CSU President Tony Frank Q&A: budget challenges, balancing tuition with affordability

Erin Douglas

Editor’s Note: The editorial board for the Rocky Mountain Collegian spoke with CSU President Dr. Tony Frank last week, after the latest CSU Board of Governors meeting. Frank spoke about the challenges of access and affordability in higher education, and how CSU plans to combat these challenges, while the level of state funding for higher education is unknown.

Collegian: Board of Governors is projecting either a 3 percent or 5 percent increase in resident undergraduate tuition if there’s no change in state funding this year. Do you worry that consecutive years of increasing tuition are trending towards making higher education inaccessible?

Ad

Frank: Sure. This is the fundamental issue of American public higher education in our lifetime: Virtually every year we raise tuition almost exclusively at public universities because state funding per student, which is the key part of the arithmetic, is going down.

If you take state funding per student and tuition together, the amount we have to educate a student, and correct them over time for inflation, the amount we have to educate a student is about 4 percent more today than it was 20 years ago; remarkably flat cost of educating students. But, what has changed over that time is the state support per student has gone down dramatically, and tuition has gone up dramatically.

So, what hasn’t really changed is the cost for us as a university is the cost of educating a student. What has changed is who we ask to pay for it. Our society is transferring that cost (away) from all of us collectively. Instead, (we are) saying, ‘If my daughter is going to benefit from her education, then she and I should have to pay for that.’

Somewhere in between is probably some middle ground, but as we’ve been saying for years, we probably have only one to two decades left to figure this out, or else we are going to wind up at a spot where the state support per student will have declined to a point where tuition will be effectively be paying for the entire cost of (higher) education. We will have privatized the world’s greatest system of higher education.

“We probably have only one to two decades left to figure this out, or else… we will have privatized the world’s greatest system of higher education.”

So, is there a concern greater than worrying about tuition, particularly at a land grand university where access is baked into our DNA? I don’t think there is. Then there’s the second half to that question, which is, ‘Why does tuition keep going up if that’s the case?’

So, (the Board of Governors) start the year with a static inflation-only budget—so it says in essence, ‘What if everything goes up only by inflation?’ Embedded with that is the dangerous assumption that everything is fine the way it is now, and that there’s no need to improve. If that’s a starting point, then we go back to the board we say this is our best guess for what the state is going to give.

This year, our best guess right now, and there’s a lot of baseball left before the long bill is signed into law by the governor in may of 2017, but our best guess right now is that the state will be flat in higher education funding. (It) could be higher, depending on what happens in the election and if the general assembly comes back and looks at the hospital provider fee and looks at the state budget. (It) could be lower if the economy changes and the TABOR refunds start to kick in.

But, if it comes in at zero, what we ask ourselves is, ‘Alright, (what) if the state support is at zero, all the expenses stayed the same, and (we adjust for) the inflation?’ That you can do with a pretty minimal tuition increase, you can get there with some internal reallocation. We trim our budgets and you can keep tuition pretty low.

But, if you really want to make progress around salaries, such as faculty salaries which are a very big deal for us to remain competitive around the quality of the institution, then that, which is the single largest part of the expense budget, starts to drive up the tuition cost.

As tuition goes up, certain financial aid models go up directly. So, it’s also the case that not every dollar of tuition increase is available.

Ad

What is the right blend between quality and affordability? We can find less expensive ways to go to college. We can find much more expensive ways to go to college. You all as consumers are constantly making that decision within an education marketplace—Where do you get the most value back?

That’s where the quality factor comes into play, to the extent that if we allow our quality to decline, then all of the sudden there’s the question of if we’re worth the value that we’re charging.

We have a responsibility, I would argue, dating back literally to Lincoln, that says the principle wasn’t that we would come up with the cheapest way for anyone in America to go to college. The principle was that the children of the working class should have the opportunity to go to a great university. So, for a land grant, I think (the budget) is the trickiest balancing act. We’ve got to be affordable (and) we’ve got to assure access. So, right in that middle ground, that sweet spot where we need to stay, that’s the tricky balance, (and) that’s the debate over the next four or five months.

Collegian: If state funding is expected to be relatively flat, do you foresee the University pulling away from relying on state funding? Do you expect in the next 10 years to become financially independent from the state’s funds?

Frank: I hope not. I would tell you I think it’s unlikely that we would return to a major increase in state funding, (at) the levels we’ve seen before. I think we’ve done a pretty poor job communicating with the public over the last 30 years, and so I think most people are looking at higher (education) and saying, ‘Well, if you want me to pay more taxes for this university, why should I do that because tuition is already going up?’ So, there are some real concerns from the public over the financial model.

That’s different from saying that there’s nothing we can do and it’s going to zero. My hope is that we would stay where we are now, and as the population grows and more people go to college, we can maintain that same state funding per student level. If we’re able to do that, I think we can make some good arguments about value propositions and buy ourselves some time to come back to the discussions with the electorate about why (higher education) really does add value.

Places like China and India are investing huge sums of money into education systems based on ours. But in the short term, we have to buy the time to have those arguments. We have to be very transparent about how we spend money and be really good stewards of the public trust. If we can’t win that argument, then we can’t ever get to the next one.

Collegian: What issues are CSU looking towards as this election season comes up? What are you all advocating for in the state legislature?

Frank: In my mind one of the conversations we have with legislators every year is the level of efficiency in Colorado’s higher education system. We often talk about this in a negative way, Colorado is either 49th or 50th, depending on how one calculates the funding of higher education.

(But), per dollar invested by the state, Colorado produces college degrees more efficiently at a cheaper cost than any other state in the country. We’ll try and focus on that aspect of things and pitch it as a partnership (to the state). I like that argument because we are making progress on our retention rates, our graduation rates and the diversity of our student body. We’ve got the research angle and the economic development. We’re connected in every county in the state of Colorado.

“Colorado produces college degrees more efficiently at a cheaper cost than any other state in the country.”

What we try and argue is that if the state puts a little more gas in the tank, we can deliver a whole set of extra outcomes to them.

This year a lot will depend on the election, and whether people believe the hospital provider fee is back in play. The legislature got close to that last year, right down to the very end of the session, and couldn’t push that across. That offers some real opportunities. If that’s not in play, then I think the (conversation) gets a lot tougher.

How do we feel about our institutions taking on additional bond debt to take care of their differed maintenance and infrastructure? We’ve spent over a billion dollars rebuilding this campus. What we saw in the early 2000s was enrollment declining, and pretty dramatically. Our focus groups (said it was a result of) the physical first impression of the campus. We made substantial investments, (and) our campus is in wonderful shape right now. Now, we have enrollment going up.

But, this billion plus dollar asset, (which) belongs to the citizens of Colorado, is under challenge for controlled and differed maintenance. Donors are not particularly excited about putting money into boiler plants. And, neither are the students who sit on the student fee review board. (They are) already paying taxes and tuition, so why should (they) take care of this really basic infrastructure? Shouldn’t the state do that?

But, if the state doesn’t (fund these maintenance issues) then the question is, ‘What do you do about that?’ We’re probably going to have to issue bonded debt to start repairing and dealing with problems in the institution that probably ought to be a public function.

While the finances of higher education are complex, every university in the country is dealing with these issues.

CSU President Tony Frank will spoke at the Fall Address on Aug. 31 (Collegian file photo).
CSU President Tony Frank will spoke at the Fall Address on Aug. 31 (Collegian file photo).

Collegian: CSU has much higher self-reporting rates of mental health conditions than college students nationally; How do you and CSU support mental health in your students?

One of the places we started investing was in mental health programs. I hope that’s part of the reason you’re seeing higher reporting rates—we’re shedding light on the issue. We’ve created an environment where people feel confortable reaching out.

Is what we have in place adequate? No—that’s something I think you’ll hear on me on a variety of fronts. There (are) a lot of areas where we are performing at a very high level relative to other universities. And, that’s not nearly good enough and we need to do better.

“There (are) a lot of areas where we are performing at a very high level… And, that’s not nearly good enough, and we need to do better.”

We (are) in pretty good shape on mental health on this campus—we’ve made a lot of investments, we’ve improved a lot. I have deep respect for the people who run those programs on our campus. Do they need more help? Absolutely. Case loads are high. In a way, we are victims of the success of our society. People with mental health issues are not victimized the way they were when I was your age. That transfers pressure on us because we’ve never had that situation before. Sometimes we respond to it pretty well, but there’s more do out there.

Tony Frank laughing at the beginning of a Board of Governors meeting session. (Tony Villalobos-May| Collegian)
Tony Frank laughing at the beginning of a Board of Governors meeting session in October. (Tony Villalobos-May| Collegian)

Collegian: You’re the chancellor of the CSU System, and also the president of the primary CSU campus here in Fort Collins. How do these roles intercect with each other? Do you see it as a conflict of interest being your own boss? 

Well you could say that I always win my arguments. Are there potential conflicts around it? Sure. (Fort Collins) being by far the largest campus and the global campus being fairly new, the board also has to weigh efficiencies. Does it make sense for us to go out and establish a separate chancellor and all these various positions at the system level? That’s a lot of money and resources going into the system level.

I think before 2008, the positions were always combined. When the last (chancellor) stepped down, (the board) combined the positions again to try to save some resources. I try to watch the conflict piece pretty carefully, and it comes up occasionally.

The most common place it comes up is when we decide what the split is going to be on state money that comes into the system. As long as you’re pretty transparent, you can manage it pretty effectively.

The Collegian editorial board can be reached at news@collegian.com or on Twitter @CSUCollegian.