Return on Investment
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IN THIS ISSUE PP. 1-2 ROI in Higher Education PP. 3 State Funding PP. 4-5 2020 Predictions/Trends PP. 6 Grant Activity & Metrics PP. 7-11 OFFICE OF ANALYTICS NEWSLETTER Funding Opportunities KENT STATE UNIVERSITY RETURN ON INVESTMENT AT STARK Kent State University at Stark ranks in the top 25% of all U.S. colleges and universities in long-term value. (1) VOLUME 1 A recent study from Georgetown University’s Center on Education ISSUE 5 and the Workforce ranks colleges and universities by return on investment using the US Department of Education’s College JANUARY 2020 Scorecard data. The study determines net present value (NPV) at different benchmarks, 10, 15, 20, 30 and 40 years. Diane Walker Director of Analytics and CRM The median return on investment (ROI) for Kent State Stark 132K Main Hall graduates is $888,000 after 40 years. Kent State Stark ranked: [email protected] 330-244-3256 • 59th among 225 Ohio colleges and universities Theresa Ford Sr. Grants Administrator • 43rd among 101 Ohio 4-year colleges and universities 123F Science & Nursing Building [email protected] 330-244-3580 • 1,064th among 4,500 US colleges and universities. www.kent.edu/stark/analytics-office (1) Source: Georgetown University Center on Education and the Workforce, A First Try at ROI: Ranking 4,500 Colleges, 2019. Figure 1 Return on Investment (ROI) 40-Year NPV of Kent State Stark and Competitor Institutions Figure 1 displays the median 40-year net present value (NPV) of higher 0 500,000 1,000,000 1,500,000 education institutions that have a high Public 4-Year Competitors 0 market share or are increasing their Miami University-Oxford $967,000 market share in the primary, Ohio State University $961,000 secondary, tertiary, and potential University of Toledo $924,000 Kent State University at Geauga $889,000 markets of Kent State Stark. Kent State University at Stark $888,000 Kent State University at Trumbull $888,000 NPV is a measure for evaluating the Kent State University at Tuscarawas $888,000 worth of a college degree. Net present Kent State University at East… $887,000 value provides an estimate of how Kent State University at Salem $887,000 Cleveland State University $859,000 future earnings are valued in the University of Cincinnati $852,000 present. It represents the long-term Bowling Green State University $824,000 financial value or long-term return on Ohio University $819,000 investment (ROI). It is calculated based Kent State University at Kent $775,000 on the total cost of college, program Youngstown State University $761,000 University of Akron $753,000 length, cash flow, and median earnings Community College Competitors 0 at six, eight, and ten years after University of Akron-Wayne College $855,000 entering the institution. (See Appendix Stark State College $756,000 A, pp. 19-23 in the data source.) Lorain County Community College $720,000 Cuyahoga Community College $639,000 Private Competitors 0 Kent State Stark’s net present value of Aultman College of Nursing and… $1,427,000 $888,000 is fifth among its public 4- Walsh University $907,000 year competitor institutions, first University of Mount Union $865,000 among its community college Malone University $849,000 competitors, and third among its Source: Georgetown University Center on Education and the Workforce, A First Try at private, Stark County competitors ROI: Ranking 4,500 Colleges, 2019. (Figure 1). The net present value is also provided Figure 2 for nine peer institutions of Kent State 40-Year NPV of Kent State Stark and Peer Institutions Stark located in Indiana, Michigan, $0 $400,000 $800,000 $1,200,000 Ohio, Pennsylvania, and Wisconsin. (Figure 2) NPVs among peers range University of Pittsburgh-Greensburg $1,123,000 from $782,000 at Indiana University- Ohio State University-Newark $1,073,000 Penn State University-Abington $1,064,000 Northwest and $1,123,000 at Miami University-Hamilton $1,017,000 University of Pittsburgh-Greensburg. University of Cincinnati-Blue Ash $985,000 Kent State Stark ranks sixth among its Kent State University at Stark $888,000 peer group of colleges and universities. University of Wisconsin-Parkside $847,000 Lake Superior State University $792,000 To see the NPV for a college of interest, Indiana University-Kokomo $786,000 go to the Georgetown University Indiana University-Northwest $782,000 Center on Education and the Workforce “Ranking ROI of 4,500 US Source: Georgetown University Center on Education and the Workforce, A First Try at ROI: Ranking 4,500 Colleges, 2019. Colleges and Universities” website. 2 Percent Change from State’s Peak Higher Education STATE FUNDING Appropriation During the Great Recession • In fiscal year 2020, Ohio increased spending on higher Table 1 education 4.3% from $2.3 billion in 2019 to $2.4 billion. Peak Fiscal % Year State Change The increase was welcome from the previous year’s 2009 Utah 48.4% modest annual decline of 0.1%. 2009 California 43.3% 2011 Massachusetts 38.6% • Ohio is one of thirteen states that continues to fund 2010 Colorado 33.7% higher education below its levels prior to the Great 2011 Florida 32.1% Recession. (Table 1.) 2009 Rhode Island 31.3% 2009 Maryland 29.1% • Higher education spending in Ohio peaked in fiscal year 2010 Georgia 28.6% 2009 at $2.5 billion and by 2013 had declined 20% from its 2011 Tennessee 27.4% peak to $2.0 billion, a 14-year low. 2010 South Carolina 26.7% 2009 Wisconsin 25.1% • Ohio’s share of higher education funding of all 50 states 2010 Illinois 24.7% has been declining for at least the last two decades, from 2009 South Dakota 24.4% 2009 Wyoming 24.3% 3.6% in 2000 to 2.5% in 2020. (Figure 3.) 2010 Montana 24.2% 2009 Hawaii 24.1% In FY 2020, only three states decreased spending on higher 2009 Idaho 22.8% education; Alaska, Hawaii, and New York. In contrast, annual 2009 Oregon 21.5% increases ranged from 0.7% to 11.4%. The increase for all 50 2009 Virginia 20.1% 2011 Nebraska 20.0% states was 5%, with Ohio increasing spending by 4.3%. 2010 Texas 18.3% 2009 Washington 17.0% Table 1 shows the percent increase in state spending since 2009 New York 15.5% each state’s peak year of higher education spending prior to 2011 Maine 15.3% the effects of the Great Recession. For most states, peak years 2010 New Jersey 14.9% 2010 Indiana 14.8% occurred in 2009 or 2010. Thirty-seven states have recovered 2009 Nevada 11.6% from the decline in funding following the Great Recession, and 2009 North Carolina 11.0% currently have positive growth, ranging from 0.5% to 48%. 2012 North Dakota 10.4% Average US state growth is 23% since the Great Recession. 2009 Minnesota 7.9% 2010 Connecticut 4.6% 2011 Vermont 4.1% Ohio’s Declining Share of Tax Dollars for Higher 2009 Delaware 1.7% 2009 New Mexico 1.5% Education 2009 Kansas 1.1% 2009 Alabama 0.9% Figure 3 2012 Arkansas 0.5% Ohio's Percent of All US State Appropriations of State 2010 Missouri -2.8% Tax Funds for Higher Education Operating Expenses 2010 New Hampshire -3.2% 4.0% 2013 West Virginia -3.7% 2009 Ohio -4.1% 3.5% 2009 Michigan -4.2% 3.0% 2010 Alaska -7.2% 2.5% 2009 Iowa -8.9% 2.0% 2010 Kentucky -10.3% 1.5% 2009 Mississippi -10.7% 2009 Pennsylvania -18.2% 1.0% 2009 Arizona -19.3% 0.5% 2010 Oklahoma -27.8% 0.0% 2009 Louisiana -29.1% 2009 Total, 50 states 22.9% FY00 FY02 FY03 FY04 FY05 FY06 FY07 FY09 FY10 FY11 FY12 FY13 FY14 FY16 FY17 FY18 FY20 FY01 FY08 FY15 FY19 Source: State Higher Education Executive Officers Association (2019). State Higher Source: State Higher Education Executive Officers Association Education Finance: FY 2000-2020. Boulder, CO. Calculation by T. Ford. (2019). State Higher Education Finance: FY 2009-2020. Boulder, CO. 3 “10 Higher Education Predictions for the 2020 PREDICTIONS New Decade” By John Kroger (January 6, 2020, Inside Higher Ed) & TRENDS 1. 100 small colleges close At the outset of a new year and a new decade, To survive a small college needs a great location, predictions and trends in higher education abound. large endowment, and powerful brand. Summarized below are trends from higher education publications and the popular press. 2. Transformation of the NCAA Some common themes have emerged, such as the 45 major sports universities will decide to compete many forms of growing competition with traditional to pay players; all others will opt out. education, including computer science boot camps, new education providers such as technology 3. Higher education finance debate companies and other corporations, graduate Is education a private or public good? College certificates, and online programs. education will remain increasingly unaffordable. College affordability was also a common thread and 4. Continued humanities enrollments decline seems to be a problem without a solution, although Excluding students at elite college and universities, one prediction was that tuition would be flat or fall. students will continue to move toward pre- Other predictions included students seeking less professional degrees. expensive colleges outside of the US, elite colleges prioritizing revenue over equity, and colleges 5. Reinvention of accreditation remaining unaffordable. Accreditation will focus more on quality and results. Increasingly involving the corporate sector in different ways was also a theme, and included partnerships for 6. Disruption research, workforce development, and credegrees. Given the frustration of the tech industry with the current state of education, expect technology Which predictions do you think are accurate? Were companies to enter as “education” providers.