Postsecondary Education Review Commission Impact of Shifting Enrollments on Resources in Louisiana September 29, 2009

5-Year Budget Outlook Source: Louisiana Division of Administration

Postsecondary Education “Budget” Outlook and Issues FY , the current year –Effective reduction of $120+ million in direct operational funding between State fund reductions and federal stimulus replacement, an 8.7% effective reduction in “State” support but only a 3.3% reduction in overall support FY , next fiscal year –Uncertainty of outlook –Recent communication from the Administration to the Postsecondary Education Review Commission projecting a minimum $146 million additional funding reduction FY , the following fiscal year –Projected “big budget problem”, a State budget shortfall projected at almost $2 billion –Federal stimulus funding ends

Louisiana Office of Student Financial Assistance and Student Financial Assistance TOPS - $130 million Go Grant - $34 million Dual Enrollment - $5.5 million

Source: Louisiana Board of Regents

$313.4M General Fund Reduction after mid-yr reduction

Federal Stimulus $189.7M Stimulus Supported Base $ 1.3 B

Minimum $146M SGF Reduction projected for FY10-11

Federal Stimulus $189.7M Minimum $146M SGF Reduction projected for FY10-11

Federal Stimulus $189.7M Stimulus Supported Base $1.155B Minimum $146M SGF Reduction projected for FY10-11

146M SGF Reduction

$459.3M General Fund Reduction from Level (after $55M mid-year cut) $146M SGF Reduction

With Stimulus Without Stimulus $976.0 $821.9 Institutions Health sciences centers Agricultural centers Law centers Stand-alone research centers Boards and system offices

Differences in funding approaches between “old” and “new” formulas are significant New formula sets values for student credit hour production specifically for each institution, by level of student and discipline of the student credit hour Differentials remain in values based upon “type” of institution and its specific costs (SREB category) State/student shares of cost are function of “type” of institution (generally 60% or higher share for 4-Yr vs. 70%+ State 2-Yr.) Analysis of Shifting Enrollment

Analysis is based upon overall enrollment, not just entering freshmen cohort Time will be required to “shift” enrollment in substantial amounts Nature of “shift” in mix will depend upon: –Overall growth in enrollment –Degree of stability in 4-year enrollment –Degree of growth in 2-year enrollment Possible Causes of “shift” –Admissions standards –Growth in additional students to 2-year institutions –Enrollment caps at 4-year institutions –Significant change in “pricing” of respective types of institutions “Savings” potential from shifting enrollments: –SREB rates vs. Actual funding rates –Impact of new formula approach –Lowest funded 4-year institutions are likely to yield the most significant areas for potential shifts of enrollment, thus less “savings” potential