A fact sheet on tuition, administrative costs, and excellence at the University of Minnesota

Tuesday, January 8, 2013

1. We must do everything we can to keep tuition down, reduce costs, and ensure access to a high-quality education despite the environment in which we operate.

  • Enormous change is under way in all higher education institutions, driven by technology, shifting politics, and a different economy.
  • The University of Minnesota has faced historic state disinvestment during the past decade: a decrease of $140 million annually in state aid since 2008.
  • The primary issues we must address are tuition and rising student debt, and we are doing so every day.

2. The University of Minnesota has grown, driven largely by student demand and a larger research portfolio. But on a dollar-for-dollar basis, or an FTE (full-time equivalent) basis, we’re significantly more productive than ever before.

  • We serve nearly 9,000 more students today than in 2000, an increase of nearly 16 percent.
  • The per capita cost (inflation adjusted) of graduating a student is 13 percent lower than it was in 1997.
  • Even as our student population has grown, the U’s workforce has remained relatively flat, only growing by 3 percent during the last 10 years. During that time our employees served 11.3 percent more students.
  • Research grants and contracts have increased 40 percent during the past five years, amid increased federal regulatory requirements. Each new grant requires staff support. While staff or research positions may increase as new funding is secured, those positions are funded by the grant, not state or tuition dollars.
  • Private philanthropy has grown to record levels; these dollars support student scholarships and excellence above and beyond what state and tuition dollars support. Donors believe in the value of the U.
  • By all measures, students are receiving a better education with better outcomes. Graduation rates are steadily improving (Twin Cities graduation rates are 43 percent higher than 16 years ago and first-year retention reached an all-time high of 91 percent in 2011).
  • Every dollar invested by the state of Minnesota at the U of M returns $13.20 to the state’s economy.
  • As Minnesota’s only research university, the U’s innovation and discovery help drive the state’s economy.
  • Minnesota demands a highly trained workforce, and this is precisely what the U campuses systemwide provide with more than 15,000 graduates each year.
  • The U is in demand among the state’s and the nation’s top high school students. This fall, a record 40,300 prospects applied for admission to the U’s Twin Cities campus for fewer than 5,400 slots.

3. President Kaler has been relentless in reducing administrative costs, holding the line on tuition and investing in the U’s mission.

  • Last year’s tuition increase was the lowest in 12 years: 3.5 percent. President Kaler has proposed freezing undergraduate resident tuition at current rates for the next two years through a new partnership with the state.
  • From day one, President Kaler pledged to hold administration growth to zero and we are making significant progress. Operational Excellence is a top priority that urges everyone at the U to work smarter and stop doing things that don’t help students or advance our mission.
  • So far, the University has:
    • Begun consolidating IT help desk functions (moving from more than 70 points of contact to one), creating savings in its health care plan, and moving to an online purchasing platform for supplies and equipment
    • Eliminated two major administrative offices, saving more than $2.2 million a year
    • Saved $5.6 million in energy costs during the past three years
    • Become the first public higher education institution nationwide to move faculty, staff, and students to Google applications—valued at $15 million a year
    • Consolidated library collections on the St. Paul campus into one Natural Resources Library, saving $130,000 annually
  • We have developed a baseline for understanding where our administrative costs in personnel lie. With this information, we can continue to sharpen our focus on reducing administrative costs.

4. We have more work to do.

  • We take exception to the notion that the U is not an exceptional steward of resources or is not well managed. However, we agree there is much more work to do.
  • We are vigorous in our commitment to cutting costs and operating more efficiently.
  • There are tough choices ahead for all colleges and universities, public and private, but the conversation about tuition should be framed in the context of record state disinvestment in the University. The historic partnership, which kept tuition low for Minnesota’s sons and daughters, has eroded.
  • We will continue to make difficult choices in order to invest in excellence, and we may have to stop doing some things that do not directly benefit our students or our mission.
  • Immediate next steps include the following: 
    • As part of our 2013 legislative budget request, we are undertaking a new partnership with the state of Minnesota.
      • Seeking a two-year freeze in tuition for undergraduate resident students
      • Advancing industry-leading research that will enhance Minnesota’s economy
      • Committing to saving $28 million in the next two years
      • Holding ourselves accountable to policymakers, business partners, and most importantly, students and their families by increasing scholarships and improving graduation rates, among other measures
    • We are updating the University’s outdated job classification system and upgrading our data management system to better track and manage employee data.