Edward J. Ray
Oregon State University
October 10, 2013
I thank the President and the other members of the Senate for the invitation to come before you today to discuss the state of the university. I hope you will take away three points from this presentation. First, our creation of an institutional governing board and Strategic Plan 3.0 will position us to choose wisely to address changes we encounter and to initiate others in the years ahead. Second, the financial state of the university is strong. Finally, we are focused as never before on key objectives: the recruitment and retention of diverse and excellent faculty, staff and students, expanding university-industry partnerships and maintaining the momentum of the Campaign for OSU.
John Lennon observed: “Life is what happens to you while you’re busy making other plans.” When we revised our strategic plan in 2008, no one had ever heard of the Great Recession. The Campaign for OSU goal was $625 million. There were no public university boards in Oregon. No one proposed four- year programs for OSU-Cascades or a separate campus there with enrollment of 3,000-5,000 by 2025. There was no state 40-40-20 goal, nor was there an OEIB or a HECC. Sequestration, sesquicentennial and MOOCs were not part of our common parlance. We cannot predict or control many of the changes we will face over the next five years, but we can choose our course wisely.
Strategic Plan 3.0 will help us choose opportunities and mitigate threats by providing a clear framework within which to assess them. I encourage each of you to engage in the creation of Strategic Plan 3.0. As noted on other occasions, a strategic plan is a blueprint or map across time. The revised plan will be completed during winter quarter, and it will help us recognize significant changes and opportunities and choose appropriate responses to them.
Our decision to create our own board of trustees follows directly from the adoption of SB 270 in July, and we fully intend to rely on our board to help us keep our focus on the future and the needs of those we serve. Through their time, energy and financial, social, business and political talents, board members will help us realize our potential, and I am very enthusiastic about working closely with them.
In making the decision to create a board, I listened to you and many others who agreed that we should have a board and on the same timeline as the U of O and PSU. You also told me that OSU must continue to be a catalyst for collaboration at all levels of the Pre-K-20 education continuum, and I will do my best to honor that request.
As anticipated, the 7% increase in state funding proposed by the Governor in his budget message to the legislature was sustained. In fact, the legislature approved an additional $15 million in funding for higher education at the end of the session that helped us to hold our resident undergraduate tuition rate increase to 3.2%. Most recently, the special legislative session provided OUS with an additional $25 million to buy-down tuition increases for the remainder of this academic year and next year. While the Governor proposed flat funding for the statewide public services (SWPS), the legislature responded to discussions with many of our supporters around the state by providing current service level funding for the SWPS. These budget allocations remain conditional, pending legal challenges to the PERS reforms.
The Campaign for OSU raised $104.8 million last year, and research funding, despite sequestration, reached $263 million in FY13. Enrollment growth was 5% last year and will be close to 4.5% this year. Corvallis enrollment is currently estimated at 24,666 for fall quarter. We closed FY13 with a fund balance close to 8%. Looking forward, we expect to implement a salary increase of 3% this January and another 3% in July for a 6% increase in calendar 2014. Recall that we provided $5 million to deal with salary compression problems among tenure-track faculty last year. We brought in 32 new tenure-track faculty this year whose positions were centrally funded, and we expect a fund balance around 9% for FY14.
We believe the financial numbers will look as follows over the next two biennia:
- State funding is expected to be flat or moderately increasing, while federal funding continues to decline. We anticipate continued cost pressures from unfunded increases in the costs of employee retirement and health care benefits.
- Federal research funding is expected to continue to decline slightly unless sequestration is reversed. Industry-related research funding is expected to continue to grow at a healthy rate. Our university-industry partnerships produced $36 million last year, and royalty revenues reached $7.8 million, an OSU record and 80% above the prior year.
- Although enrollment growth is expected to be close to 4.5% this year, we continue to target for enrollment growth in Corvallis of 2-3% for each of the next several years.
- Our fundraising target for the Campaign is $90-110 million this year and beyond. We anticipate the Campaign total will surpass $1 billion this academic year. The Campaign total at the end of September stood at $956.6 million. The total for scholarships and fellowships stood at $162.6 million toward our goal of $180 million.
- Pac-12 media contract revenues from ESPN/FOX, our Pac-12 network partners, the new Rose Bowl agreement and the new College Football Championship agreement will substantially increase funding for athletics.In several years, there will be net funds transferred from athletics to the broader university community for academic and support purposes. Provost Randhawa and Athletic Director Bob DeCarolis and colleagues will determine future uses of those funds.
Together, these factors will position us to provide an average compensation increase for faculty of 3% or more in each of the next several years beyond 2014. We will hire up to 50 new tenure-track faculty colleagues and 24 academic support staff each year.
Furthermore, though we will phase out the tuition plateau over the next few years, we will keep the tuition rate increases below 5%. It is noteworthy that the Fiske Guide to Colleges has identified Oregon State University as a “best buy” for both 2013 and 2014.
Given these and other commitments, university budgets should yield fund balances comfortably within the 5%-15% range established by the OUS board for each of the next few years. While we continue to struggle to secure adequate funding for the statewide public services, we will rally support for those programs this year in advance of the 2015-17 budget session.
For the last two years, we have pursued three key priorities that we must address on a continuous basis for a number of years. Those three areas are:
- Increased recruitment and retention of the brightest and most diverse faculty, staff and students and access and retention for all sub-groups of students through to a common and much higher six-year graduation rate;
- Increased university-industry partnering through sponsored research, new business development and commercialization of research; and
- Exceeding the Campaign for OSU goals and maintaining fundraising momentum.
Last year, I outlined an enrollment plan for OSU to maintain our 25% enrollment share among the public universities as we collectively pursue the state goal of 40-40-20 by 2025. In summary, the plan calls for a limit of 28,000 enrolled students in residence in Corvallis, 3,000-5,000 students at OSU-Cascades, up to 500 students rotating through courses at a Marine Studies Campus in Newport and 5,500 or more degree-seeking students enrolled entirely online.
Preliminary enrollment this year includes an estimated 24,666 students in residence in Corvallis, another 3,417 students enrolled in their majors online and an estimated 990 enrolled at the Cascades Campus or at Central Oregon Community College with degree completion plans at OSU-Cascades. Both the OSU Cascades and online enrollment figures are up 24% from this time last year.
Obviously, the 4.5% increase this year in resident student enrollment in Corvallis exceeds our annual growth goal of 2-3% for this community. We already face legitimate concerns with respect to parking shortages and traffic congestion in Corvallis, the livability of the near-campus communities, the cost of housing for families and the quality of life that we all value so greatly in this community. Our partnership with Mayor Manning and the city council through Collaboration Corvallis is systematically addressing some of these concerns. We have committed more than $300,000 per year to support two full-time staff positions and two GTAs in the Office of Student Conduct to expand the enforcement and educational program capabilities of that office and a full-time staff-person to work with the Greek community off campus.
As noted last year, we need full four-year programs at the Cascades Campus to accommodate students who want to remain in Central Oregon and attend a four-year college and to provide out-of-state and international students with an alternative to Corvallis for completion of their Oregon State University degrees. The OUS board endorsed four-year programs in established degree areas at the Cascades Campus by fall 2015, and, with the strong support of the board, the Governor and key legislators, the legislature approved $16 million in state XI-G and XI-Q bonds and $4 million in XI-F bonds, to be combined with private gifts in excess of $4 million and Cascades Campus reserves, to fund the early development of a separate campus for OSU-Cascades. In fact, we are in the process of acquiring 56 acres for the site of the new four-year OSU-Cascades Campus. Becky Johnson, Jim Middleton, colleagues at OSU-Cascades and COCC and community leaders have made these developments possible.
The proposal for a Marine Studies Campus emerged from a study authored by our Office of Research. While the goal of 500 students pursuing their academic degrees in residence at Newport at any one time – as part of a broader campus concept -- may seem modest, it will require many partners to succeed. Clearly, we will need classroom, laboratory and residence hall capabilities in Newport that do not yet exist. Plans also include future phases of development in Corvallis. I have begun conversations with colleagues at the Hatfield Marine Science Center, the Oregon Aquarium, OMSI, the Oregon Coast Community College, the other community colleges along the coast and regional political and business leaders to move this initiative forward.
The possibilities with respect to hybrid courses and online degrees are not yet fully understood, but I am certain we will exceed the target of 5,500 online degree-seeking students. Our online E-campus program was ranked recently as the Number 4 program in the country among research universities.
For the last ten years, I have argued that OUS had no credible plans to create the built capacity to meet public university education needs by 2025. If one adds together the major building projects involving OSU in the last 10 years, including those in the pipeline, the figures are surprising. We have engaged in 40 major projects with a net worth approaching $1 billion. It is not, however, credible that we will see comparable activity in the next 10 years. I believe much of our future physical capital needs will involve renovating and retrofitting existing facilities and increasing the use of new technologies for delivering instruction. Some see the emergence of MOOCs and companies such as Khan Academy, Coursera and Udacity as products of disruptive technologies threatening the business model for higher education. I know we can appreciate and harness the potential of these technologies to grow our system-wide enrollments and reduce our dependence on new bricks-and-mortar projects.
Students come to us more sophisticated in the use of new learning technologies each year and more accustomed to self-directed learning. We must engage them more effectively with the learning technologies and forms of communication with which they are most comfortable. The potential to expand and deepen learning for students has never been greater, and they are relying on us to prepare them for success in the digital age.
This year, we are launching a long-term concerted effort to raise the first-year retention rate for all first-time students and to attain a higher and common six-year graduation rate for all subgroups of students. To that end, many colleagues helped us design a robust set of initiatives. Becky Warner, Susie Brubaker-Cole, Larry Roper and many others are leading this impressive effort. Let me briefly highlight some of the initiatives.
Live-on Policy: Starting fall term, first-year students attending Oregon State University will be required to live on campus. The research on the residential experience demonstrates that students who live on campus maintain higher GPAs, graduate sooner than their non-residential peers and have a greater affinity to their institution. The Greek community has one year to adopt the new program.
New Student “First and Last Six Weeks” Programming: Also in fall term, OSU is launching a residential curriculum to educate new students on topics such as stress management, mental health, alcohol, personal safety and community living. In the last six weeks of the academic year, programming will focus on how first-year students can transition to off-campus living in Corvallis neighborhoods.
Small-Group Peer Mentoring: The CONNECT Crew will feature small-group peer mentoring during CONNECT orientation. These mentoring opportunities will be repeated several times through fall, winter and spring quarters. Upper-class mentors will help new students understand key academic processes, such as class registration and academic advising, and how new students can discover and engage in co-curricular activities.
Enhanced Living-Learning Communities: There are 10 living-learning and/or thematic housing programs at Oregon State. Approximately 1,480 students, or 32% of those living on campus, will be housed in some form of themed or community living program for 2013-14. Two additional new living-learning centers will be piloted for fall 2014.
Cohort-based Intensive Support Programs: Multiple programs will provide intensive, individual support to students from under-represented backgrounds. Services include summer bridge programs, individual academic counseling, tutoring, workshops and social and community-building events. These support programs, including the Educational Opportunities Program, College Assistance Migrant Program and Student Support Services, typically have retention rates above 90 percent.
Cultural Center Enhancements: OSU will hire four new professional-staff positions to augment programming and support in the university’s four cultural centers. Staff will mentor and advise students, lead community-building programs and support student success.
First-Year Skills Requirement: All first-year students are required to complete foundational academic skills courses in writing, mathematics and speech.
Gateway Course Enhancements: Many large-enrollment, “gateway” courses have enacted research-based curricular reforms to improve student engagement and success rates. Examples include a college algebra course that has replaced passive listening to lectures with more time solving math problems under instructor guidance, an introductory psychology course that has implemented new online modules and self-quizzes to reinforce classroom learning, and general chemistry courses that utilize interactive lecture techniques to check student understanding in real time, using laptops, tablets, cell phones or clickers.
Intrusive Advising for Negative Academic Standing: Freshmen who fail to meet university academic standards (a GPA below 2.0) are required to meet with an academic advisor and are directed to appropriate support services for further intervention and improvement of their academic outcomes.
I encourage you to contact Becky Warner and Susie Brubaker-Cole if you want to learn more about any of these initiatives.
Last year, I highlighted our commitment to move to the front ranks of international and comprehensive research land-grant universities in America, and I noted our remarkable culture of academic collaboration. The steps you have taken already to eliminate 26 low-enrollment academic majors, consolidate colleges, schools, departments and programs from 62 to 42, and create new interdisciplinary degree programs at the undergraduate and graduate levels reflect our ability to make important changes in the academy.
Our drive for excellence at OSU is not based on some abstract concept. We understand that this institution was created to serve others, and we understand that the more exceptional we are at everything we do, the more powerful and positive impact we will have on the lives of those we serve, our students, the people of Oregon, the nation and the world. So, we intend to climb the quality ladder in every dimension in which we operate, understanding that excellence is achieved through diversity.
OSU already attracts more Oregon high school valedictorians and salutatorians than any other university. We are well along in our effort to double enrollment in our Honors College. This year the percentage of high-achieving students in our freshman class is an estimated 39%. At the same time, our enrollment of minority students increased from 15.1% in 2007 to 19.8% last year. Our Discovery Days program in elementary schools, Kaleidoscope College Culture for underserved and/or diverse communities, and our @Beaver VIP on-the-spot admissions program are all helping us to make real progress in this regard. International student enrollment through the support of our INTO OSU partnership reached 8.9% last year and is expected to reach 10% this year, up from 4.7% in 2007.
Last year, we provided central funding for 32 new tenure-track faculty, and for each of the next several years, we expect to fund up to 50 tenure-track faculty positions and 24 academic support positions. And, our faculty and staff diversity reached an all-time high of 11.9% last year. Our Search Advocate Program; the Tenured Faculty Diversity Initiative to hire tenured, diverse faculty; our participation in the Greater Oregon Higher Education Recruitment Consortium, along with our own Dual Career Hiring Initiative, and the work of the Leadership Academy and the Office of Work-Life are all helping us recruit the best and brightest and most diverse faculty and staff.
With regard to facilities, the Student Success Center is now open, as is Eena Haws, the Native American Longhouse and cultural center. We broke ground on the Centro Cultural César Chávez last fall, and we expect to have that center, along with the Asian and Pacific Cultural Center and the Lonnie B. Harris Black Cultural Center, open by fall 2014. The new bookstore has opened, and the renovation of the Memorial Union and construction of the Student Experience Center began this past summer. Austin Hall is also under construction. Our new track and field and basketball practice facilities are also open for use. We anticipate bond sales in the next year to contribute to construction of a new $65 million classroom building and a $40 million chemical, biological and environmental engineering building and towards $24 million in expenses to create a new campus for OSU-Cascades.
Research and Our Economic Impact
As noted earlier, sequestration reduced our federal research grants and contracts last year by 12.8%, but total research grants and contracts still reached $263 million dollars. Some of the loss in federal funding was offset by the continuing growth of university-industry research to $36 million. $7.8 million of that total came from record royalty revenues that were 80% above the previous year. Ron Adams, executive associate vice president for research, leads the OSU Advantage program to provide businesses with one-stop shopping for partnering with OSU. The Advantage program includes the OSU Venture Accelerator, which is linked to the Oregon Regional Accelerator and Innovation Network (RAIN) for economic development in the South Willamette Valley region. RAIN has received $3.75 million in operating and capital support from the Oregon legislature.
The Campaign for OSU
As noted earlier, the Campaign for OSU has now raised $956.6 million toward the $1 billion goal set for the end of calendar year 2014. This includes $162.6 million for student scholarships and fellowships toward a final campaign goal of $180 million. We have received 164 gifts of $1 million or more during the campaign, and more than 100,000 households have now contributed to the campaign. This is an exceptional accomplishment and a strong indication of the potential strength of future fundraising efforts by the university. We intend to close the campaign on a strong note. Then we will focus our fundraising on advancing the objectives of Strategic Plan 3.0. We also expect to continue to develop our internationalization, alumni development and fundraising capabilities throughout the world and particularly the Pacific Rim, with a focus on China/Hong Kong, Indonesia, Korea, Thailand and Taiwan.
Satchel Paige said: “Don’t look back. Something might be gaining on you.” There is a lot to celebrate in our collective accomplishments over the last five years, but we also learned that looking ahead we do not know how we will be tested over the next five years or what opportunities will be presented. Despite past surprises, our strategic planning effort and the creativity and resilience of this remarkable community enabled us to advance the mission of this great university. Strategic Plan 3.0 and the establishment of a university board will strengthen our capacity to look forward, see change, choose a path, and keep moving toward even greater success for our students and those we serve. Whatever the future brings, it is an honor and a pleasure for me to work with you in pursuit of what I am certain will be an excellent adventure. Thank you.
“Beautiful Boy (Darling Boy)” in the 1980 album, Double Fantasy.