Fast-growing Ivy Tech feeling pain of funding cuts

January 26, 2010

Hoosiers enrolling at fast-growing Ivy Tech Community College might find it increasingly difficult to get the classes they want at the times they prefer.

Blame burgeoning enrollment and funding cuts to the seven state university systems, carried out late last month by the Indiana Higher Education Commission.

Universities saw their funding reduced by a total of $150 million due to plummeting state tax revenue. It marked the first time Indiana tied reductions in higher education funding to criteria such as graduation rates and per-student spending. In any other year, the schools would have received an across-the-board, 5.5-percent decrease.

Cuts ranged from 3.5 percent at Ivy Tech to a high of 6.6 percent at Indiana State University. Ivy Tech’s reduction amounts to about $10 million of its $350 million budget.

While none of the seven systems can be pleased with another round of cuts—the General Assembly collectively trimmed their budgets 4.4 percent just six months ago—Ivy Tech’s reduction is particularly painful given its growth.

Enrollment at the university’s 23 campuses across the state increased 33 percent within the past year, to 118,500 students for the spring semester, as more unemployed Hoosiers are returning to the classroom as they seek new careers.

By comparison, Indiana University had 98,999 students enrolled statewide this spring, up 1.9 percent from a year ago, according to preliminary figures released Jan. 21.

Ivy Tech’s enrollment explosion, coupled with the latest budget cuts, has lowered per-student spending to $2,550, 18 percent less than two years ago.

The drop in the amount spent on each student accurately portrays the university’s economic challenges, said President Tom Snyder, who likened Ivy Tech to a fast-growing suburban school district.

“That’s pretty dramatic,” he said of the spending decline. “But at the same time, we’ve been challenged by the Commission for Higher Education to look for ways to accommodate as many students as we can because of the economic situation.”

Jason Bearce, associate commissioner of the higher education commission, acknowledged Ivy Tech’s challenge was a factor in the agency’s decision to cut its budget by just 3.5 percent.

“We were cognizant of the fact that Ivy Tech is growing by leaps and bounds,” Bearce said. “But the fact of the matter is, we had to cut $150 million system-wide and we had to spread it across the institutions. So they’re all feeling the pain.”

The budget reductions come at the same time Ivy Tech is launching a new strategic plan, dubbed Accelerating Greatness by 2013. The goals of the plan, still in the early stages, should not be affected, though, because leaders developed it with the state’s financial troubles in mind, the university said. 

Ivy Tech has no plans to cap enrollment or hike tuition, which could damage the university’s reputation as an inexpensive alternative to four-year schools, Snyder said.

But Ivy Tech already is limiting the number of new classes it is adding throughout the state, and it is delaying the hiring of more full-time faculty.

Snyder’s push to provide more counseling and advising services to students also has been put on hold. He said that delay ultimately could do the most damage to the university.

“We think it’s going to cause us to not make as much progress in our graduation rates as we would like.”

Now, about 10 percent of Ivy Tech’s first-time, full-time students earn an associate’s degree in three years. That’s much lower than the national rate of roughly 30 percent, according to federal data.

The Commission for Higher Education wants all the universities to improve their on-time graduation rates and, as a result, be more efficient with their money.

But schools like Ivy Tech that award associate’s degrees and have a lot of non-traditional students prefer to measure success differently.

Ivy Tech said 43.5 percent of students enrolled in 2002 either graduated, transferred or were still enrolled in 2008. The university uses a six-year window because its students typically are working full- or part-time, which causes them to be enrolled for a longer period of time than traditional students. 

In light of the recent budget cuts, Ivy Tech already is cutting costs by reducing non-personnel expenses by 10 percent, establishing a procurement department to streamline purchases and outsourcing its bookstore operations.

Colleges across the country are facing similar challenges, said Dennis Jones, president of the Boulder, Colo.-based National Center for Higher Education Management Systems. The not-for-profit’s mission is to improve strategic decision-making for both the institutions and the states.

“The bigger issue is, there’s just no strategic framework that links the college-attainment goals to a coherent financial policy,” Jones said.

Meanwhile, Snyder understands the state’s financial predicament and that universities now more than ever need to keep expenses in check.

“We have to re-engineer ourselves first before we can look to the state for additional money,” he said.


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