Accountability:
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Cost
Containment
Sum.
of Key Co. Ind.
Board
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The theme of this year's accountability report is cost-containment. I can think of no more important topic. During the last few years students have faced tuition increases that have easily outpaced general rates of inflation. Indeed, since 1981 nationally tuition levels have increased at more than three times the rate of inflation. At the same time, the value of higher education has never been clearer. Multiple studies have demonstrated the significantly enhanced life-time earning power and higher employment rates of college graduates compared to those individuals with only a high school diploma. Consequently, maintaining access to higher education is critical to the further economic success and well-being of the United States. By examining closely those factors which determine the cost of higher education, we can maintain our competitive advantage and ensure that higher learning continues to provide our citizens with the tools to participate fully in our national life. One of the most significant findings of a recent Government Accounting Office (GAO) report was that state appropriations for higher education as a percentage of total institutional revenues fell from more than half to less than half in a 15-year period. The impact upon tuition levels has been dramatic. The GAO study concluded that the rise in tuition nationally during this time period would have been 30 percent less than it was if state funding for higher education had remained constant at the level of support provided in 1980-81. The fact is that increasingly higher education has been forced to compete with other state funding priorities for a limited amount of tax dollars, including: K-12, welfare, Medicare/Medicaid, and corrections. Recently, government at both national and state levels has begun to address this crisis in higher education funding through several means: an increase in direct appropriations; the introduction of tax credits for tuition; and the growth of state-based pre-paid tuition plans. These strategies hold great promise for maintaining access. At the same time, actions such as the creation by Congress of the National Commission on the Cost of Higher Education, recognize the need to understand fully the many factors driving up costs. Accountability
is key to successful cost-containment. Since 1994, New Jersey
has required institutions to provide annual reports to the public
demonstrating their successful stewardship of one of the state's
most A recent study conducted by the New Jersey Commission on Higher Education reported that Rutgers' costs per student were approximately 22% less than our public peers among the prestigious Association of American Universities. Rutgers accomplishes such savings in a variety of ways, as described in the enclosed report. Among these cost containment strategies are the following: • Strategic planning • Private/public partnerships • Increased collaboration with other colleges and universities in the delivery of academic programs, joint research endeavors, the sharing of technology, facilities and libraries, and community development • Periodic program review to eliminate programs that are too costly or have too few enrollments • Options for accelerated student learning to reduce time in college • Use of cost-saving practices and improved efficiency through Total Quality Management principles • External audits • Administrative restructuring These
efforts continue to yield tremendous dividends, including enhanced
national rankings which acknowledge the University's overall
quality. Notwithstanding, it is becoming increasingly difficult
to deliver the level of excellence that characterizes Rutgers
and which the citizens of New Jersey richly deserve. Indeed,
a recent major study, co-chaired by former Governor Thomas H.
Kean, Breaking the Social Contract, painted a bleak picture of
the ability of the United States to continue to provide a world-class
system of higher education in the next century given current
levels of public support. Foremost among its recommendations
is the need for increased and predictable support for higher
education, a conclusion similar to that reached by the New Jersey
Commission on Higher Education in its own study. Only with such
a commitment will higher education continue to deliver on its
promise for future generations of Americans. Francis L. Lawrence |