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Changes under way to help Penn State position for the future

4/5/2010 —

University Park, Pa. -- As Penn State looks ahead to the future, its administrators are wrestling with what it means to be a public university at a time when public support for higher education is waning.

Over the past 10 years, higher education in Pennsylvania has received a 4.8 percent increase in overall funding, while the state budget itself has increased more than 36 percent and basic education has seen a rise of almost 49 percent in that same time period.

But the financial aspect is not the only area where higher education comes up short. Speaking to a group of faculty, staff and administrators during a recent presentation on the University's strategic plan, Penn State Provost Rod Erickson indicated that in the court of public opinion, higher education also is losing ground.

Erickson said highlights from a series of national surveys tracking public attitudes on higher education show that many Americans are skeptical about whether colleges and universities are doing all they can to control costs and keep tuition affordable.

"Six in 10 Americans think that quality higher education can be delivered at a lower cost," Erickson said. "They also think we can teach a lot more students without lowering quality or raising prices.”

These public attitudes combined with stagnant state aid and the bleak economic picture faced by the state and nation are creating tremendous challenges for Penn State. Add to that the uncertainty surrounding future federal stimulus money and a spike in mandated contributions to the State Employees' Retirement System expected to cost the University millions of dollars, and Erickson said the University cannot continue with "business as usual."

"Every aspect of the University must be scrutinized for cost savings and improvements without exception," he said. "This is really an opportunity to create new approaches and growth. We want to introduce an investment model for new initiatives and efficiencies. We will look at hard data and see where changes make sense."

To help conduct focused analyses of academic and administrative programs and operations, an Academic Programs and Administrative Services Core Council chaired by Erickson has been formed along with three subcommittees (see http://live.psu.edu/story/44950 online). The groups have been tasked with the University-wide goal of finding $10 million annually in both permanent, long-term budgetary savings and short-term cuts that can be reinvested in support of the goals and priorities identified in Penn State's five-year strategic plan found at http://strategicplan.psu.edu/index.php online.

Over the last two decades, Penn State has reallocated nearly $200 million that has been strategically reinvested in academic areas. These aggressive cost-saving efforts have directly benefited students in the form of lower tuition increases.

"The financial challenges facing universities today are unprecedented," said Albert Horvath, senior vice president for finance and business and a member of the Core Council. "There are unavoidable rising costs in everything from technology to libraries materials, health care benefits, insurance costs, food costs, utilities and more, and we know families are facing these same issues at home.

"We are committed to finding every possible way to reduce expenses and maintain quality through greater operating efficiencies," he said. "We hope our employees will continue to help Penn State identify those savings."

Horvath said the Core Council will implement any changes thoughtfully through careful analysis of impact and in consultation with important stakeholders.

Both Horvath and Erickson consider this a "watershed" for the University, which can no longer afford to be "all things to all people."

"We are not in a position to support the 575 programs we have or the more than 100 research institutes and centers," Erickson said. "This will not be easy, but we need to use our resources in a way that will create a better university for our students and a more prestigious institution for our researchers."

The Core Council is expected to continue its work for at least 18 months, according to Erickson, who said that changes already are being made and will continue to be rolled out as they are identified. The provost has held a number of meetings with academic and administrative leaders and also held a session in February through the Office of Institutional Planning and Assessment for anyone interested in learning more.

Erickson is planning to hold an open meeting for faculty from 3:30 to 5 p.m. on Monday, April 12, in 508 Rider Building, University Park. The meeting is expected to cover the implementation of the strategic plan and the process for the selected review of academic program and administrative services. Campus locations other than University Park can connect through polycom by registering with the Office of Planning and Institutional Assessment at 814-863-8721.

"This process is not going to culminate in a report that sits on a shelf. This will be an ongoing process. As solid recommendations are made, we want to implement them," he said. "This is about being a stronger institution committed to excellence. Our decisions will be data-driven, informed and as collaborative as possible."

Members of the Core Council encourage anyone with suggestions for cost savings to contact psupia@psu.edu.

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