President Kaler’s July 2014 Report to the Board of Regents
Thank you, Chair Beeson.
As we turned the calendar’s page since our last Board meeting, we’ve closed the books on fiscal year 2014.
- In FY 14, we sent 15,000 well-prepared graduates out into Minnesota’s and the nation’s work force.
- The University of Minnesota Foundation exceeded its fundraising goal for the year by nearly $30 million.
- Applications were up on every campus, with a combined increase of more than 5 percent.
- Nearly 57,000 students were eager to attend the University this fall.
- We’re poised to set another record for creating startup companies from University discoveries, driving our state’s innovation culture and job creation.
- And, of course, on the Operational Excellence front, we’ve achieved $36 million in administrative cost reductions, ahead of schedule towards our $90 million goal.
They are all very good and satisfying accomplishments.
But there are other remarkable facts that I’ve been reviewing and thinking about the past couple of weeks. They emerged from reports released by the respected Brookings Institution in Washington, D.C., and the U.S. Department of Labor.
These reports highlight the economic and talent impact the University of Minnesota has on this state. And they confirm the real value of a University degree. As you know, affordability is a priority of mine and this Board. Together, we have delivered on that commitment by working with our partners at the Legislature and the Governor to freeze tuition for Minnesota resident undergraduates.
We have more to do, and we will do more. But as the Brookings and Labor Department studies illustrate, we must re-address and regain the upper hand on the conversation around financial aid and student debt.
It is, of course, a national conversation that has reached to the White House. It is a local conversation at every public forum and social event I attend, and, I dare say, you attend, too. Simply, we must return to the value equation conversation. The Value Equation is simple: The ratio of excellence over cost equals value. And student and family debt is a monetary and emotional factor in calculating that cost of higher education.
The Brookings Institution report has added solid facts to the national student debt debate. Now, while there are legitimate horror stories about some students with six-figure undergraduate debt, those are truly outliers. According to Brookings, only two percent of young households owe more than $100,000 in student loans. Two percent nationally.
How does this apply to the University of Minnesota? Pretty well. In 2013, we had 7,420 bachelor’s degree recipients on our Twin Cities campus. Now, you know I like numbers. I’m going to give you a few more. Seven thousand, four hundred and twenty. Of those 7,420 graduates, a grand total of 8—you can count them on your fingers—had debt at that extreme $100,000 level.
We need to examine a little more how that happened for those eight, but it was a mere eight, or about one-tenth of one percent of our graduates. And a total of 6.6 percent graduated with $50,000 in debt or more. That’s a lot of money, but only for 7 percent of our graduates.
On the other end of the spectrum, nearly 2,800 of our graduates finished their degrees with zero debt.
But for all of our students—including those with debt—a University of Minnesota degree provides exceptional lifelong value. Economists tell us that there are few investments with an ROI as high as the one in a college degree. Look at stocks, at gold, at real estate. Over the course of a lifetime, the return on investment in a college education dwarfs the historic return on investment on any of those assets.
Which leads to recent U.S. Labor Department data. The pay gap between college graduates and everyone else reached a record high in 2013.
And the national unemployment rate for workers between 25 and 34 years old with a bachelor’s degree was half of the national average for all workers. This state’s unemployment rate is significantly below the national average, so thousands of University alumni are contributing to that prosperity, our talent pool, and innovation.
My point is this: Over the next few months, this is an issue and a set of facts that I want to help better explain and help to define. Yes, we will surely continue to contain costs. And we surely need to make this University as affordable and accessible as possible to students from all economic backgrounds. But we also need to show more effectively how—and tell that story more powerfully—that we are already a great investment for our students, their families and the entire state.
Now, let me turn briefly to some congratulations I want to offer.
First, congratulations to Chemistry Professor Laura Gagliardi. She received a profoundly important $12 million grant from the U.S. Department of Energy to form our new Inorganometallic Catalyst Design Center. And you met her earlier this year as a Distinguished McKnight University Professor.
Congratulations to our Twin Cities’ College of Science and Engineering, the Gary S. Holmes Center for Entrepreneurship in the Carlson School of Management, and the Office for Technology Commercialization for receiving as a team a National Science Foundation I-Corps Site award.
The NSF grant will support opportunities for students to test business model assumptions and receive recurring feedback from instructors and mentors, and it will include micro-grants to students to get projects off the ground and into the marketplace.
Congratulations to Chancellor Wood as two University of Minnesota Crookston bachelor’s degree programs—management and marketing—have been ranked among the top five best online programs within their discipline in the United States by theBestSchools.org, an online resource for prospective students seeking a college degree.
Congratulations to Bulldogs athletics at UMD. Over the past academic year, UMD produced 12 All-Americans, one national Division II volleyball player of the year and one national Division II track and field champion. UMD’s 417 student-athletes posted an average GPA 3.14—an all-time high.
Congratulations to the University of Minnesota Morris, Class of ’64, Morris’s first-ever graduating class, on its 50th reunion celebration. Of the 61 members of that pioneering first class, 38 gathered in Morris last month to reconnect, reminisce and re-affirm the impact of UM Morris has had on their lives.
Congratulations to all!
With that, Mr. Chair, I conclude my report.