1. Higher education financing trends… national patterns and implications for Illinois Jane V. Wellman Illinois Higher Education Finance Commission Chicago, IL August 27, 2010

2. Topics to be covered Major take-aways from national research re: trends in revenues and spending Pricing, spending and subsidy trends What the data say about adequacy and equity Recommendations about future focus for IL 2

3. National patterns: Where the money comes from Source: Delta Cost Project IPEDS database, 1987-2008, 11-year matched set. Note: In private institutions, investment returns include unrealized gains/losses. 3

4. National patterns: Where the money goes Operating expenses per FTE by major category, 1998 – 2008, in 2008 $

5. Spending within E&R, 1998-2008 (in 2008 $) 5 National patterns: Where the money goes within E&R

6. Illinois Public Research Institutions: Average Subsidy/Student share of E&R Spending per student by State, 2008

7. Illinois/National Comparisons - Public Research Sector - AY 2008 National averageIllinoisIllinois Rank E&R spending per student $15,619$16,28220 State and local subsidy per student $8,055$7,53328 7

8. Public Masters Institutions: Average Subsidy/Student share of E&R Spending per student by State, 2008 Illinois

9. Illinois/National Comparisons - Public Masters AY 2008 National averageIllinoisIllinois Rank E&R spending per student $12,185$13,56013 State and local subsidy per student $6,578$7,20317 9

10. Public Community Colleges: Average Subsidy/Student share of E&R Spending per student by State, 2008 Illinois

11. Illinois/National Comparisons – Public Community Colleges AY 2008 National averageIllinoisIllinois Rank E&R spending per student $10,396$7,83646 State and local subsidy per student $7,404$5,42231 11

12. 12 National Public20032008% change Research sector$14,219$15,619+9.8% Student share42%48%+14.3% Masters sectpr$11,39212,185+7.0% Student share40%46%+15% Community Colleges$9,600$10,396+8.3% Student share27%28%+3.7% Illinois public institutions Research sector$14,980$16,282+8.7% Student Share43%55%+28% Masters sector$12,750$13,560+6.3% Student share35%48%+37% Community colleges$7,052$7,836+11% Student share27%31%+14.8% Public sector changes in E&R spending per student, and in student share of costs, 2003-2008

13. Degrees & Certificates awarded per FTE vs. Total Funding per FTE (2006-2007) slide 13 Source: SHEEO State Higher Education Finance Survey 2008: NCES IPEDS Completions Survey

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16. Recommendations for future Illinois policy focus Anchor financing strategy on using resources to meet goals – Adequacy focus will always put pressure on increasing revenues in research sector – Equity considerations and student share of costs appropriate factors to include Build expectations for strategic cost management and productivity into fund management – Look for evidence of sustained investments in core functions Develop – and use – metrics for monitoring spending including cost- management that address subsidies, prices as a share of costs, and how resources are used Pay attention to state as well as institutional role in finding long-term solutions Include attention to private providers 16