to the success of this initiative. Thank you for all that you have done and will continue to do to ensure that higher education remains accessible and affordable for as many Ohioans as possible.