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2014-15 Finance Background & Budget Recommendations

2014-15 Finance Background & Budget Recommendations. Tennessee Higher Education Commission. November 14, 2013. Tennessee Higher Education Commission. Cost Effectiveness. Increasing Efficiency. Inflation Adjusted.

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2014-15 Finance Background & Budget Recommendations

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  1. 2014-15 Finance Background & Budget Recommendations Tennessee Higher Education Commission November 14, 2013 Tennessee Higher Education Commission

  2. Cost Effectiveness

  3. Increasing Efficiency Inflation Adjusted - Higher education revenues have shifted dramatically over the last 25 years away from taxpayer support and towards student tuition revenue. - Total revenues per graduate, though, have fallen substantially as institutions are spending less money to graduate a student.

  4. Operating State Appropriations • $29.6M to fund outcomes formula growth • $11.6M for non-formula units • $31.7M for TSAA financial aid • $16.5M for TCAT/CC equipment (non-recurring)

  5. Operating State Appropriations • Largest state appropriations increase: • Roane State Community College • University of TN at Martin • Chattanooga Job Placement Data

  6. Breakdown of Component Parts

  7. Community College Outcomes Changes

  8. University Outcomes Changes

  9. Breakdown of Weighted Outcomes Share

  10. Breakdown of Weighted Outcomes Share

  11. Productivity Drives Funding Weighted Outcomes Change State Appropriations Recommendation Correlation = 0.91

  12. State Appropriation Change Due to Formula

  13. State Appropriation Change Due to Formula

  14. State Appropriation Change Due to Formula

  15. State Appropriation Change Due to Formula

  16. Cumulative Change in Appropriations at Universities Due to Formula

  17. Cumulative Change in Appropriations at Community Colleges Due to Formula

  18. Share of Outcomes-Based Formula

  19. Percent Funded by Institution The Evolution of the Hold Harmless Policy

  20. Percent Funded by Institution The Hold Harmless Policy was Phased Out from 2011-12 to 2013-14

  21. Financial Aid Profile • Merit-based lottery scholarship program = $312M • Need-based grant (TSAA) = $64M • State grant aid = $1,280/UG FTE (3rd in US) • Average debt = $20,700 (6th lowest in US) • Cohort default rate = 5.7% (nation = 9.1%) Sources: TN data, NASSGAP, Project on Student Debt, US Dept. of Education

  22. Student Financial Aid Sources: THEC, TSAC, US Department of Education Out of 261,000 students in public higher education, over 122,000 received a Pell grant and nearly 88,000 benefited from the lottery program.

  23. Student Financial Aid Sources: THEC, TSAC, US Department of Education *University Tuition Revenue is an estimate of undergraduate students only. In 2011-12, public higher education collected $1.19 billion in gross tuition revenue, which was offset by $727 million in federal and state grants.

  24. Median EFC by Academic Profile, Full-time Community College Students $5,600 EFC is roughly equivalent to a $60,000 AGI

  25. Median EFC by Academic Profile, Full-time University Undergraduates

  26. Student Borrowing Rates NOTE: Southwest and Jackson do not participate in the Federal loan program. Any loans in the data are private loans.

  27. Undergraduate Borrowing Rates

  28. Tuition & Fees Comparison

  29. 2014-15 Tuition Recommendation • 2-4% (all sectors) • Accompanies $29.6M operating increase • Tuition model guidance has macro inflation factor that includes salary COLA.

  30. Capital Outlay Projects Background • Projects initiated by the institution • UT and TBR establish system priorities • THEC merges those priorities into a unified list • Respect priority order within system • Renovations over new space • CCTA/D55 links

  31. Capital Outlay Funding History

  32. Capital Maintenance Funding History

  33. Capital Outlay Recommendation • $213M for seven projects • Each project has a matching component • Began in 2012-13 • 5-25% match depending on sector • Private gifts, grants and other resources

  34. Capital Outlay Life Cycle The 2014-15 Capital Outlay recommended projects were first identified by the respective system years ago. The first year the project emerged as a UT or TBR priority…

  35. Capital Maintenance Recommendation • $115M for 71 projects; • $69M at TBR for 60 projects; • $46M at UT for 11 projects; • This 60%/40% split mirrors the TBR/UT infrastructure footprints.

  36. Final Observations • Growth in institutional outcomes • Outcomes formula data • Affordability • Financial aid system reform

  37. 2014-15 Finance Background & Budget Recommendations Tennessee Higher Education Commission November 14, 2013 Tennessee Higher Education Commission

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