SHEF FY 2014: Summary of Data and Findings April 30, 2015 Andy Carlson, Senior Policy Analyst John Armstrong, Information Analyst

Agenda Overview of SHEF project and changes made for FY 2014 report Findings – What the data tell us at the national and state levels Interactive data demonstration Q&A

Changes to the 2014 Report New design Case studies Interactive data – Surveyed SHEFOs, data providers, and policy community prior to making changes

SHEF Metrics State and Local Support Educational Appropriations Net Tuition Revenue Full-Time Equivalent Enrollment (FTE) Total Educational Revenue – Data adjusted for inflation, enrollment mix, and cost of living differences among states 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 2013 appropriation: $1000 Divide by corresponding HECA: $1000/ FY 2013 appropriation in FY 2014 $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 HECA CPI

HECA vs. CPI - SHEEO’s Response Higher educations’ 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 appropriation Adjust by EMI: $1000/0.95 = $1053 Adjust by EMI and COLA: $1053/1.01 = $1043

National Findings

State-level findings

What does the future hold? Is this recovery sustainable? States still making cuts Pension challenges Oil dependent states Structural issues – Tax policy – Goods v. services – Amazon

Interactive Data Demonstration

Questions