One of the most difficult challenges for a state-related university is to reconcile the quality of education with accessibility and affordability to students. This issue is especially important for a land-grant institution. Purdue was founded on the ideal that the opportunity for excellent higher education should be available to everyone with the ability and the desire to earn a degree.
With each new budget year, Purdue confronts that challenge, and throughout its history it has been extraordinarily successful, because it has managed itself carefully -- directing resources toward outstanding faculty, who are the key to true excellence. But as we prepare for the 1998-99 fiscal year, the University is at a crossroads.
The cost of educating students at Purdue -- as at other public universities -- is borne primarily by two revenue streams: an annual appropriation from the state and the fees paid by students. Currently, Purdue's student fees make it highly accessible. Only two Big Ten institutions -- Wisconsin and Iowa -- charge lower tuition to their in-state students. However, Purdue's state appropriation per full-time student also is among the lowest. When the two factors are combined, Purdue operates with fewer resources per full-time student than any other institution in the Big Ten.
Purdue's operating revenue per student (using 1995-96 data from Research Associates of Washington) is $11,973. This figure compares to $20,468 at the University of Michigan. The difference between the two institutions in total revenue adds up to more than $274 million each year. At the lower end of the Big Ten, the University of Illinois is able to spend $12,572 per student, which gives that university a $19.3 million annual advantage over Purdue.
I certainly don't believe that universities should engage in competitive spending, but the fact is that we do compete with one another for outstanding personnel -- especially faculty -- and for other resources. Purdue's quality is a major factor in our state's economic health and in the welfare of our people, and both will suffer unless we direct greater resources to the University.
On March 27, the Board of Trustees met to deal with this challenge. The meeting actually was the culmination of a series of meetings, consultation, and seminars that involved administrators, faculty members, students, trustees, and state officials. The final result was decisive action on student fees designed to protect the quality of the University.
Beginning next fall, we will ask students to pay 4.9 percent more in basic fees, adding up to $164 per student per year. In addition, the technology fee paid by all students will increase from $32 to $64 annually. Engineering students for the first time will pay a differential fee of $200 a year to help cover the extraordinary cost of their curriculum.
Although these fee increases will be offset significantly by enhancements in financial aid, they concern me, because they are greater than the current inflation rate. However, I believe our first responsibility is to preserve and enhance the quality of a Purdue degree. After careful review of the facts, our Trustees agreed with the recommendation, and student leaders who were included in the discussions concurred. They understand that Purdue's competitive position in a rigorous national market has a direct impact on the value of their degrees.
Although the new fee structure is a first step in addressing some serious quality issues, it will not solve the problem. Of the eight states with Big Ten institutions, only one invests less per student than Indiana, and student fees in that state are significantly higher. In 1981, state revenues paid more than 70 percent of the cost of each student's education on the West Lafayette campus. That percentage now has fallen below 60 percent. During the same period, the students' share has increased from about 27 percent to about 45 percent.
While competition for outstanding faculty has grown more intense, the costs of new technologies have added a new factor to the equation. State-of-the art laboratory and classroom equipment changes rapidly and requires specialized expertise to maintain and operate. We must recognize it as an ongoing budget presence.
The quality of our universities and the future of our state are linked. We must commit ourselves to investing in the quality of both.
I was pleased to participate in highly successful academic reviews on two Purdue campuses in March. At Purdue Calumet, Chancellor Jim Yackel, his faculty, and staff are doing an outstanding job of providing community-based education and service. The campus is making plans to become the home of a new Challenger center to enhance children's understanding of science and mathematics.
In West Lafayette, School of Veterinary Medicine faculty shared with us their plans for an exciting new curriculum that promises to transform the education process for their students.