1. Tennessee Higher Education Commission 2013-14 Higher Education Recommendations & Finance Overview November 15, 2012

2. Tennessee Higher Education Commission Finance Background Data 2

3. 3 Tennessee Higher Education Commission TN Outcomes-Based Formula 3

4. 4 Tennessee Higher Education Commission TN Outcomes-Based Formula 4

5. 5 Tennessee Higher Education Commission TN Outcomes-Based Formula 5

6. 6 Tennessee Higher Education Commission TN Outcomes-Based Formula 6

7. 7 Tennessee Higher Education Commission TN Outcomes-Based Formula 7

8. 8 Tennessee Higher Education Commission TN Outcomes-Based Formula 8

9. Tennessee Higher Education Commission Overview of Phase-In Period 9

10. 10 Tennessee Higher Education Commission TN Outcomes-Based Formula Hold Harmless Policy Phase-out Begins 10

11. 11 Tennessee Higher Education Commission Cumulative Change in Appropriations at Universities Due to the Formula 11

12. 12 Tennessee Higher Education Commission Cumulative Change in Appropriations at Community Colleges Due to the Formula 12

13. 13 Tennessee Higher Education Commission TN Outcomes-Based Formula 13

14. 14 Tennessee Higher Education Commission TN Outcomes-Based Formula 14

15. Tennessee Higher Education Commission Financial Aid Background Data 15

16. Tennessee Higher Education Commission Federal governments Free Application for Federal Student Aid, or FAFSA. Expected Family Contribution (EFC). A proxy for a students ability to pay for college. Basis for awarding need-based financial aid such as the Federal Pell grant and the Tennessee Student Assistance Award (TSAA). Student Income Profile 16

17. Tennessee Higher Education Commission Student Income Profile Of the 120,000 students who filed a FAFSA in 2007, 52 percent were Pell eligible. 17

18. Tennessee Higher Education Commission Student Income Profile Of the 164,000 students who filed a FAFSA in 2011, 62 percent were Pell eligible. 18

19. 19 Tennessee Higher Education Commission Student Income Profile Of all community college students who filed a FAFSA in 2011… 74 percent were Pell/TSAA eligible. 84 percent of adults students were Pell/TSAA eligible. 52 percent had a zero EFC. From 2007 to 2011, the proportion of students who had an EFC of zero increased from 34% to 52%. Northeast CC had the highest FAFSA completion rate at 76%. 19

20. 20 Tennessee Higher Education Commission Student Income Profile Of all university students who filed a FAFSA in 2011… 53 percent were Pell/TSAA eligible. 32 percent had a zero EFC. From 2007 to 2011, the proportion of students who had an EFC of zero increased from 20% to 32%. Tennessee Tech had the highest FAFSA completion rate at 85%. 20

21. Tennessee Higher Education Commission Student Financial Aid Sources: THEC, TSAC, US Dept. Education Out of 247,000 students in public higher education, over 121,000 received a Pell grant and more than 87,000 benefited from the lottery program. 21

22. Tennessee Higher Education Commission Student Financial Aid Sources: THEC, TSAC, US Dept. Education In 2010-11 public higher education collected over $1.1 billion in gross tuition revenue, which was offset by $730 million in federal and state grants. 22

23. Tennessee Higher Education Commission Average debt for a TN university graduate (public and private) was $20,700 in 2011. This was the 6 th lowest debt level in the nation. In 2005, TN had the 34 th lowest debt level. 53 percent of TN graduates had debt, the 11 th lowest percentage in the nation. Student Debt 23

24. Tennessee Higher Education Commission Student Debt Analysis Source: Project on Student Debt Database 24

25. Tennessee Higher Education Commission Student Debt Analysis 25

26. Tennessee Higher Education Commission Student Debt Analysis 26

27. Tennessee Higher Education Commission Low Student Debt Factors Emergence of lottery scholarship. Protection of TSAA from budget cuts. Institutional and TSAC default prevention programs. Elevation of financial literacy programs. 27

28. Tennessee Higher Education Commission 2013-14 Recommendations Summary 28

29. Tennessee Higher Education Commission 2013-14 Overview 2013-14 is the 3 rd and final year of the phase-in period. Outcomes model is fully phased in and the Hold Harmless provision is fully phased out. 29

30. Tennessee Higher Education Commission 2013-14 Overview Outcome data has undergone significant improvement over last two years. Annual meetings of Data Quality Roundtable; Formula Data Committee; Auditors meeting. Intensive efforts since summer 2012 to align UT, TBR, THEC data. 30

31. Tennessee Higher Education Commission Productivity Changes 31

32. Tennessee Higher Education Commission Productivity Changes 32

33. Tennessee Higher Education Commission Productivity Changes 33

34. Tennessee Higher Education Commission Productivity Changes 34

35. Tennessee Higher Education Commission 2013-14 Recommendation Summary - Operating 35

36. Tennessee Higher Education Commission State Appropriation Recommendations $35.5M to fund outcome growth. $14M for Non-formula units. 33.6M for TSAA financial aid. 36

37. Tennessee Higher Education Commission Outcomes Formula Analysis East Tennessee State University Component Impact on 2013-14 State Appropriations 37

38. Tennessee Higher Education Commission State Appropriation Recommendations $15.7 for TTC/CC Equipment Replenishment. $1M for Higher Education Innovation Fund. 38

39. Tennessee Higher Education Commission 2013-14 Recommendation Summary - Tuition 39

40. Tennessee Higher Education Commission Tuition Recommendations Affordability and financial aid; Student income profile; Institutional revenues and cost inflation. 40

41. Tennessee Higher Education Commission Tuition Comparisons 41

42. Tennessee Higher Education Commission THEC Tuition Model as a guide. Revenue projections based on inflation, enrollment changes. Tuition Recommendations 42

43. Tennessee Higher Education Commission Assuming $35.5M in new state funding; Assuming 3% inflation and no enrollment growth, tuition would need to increase by: University average = 2.5%; Community colleges = 1.4%. Tuition Recommendations 43

44. Tennessee Higher Education Commission Tuition Recommendations Up to 6 Percent at Universities Up to 3 Percent at TTCs & Community Colleges 44

45. Tennessee Higher Education Commission 2013-14 Recommendation Summary - Capital 45

46. Tennessee Higher Education Commission Capital Projects Continuation of 5 year plan. Institutional match component. Full project planning funded out of institutional match. Alignment with CCTA. 46

47. Tennessee Higher Education Commission Capital Projects $289M for seven capital outlay projects. $104M for 69 capital maintenance projects. 47

48. Tennessee Higher Education Commission 2013-14 Higher Education Recommendations & Finance Overview November 15, 2012 48