Explosive Enrollment with Extreme Budget Cuts

Explosive Enrollment with Extreme Budget Cuts Academic Resources Conference San Diego, CA May 31 – June 1, 2011 Lori Varlotta Vice President for Student Affairs, Sacramento State

CSU Operating Budget The bulk of the CSU operating budget is from: • State allocation • Tuition fees and other campus fees

California State Budget and CSU Allocations • CA State budget is pressed beyond its capacity • Results in allocations to the CSU that are both volatile and vulnerable

State Allocations to the CSU • Have fluctuated in the $2-3 Billion range since AY 1999-2000 • Reached a high of ~$3B in 2007-2008 • Are expected to reach a low of ~$2.3B or lower in 2011-2012, nearly the same level of funding as 99-00

CSU State Allocation In Billions $2.97 $2.87 $2.79 $2.68 $2.77 $2.61 $2.62 $2.49 $2.47 $2.45 $2.35 $2.29* $2.25 *projected Amounts include federal American Recovery and Reinvestment Act (ARRA) funds ($717.5 Million in 08/09 and $106 Million in 10/11) 99 - 00 00 - 01 01 - 02 02 - 03 03 - 04 04 - 05 05 - 06 06 - 07 07 - 08 08 - 09 09 - 10 10 - 11 11 - 12

Decreasing Allocations Increasing Tuition and Fees • As state allocations go down, student fees and tuition go up to offset the loss of revenue. • State allocations are based on supporting X students in a given year, but campuses also support continuing students. • Actual enrollment numbers don’t change as readily as state allocation dollars, or CSU enrollment targets. • In 98-99, the state funded ~80% of fees per student. • In 10-11, the state funds ~60% of fees per student.

Declining State Support Forces More Reliance on Student Fees (in 2011 Constant Dollars) $14,000 Tuition Fees and Other Fees less Financial Aid State Funds $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 1998 - 99 1999 - 00 2005 - 06 2007 - 08 2009 - 10 2010 - 11 2011 - 12

State Allocations and Enrollment The relationship between state allocations to the CSU and enrollment should be straightforward: Theoretically, CSU state allocations should dictate the number of students for which the system can provide classes, services, and support. This number, in turn, should help identify both system and campus “FTE Targets.”

Allocation and Enrollment Challenges • Enrollment responds to state allocation fluctuations, but cannot change as rapidly; the enrollment faucet takes time to “turn on” and “turn off” • As the following graph shows, enrollment has increased since 1999-2000 even though allocations are projected to be back at 1999-2000 levels in 2011-2012. • Enrolled ~280,000 students in 99-00 with an allocation of $2.25B • This year, the CSU enrolled ~340,000 students with nearly the same allocation it received in 1999-2000

357,223 State Allocation and Enrollment 339,873 321,339 $2.97 281,782 $2.77 $2.45 $2.29* $2.25 *projected 99 - 00 00 - 01 01 - 02 02 - 03 03 - 04 04 - 05 05 - 06 06 - 07 07 - 08 08 - 09 09 - 10 10 - 11 11 - 12 FTES in 2010-11 is budgeted enrollment rather than actual Full Time Equivalent Students (FTES) CSU State Allocation (in billions)

CSU’s Recent Response to these Challenges Educating 60,000 more students with the same allocation as a decade ago is not a sustainable practice. Thus, the Chancellor’s Office recently has started to: • Alter or “right-size” system and campus enrollment targets (on late notice and very short order) to align with the rapidly changing state budget allocations. • In the summer of 2010, for example, CSU campuses were asked at the last minute to shrink enrollment. By September, we were asked to grow it back again.

Changing Budgets, Changing Targets • While enrollment stayed relatively high in 08-09 and 09-10, the CSU had the state funding “rug” pulled out from under it in these same years. • By AY 2009-2010, the CSU was experiencing a continuing budget shortfall—supporting ~340,000 students on a little over $2.3B. • This situation was untenable—the biggest disparity between enrollment and funding in recent history—so the CSU asked its campuses to cut total enrollment by nearly 11% - to 310,317 FTEs for AY 2010-2011.

Changing Budgets, Changing Targets • This call to cut enrollment by ~11% came in Summer 2010 • Ironically, state allocations increase from ~$2.35B in 08-09 to ~$2.77B in 09-10 • This increase was due to one time federal stimulus money received in Fall 2010, halfway through the academic year

Changing Budgets, Changing Targets • Based on the newly increased budget, the CSU asked campuses to increase enrollment to 339,873 total FTEs—a nearly 9% increase • This call came during Fall 2010, halfway through the academic year and well after the beginning of the semester • This is problematic / challenging for several reasons

Changing Budgets, Changing Targets Problems / challenges: • As mentioned, the enrollment faucet is difficult to “turn on,” and “turn off” - it doesn’t change nearly as quickly as the budget can (and does) • Although funding allocations may be “one time,” students are not; once they’re enrolled, the system must support them for 4 – 6 years, perhaps more • Supporting students at lower and lower dollar amounts per FTE has a tangible effect on their educational experience

What’s next? 2011 – 2012 Budget The following information regarding the 2011-2012 is based on an update released by the Chancellor’s Office on May 16, 2011. • Earlier this year, legislature approved Gov. Brown’s $500M reduction to the CSU • The cut will increase to $1B if the existing level of temporary taxes are not extended • Extensions depend on a bipartisan vote of the legislature • Subject to final approval by voters

Managing the $500M cut The cut will be addressed (like most recent reductions) by a combination of lower enrollments and higher fees. • Enroll ~10,ooo fewer students this fall • Apply an estimated $146M from already-approved tuition fee increase • Reduce campus budgets by $281M • Cut Chancellor’s Office budget by ~$11M

Contingency Plan—Deeper Cuts • The CSU recently outlined a contingency plan to address a potential $1B cut • “Wait list” applications for Winter and Spring 2012, estimating it could turn away 20,000 qualified applicants • Possibly authorize an additional 32% tuition fee increase (on top of 10% already approved for Fall 2011) • Amount of increase will depend on final state budget • Possible $1,566 increase, for total tuition fee of $6,450/yr

Strategic Enrollment Management During Unpredictable Times Example: Sacramento State Academic Year 2010-2011

Sac State’s story: a Caveat • The Sacramento State example presented here is not meant to be a be-all-end-all model, or a definitive answer to the question of enrollment management in times of crisis. • It is an enrollment process that takes into account and is aware of many variables, and a useful framework for ongoing discussion.

Sac State 2010-11 Enrollment According to its state allocations, Sacramento State’s FTES target changed many times as well. • FTES target by date: • July: 20,482 • Early Sept: 21,044 • Sept 27: 21,265 • Oct 13 (am): 22,098 • Oct 13 (pm): 22,727

Hitting a moving target Hitting such a moving target was extremely difficult for several reasons. • First, required building multiple enrollment plans in Spring 2010. • Then, required campuses to scrap those plans. • Lastly, required campuses to create a new plan to help the campus hit its “stretch” target.

Stretch target Hitting the final stretch goal assigned for Spring 2011 would mean enrolling an additional 3,000 students, 2500 more than anticipated based on 2010-11 planning. Remember, going into Summer 2010, the CSU had been asked to shrink enrollment dramatically. Now, only months later, it was asked to grow again nearly as dramatically.

Commentary • Changes of this magnitude and frequency have literally been described by administrators outside the state as: • “Enrollment chaos” • “Incomprehensible” • “A cruel joke” • “An attempt to add CSU enrollment officers to the endangered species list”

Imposing Order on the Chaos To address the demands of these constantly changing targets, Sacramento State has taken a deliberate and planned approach. • Studied the targets • Consulted the President • Decided not tochase the stretch target—the highest number given from the Chancellor’s Office

Why not chase the stretch? • It would prompt too many admissions exceptions, which could possibly erode recent gains in retention and graduation rates • Could position Sac State badly for future budget cuts Rather than chase the stretch goal, Sac State stuck with the second most aggressive target—slightly lower than the stretch—to best position the campus for short and long term goals.

Approaches in other CSUs • In general, sister campuses chose one of two broad approaches: • Admit and enroll as many students as possible for Spring 2011 • Stay the course

“Going hog-wild” • Problems with admitting and enrolling as many students as possible in Spring 2010, in both short- and long-term • On some campuses, relaxes admission standards and policies and exceeds allowable exceptions • Suggests campuses can teach more students than the state subsidizes • Diminishes graduation and retention rates • Stretch goal is unlikely to hold steady

Going over the FTE cap • Suggests that the college can actually handle more students than the state subsidizes • Opens the door for deeper cuts in the eyes of a budget-strapped legislature • Sends the wrong message in the current climate

Short-term: shooting for a mid-year stretch goal that may not hold • If a campus over enrolls in this volatile climate, it may be forced to turn around and cut immediately • This could mean that some campuses may be forced to significantly restrict admissions that following fall

“Staying the Course” Some campuses did little or nothing in response to the changing FTE targets, and in general can be described as: • Impacted campuses that have ready access to large numbers of qualified students • Campuses that lack the capacity to reconfigure their plans and implementation strategies on short notice

Campus Impaction • Some impacted CSU campuses have pent-up demand by qualified, out-of-region students • Such campuses only need to “turn the enrollment spigot” a tiny bit, and expend little effort to significantly affect the number of students they admit and enroll • Sac State is not at that point; it will be impacted for the first time in Fall 2011

“Staying the course” as a default • Not all campuses made a conscious choice to stay the course • Some did not have the enrollment capacity or expertise to turn on a dime • Their position was not an act of defiance, but rather one of resignation • Sac State was not forced to go this route • Many divisions made choices to use their limited resources to support enrollment efforts

Enrollment Support “trade-offs” Sacramento State used cross-divisional resources to help support enrollment in these ways: • Bolstered communication with current and prospective students via the portal and My Sac State • Maintained its commitment to: • Process student applications, transcripts, and financial aid packages in a timely manner • Orient and advise new students • Construct feasible course schedules for them to pursue

Sac State’s approach: neither “all” or “nothing” • Sac State’s enrollment management strategy is neither of the former two: the University neither seeks to enroll as many students as it possibly can, nor to stand pat • Rather it is strategic, deliberate, and anticipatory

Strategic Enrollment Process Allows campuses to respond to nearly any target on short notice: steady, increased, or decreased Builds multiple scenarios in advance Collaborates with other campus entities

Multiple Enrollment Scenarios Each scenario is a multifaceted one, built upon preconstructed layers that estimate: • Attrition • FTE continuation rate • The right number of new students to admit

Collaboration A strategic enrollment process should include collective effort from the campus community. • Enrollment management team • Provost • Deans, associate deans, department chairs • IRT • OIR

Acknowledgements The graphs in slides numbers 5, 7, and 10 came from a CSU Chancellor’s Office Budget Subcommittee meeting on January 26, 2011.

Explosive Enrollment with Extreme Budget Cuts