1. 1 Effectiveness and Efficiency Project Report to the House Appropriations Sub-Committee on Education and Economic Development January 25, 2005

2. 2 Why an E & E Initiative? Maintain Affordability, Access and Quality Address fiscal pressures related to: Tuition affordability Projected enrollment increase of 30% over the next decade –“Baby boom echo” & “Thornton effect” Escalating costs (including healthcare, energy, and technology) Sustaining academic quality

3. 3 E & E Legislative Report Report contains 16 Action Items: Implementation under way To be completed or substantially implemented over the next two years Ensure accountability through internal and external reports Savings directed at mitigating tuition increases and maintaining quality

4. 4 E & E “Academic Action Items” Action items to mitigate tuition increases and build institutional capacity: Faculty Workload - Increase teaching loads 10% across the USM Time to Degree - Limit most baccalaureate programs to 120 credits On-line and out-of-classroom learning -Students to complete 12 credits outside traditional classroom experience Enrollment management - Maximize utilization of institutional capacity

5. 5 E & E “Administrative Action Items” Action items to reduce costs, mitigate tuition increases and fund quality: Review organizational structure of “special-purpose institutions” (UMUC, UB, UMBI, UMCES) Procurement –Leverage USM’s buying power, e.g., PeopleSoft, IT, Electricity RFP Enrollment Management Services –Streamline student services functions to eliminate unnecessary duplication Support and Administration: –Collaborate on “shared services” such as Finance and Human Resource Management

6. 6 Anticipated Impact Building Capacity: -Academic initiatives will enable USM to serve an additional 2,100 students over the next three years (FY 2006 – 2361 FTES) --20% - 25% of enrollment growth --no additional cost to the State Reducing cost and funding quality: -Administrative initiatives will enable USM to free up money for investment in quality and to mitigate tuition increases FY 2006 fiscal impact: -Academic Action Items: $9.5 million -Administrative Action Items:$17.1 million -Total Estimated E&E Value $26.6 million

7. 7 USM Financial Aid Task Force

8. 8 Financial Aid Task Force Principles Hold students with greatest financial need harmless Emphasize grants over loans Emphasize need-based aid Work collaboratively (federal, state and institutional levels) Redirect savings from efficiency efforts to financial aid

9. 9 Financial Aid Task Force Recommendations Improve balance of need-based versus non-need- based aid –Increase financial aid funding at all levels –Target the 75th percentile of peers in average percent of need met –Allocate tuition increase revenue to need-based aid –Target fund-raising activities for need-sensitive scholarships –Increase community college transfer student access to financial aid –Modify graduate/professional financial aid to address faculty in workforce shortage areas

10. 10 Financial Aid Task Force Recommendations (cont’d) Decrease student debt burden by increasing grants –Educate students about debt management and alternative funding –Monitor student debt burden –Ensure that students with greatest need graduate with least amount of debt Streamline administrative processes through E & E Initiative

11. 11 Summary USM undergoing a system-wide reengineering –Effectiveness and Efficiency Program continuing –Financial Aid Task Force completed –Tuition Task Force completed –Enrollment Study under way –Strategic Plan Update completed USM is addressing affordability, capacity and quality