Letter from the President

A monthly letter from President Martin C. Jischke

On April 27, I had the opportunity to meet with the task force that is studying efficiency in state government under a charge from the Indiana General Assembly. Our discussion focused on higher education, and, while we covered many facets of the topic, I will use today's letter to summarize just a few of them.

Although increases in tuition continue to concern many people, the cost of higher education in Indiana is very low in comparison to other states. Total state appropriations, tuition and fees per full-time equivalent student at Purdue West Lafayette added up to $14,895 in 2001-2002, the most recent year we have for comparative data. This ranked Purdue last in the Big Ten.

Second to last was Indiana University Bloomington at $15,155. As individual institutions, we are very efficient and cost-effective, and I don't believe either Purdue or IU is at the bottom of the Big Ten in terms of the quality of education our students receive.

Determining whether Indiana's system of higher education is cost-effective depends on how we measure efficiency. Do we focus on the number of students enrolled – which is an input – or degrees awarded – the output? At Purdue, we believe our goal is for students to earn degrees, not simply to enroll. If you look at the cost per degree earned, which is an output productivity measurement, the Purdue and IU systems are among the best bargains for our state.

According to the Indiana Commission on Higher Education, each degree earned by a student in the Purdue system costs the state $24,972. Each IU degree costs $27,834. Among the seven state-supported institutions, only the University of Southern Indiana – at $24, 597 – has a lower cost per degree than the two research institutions.

These figures suggest that the state is getting an excellent return on its investment in its two large university systems. Another way to look at this investment return is to measure the impact of a college education on people's earnings. Purdue's Office of Institutional Research calculates that every dollar appropriated to the university results in $8.20 in increased earnings within the state.

This huge economic impact does not take into account the value-added benefits of the research and engagement activities of Purdue. Purdue's undergraduate and graduate programs provide the trained people the state needs for high-technology, advanced manufacturing business and industry. Our research is focused on the needs and potential of the state and the technology transfer that moves that research into the private sector.

All of these factors make it very difficult to calculate precisely how efficient Purdue is or the exact return on the investment the state makes in the university, but considered in the aggregate, the facts show that Indiana, its people and its businesses have a tremendous asset in Purdue. In fact, the higher education system as a whole is one of our most valuable resources.

America's system of higher education is the best in the world, and I think there are four reasons for this excellence:

• Institution autonomy that leads to responsiveness.

• Competition that fosters high quality.

• Diversified resource streams that encourage an entrepreneurial approach to funding.

• And differentiated institutions that give our students a wide range of choices.

These same strengths exist within Indiana, and as we look to tailor the higher education system of the future, it is important that we protect the quality of the institutions. Faced with difficult decisions about funding priorities, some states have reduced their support of higher education. The result has been higher costs to students. In some cases, the states have responded by placing legal limits on tuition. The inevitable result of this approach is a reduction in quality. In the long term, undermining the quality of our colleges and universities would drive our brightest young people out of state, because these individuals and their families understand the value of a first-rate college education, and they won't settle for less.

In the end, the first question we should ask ourselves in planning the future of higher education is this: What does Indiana need for its future, and what do the people want? If we ignore the marketplace in higher education, as in other enterprises, we do so at a considerable risk. National focus groups are now indicating a desire for more choice, not less. The applications statistics at all Purdue campuses indicate more desire for our programs – not less.

Higher education is a growing enterprise. In the last 15 years, Indiana has gone from about 38 percent to 70 percent of high school graduates going into post-secondary education. The real issue is how to fund this growing enterprise and shape it to meet the needs of students, their communities and the state. It's a dynamic system, not a static one. We have an exciting opportunity, and we should make the most of it.