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Building at Ivy Tech Bloomington

Young College, Familiar Problem

June 28, 2013

Since it became Indiana’s statewide two-year college system in 2005, Ivy Tech Community College’s enrollment has grown by more than 60,000 students. Along the way the college has been called a national model for statewide efficiency and received praise for close ties to employers.

During that time Ivy Tech has also developed serious financial problems.

College officials say state funding has failed to keep pace with enrollment, which hit 166,000 students last year. The system is now wrestling with how to close a $68 million funding gap, including the possible closure of up to 20 of its 76 campus locations.

“We’ve done all the painless things we can do,” said Thomas J. Snyder, Ivy Tech’s president.

News of Ivy Tech’s money woes has surprised some, given the system’s prominence in national discussions about both college completion and affordability. Also raising a few eyebrows is that the centrally controlled community college is headed by a business-savvy former corporate executive.

Snyder was CEO of an energy company and a major auto parts supplier. At Ivy Tech he has helped lead substantial cost-saving efforts. Snyder has also joined small groups of college presidents whom President Obama and the U.S. Senate have invited to Washington to discuss college costs and productivity.

For his part, Snyder said he’s also surprised that Ivy Tech is facing a fiscal hole this deep. But for years he has warned the state's leaders about the gap between state appropriations and how much it costs the college to educate students.

Ivy Tech’s requested level of state support has long been $3,500 per student (the total cost of education per student is $4,665). Yet the state's current contribution is $2,543, which is up from a $2,198 the previous year. Even before the recession, state funding did not reach Ivy Tech's target levels.

In addition, the college receives little money from the state for its facilities. The system built or expanded 17 campuses without state support. And only 23 campuses receive capital funding, Snyder said.

One reason Ivy Tech has grown quickly is because its strategic plan is aggressively linked to the national push for more Americans to earn college credentials. But that enthusiasm is not shared by the state's legislature, said Snyder.

“It’s unclear to us that attainment is a priority to the General Assembly,” he said.

That would be ironic if accurate, because Indiana can make a case for being ground zero for the national college completion agenda. The state is home to both the Lumina Foundation and Complete College America. But Snyder said that visibility has not helped loosen the state’s purse strings for community college students.

Indiana lags behind the national average on degree attainment rates, according to recent report from Lumina. It ranked 40th on that measure.

The state has recently ramped up its spending on higher education, including Ivy Tech. Teresa Lubbers, Indiana's commissioner for higher education and a former state senator, said Ivy Tech received a $28 million, or 7.5 percent, increase in state support compared to the previous biennium.

"We saw the highest increase in higher education funding in Indiana in three decades," Lubbers said.

'Drastic' Measures

Ivy Tech began assuming its role as a statewide community college system in 2001. That was a major shift, as many two-year degrees were still offered by regional campuses of Indiana and Purdue Universities. Ivy Tech had to do plenty of selling to convince the state’s public universities to hand over their associate degree programs.

Indiana was late to the game in creating community colleges, said Stan Jones, president of Complete College America. As a former Indiana commissioner of higher education and state lawmaker, Jones played a key role in Ivy Tech’s development.

“It was under-resourced from the beginning,” he said, adding that respect for Ivy Tech among state lawmakers is as high as ever.

The consolidation process was completed a few years ago. With one of the most powerful central offices among community college systems, Ivy Tech has been able to do systemwide cost-cutting. It touts $100 million in savings through shared services and outsourcing.

The college has also frozen salaries and spent $40 million on remedial education, which the state does not support financially. Ivy Tech has also eliminated one chancellor position through consolidation.

Lawmakers and business leaders have taken note of the college’s efficiency moves, Snyder said. But that can cut both ways, he said, because some think Ivy Tech can continue to save its way out of tight budget seasons.

That won’t work this time. Ivy Tech has deferred roughly $70 million in necessary spending, college officials said, including $15 million on IT equipment and $13 million for its automotive programs. The college also needs to needs to hire more full-time faculty members and to bulk up its student advising – there are currently 1,200 students for every adviser at Ivy Tech.

To close the gap, Ivy Tech will soon raise tuition by $5 per credit hour. And, more painfully, the system is preparing a cost-benefit analysis for 50 of its locations. The Board of Trustees is mulling whether to close up to 20 campuses, which would be more than 25 percent of the system.

The college is not backing down from its commitment to the completion agenda. And Jones applauds several recent initiatives, including changes to remediation and accelerated associate degree programs. Because of the system’s scale, Jones said it is a primary testing ground for completion-related ideas.

The system is still young, and observers said its footprint is not overextended. Ivy Tech’s campuses are part of the state’s economic development plans. As a result, shuttering some of them will likely hurt the small cities and towns where they are located.

Snyder calls the possible closures a “drastic” but necessary action. He expects the final decision to be made in six months to a year. It will follow another budget debate in the state capitol, which will likely affect the outcome.

Ivy Tech’s leaders have gone on the road to meet with people in each of the state’s rural counties. They have discussed the college’s budget problems and made the case for why public funding for Ivy Tech is good for work force development and the middle class in Indiana.

“We’re going to need their support to keep these sites open,” said Snyder.

 

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