Speeches and statementsHigher Education at a CrossroadPresident B. Joseph White Thank you for the opportunity to speak today. We live in a time of tremendous economic transformation. I often assert in public statements what I deeply believe: that the University of Illinois — with three campuses, 70,000 students, $600 million a year in funded research, and a distinguished record of discovery, including 19 Nobel Prize winning faculty and alumni — is the state of Illinois’s most valuable asset in creating a prosperous future during this time of tumultuous change. I also believe that we can have many more winners than losers in the global economy, in Tom Friedman’s new, flat world. And that the people of Illinois can be among the winners — but only with a healthy, vibrant University of Illinois. You know the reason. In the flat world, in the competition among the nations that are players — those with reasonably open market economies — educated people and the knowledge that flows from scientific discovery are the raw material of new industries, companies, jobs and incomes. And that’s our beat at the upper Midwest’s great public research universities. Educating people on a large scale with excellence and conducting research in engineering, computer science, chemistry, biomedicine, and agriculture — that’s what we do at the University of Illinois. So these universities are a treasure — a dynamic treasure, not a museum treasure. They are the envy of the rest of the world. And yet, they are, as the title of this conference says, at a crossroad. Or, as I recently said in my inaugural address about the University of Illinois, we are at a tipping point. In one direction is the slide, to paraphrase a recent best seller, from great to merely good, possibly on the path to mediocre. In the other direction is a brilliant future, one in which the university thrives and fulfills its historic mission of transforming lives through excellent, affordable education and enabling the state and the nation to successfully navigate a sometimes frightening, sometimes exhilarating period of economic transition. Why are public research universities at a tipping point? I’ll return to the question, but let me digress briefly. Yesterday, in a single meeting, I saw the promise of our economic future as clearly as one could imagine. At our Urbana campus, we hosted a large Chinese delegation led by Governor Lu Hao of Gansu Province. We signed an agreement and I watched in delight as Dean Bob Easter of our College of Agriculture described how University of Illinois crop and animal scientists will teach the Chinese how to make Gansu Province the livestock capital of China, equivalent to the Texas-Kansas-Oklahoma-Colorado quadrant in which almost half of American beef is raised. At its heart, every agreement is based on a simple exchange. The one I witnessed yesterday was expert American advice to create a better Chinese diet facilitated by China’s new global status and its hard-won international purchasing power. All parties emerge as winners. And there will be indirect winners, like the grain growers of Kazakhstan, northeast China, and, of course, Illinois and Iowa … because these animals have to eat to grow. I’m telling you, the meeting would have gladdened Tom Friedman’s heart … and Adam Smith’s. To return to my question, why are great public research universities, like the one where this very exciting meeting occurred, at a tipping point? It seems odd that they should be, for they are wildly successful institutions by virtually every measure. At the University of Illinois, even after years of stiff tuition increases, the result of state budget cuts and level funding, we provide a $25,000 to $30,000 a year education for about $8,000 to tens of thousands of students selected on a merit basis — a true gateway of opportunity and an extraordinary means of upward mobility. Our students mainly come from the state and stay in the state. Meanwhile, $600 million in funded research dollars are imported into Illinois then spent in the state. We’re a reliable and growing employer, we’re an engine of economic development. So you would think that the state leadership would love us … not only for Dee Brown and winning basketball — but because for an annual expenditure of $1 billion, the state of Illinois gets deep-discounted quality education for 70,000 students, research, a Medical Center, and 100% ownership of a highly consequential, financially sound, $3.5 billion a year institution. Such a deal! And yet, we are at a crossroad and we are at a tipping point. The reason is simply that the state, having built the university with generous capital and operating support for nearly 140 years, has sent us an unmistakable message since 2001. The message is this: when it comes to incremental operating funds and new capital, you are on your own. This is an enormous sea change for us to navigate successfully. There is an obvious answer to this new reality. It is to forge what I call a new Compact for the support of our great public research university, one in which five parties all do their parts to preserve and develop a vital public asset: • The state does what it can when it can. Let me tell you about my experience as a new University president communicating and trying to forge this Compact. When I say in front of audiences that the University of Illinois is the state’s most important asset to create a prosperous future, people smile. When I say that we must not allow the University to erode on our watch, people nod. And when I say that we must forge a new Compact, with all doing their part, everybody applauds. But when I meet with a legislative leader, as I did last week, and say, your piece of the Compact is 1.5% … $10 million on a $700 million direct appropriation … he tells me … look, it’s not going to happen, we did a two year budget deal with no increase, and don’t you read the paper, there’s no money. When I meet with the people who have to set tuition, and tell them that we really need the $1,000 a year increase the privates (and some publics, like the University of Michigan and Michigan State) are getting in order to compete because we’re getting no incremental help from the state in a direct appropriation or new capital, some say: Do you really need the money? Isn’t that an awfully big percentage increase? Won’t the legislature punish us by cutting our appropriation? What about the burden on the middle class? And these are good questions, all of them. When I talk with the faculty Senates Conference about grant and contract success, they remind me that the federal research funding environment is getting tougher. When I talk with them about ongoing reduction and reallocation, they’re somber. When I talk with private donors about kicking up their support, most are affirming but some also ask: Can you continue to be a distinguished university, because I only invest in winners. Or, is the state of Illinois committed to the University of Illinois, I want my gift to add to your resources, not substitute for what the state’s not doing. And when I talk with the leaders of the University … chancellors, deans, department heads … they say, well, we’re competing pretty successfully with inadequate resources. But we’ve handled budget cuts by picking the low hanging fruit, the privates are working hard to recruit our best faculty, the deferred maintenance problem is getting worse, and after five years of this it feels like the string is running out on maintaining quality. So these are the hard choices we face: successfully forging a new Compact or accepting the long, slow slide into mediocrity. Presidential leadership in public universities today involves, in part, having to tell people what they really don’t want to hear. Like there are three things that don’t go together, no matter how much we wish they did: continued excellence, weak state support, and modest tuition increases. Speaking for myself, I love the challenge of forging a new Compact for the University of Illinois. I have every intention of ensuring that the University has not just a good, but a brilliant future. I’m determined, aggressive, competitive and even a little fanatical about the value of my great public research university. Let me end now on two points you may find of interest. First, a significant part of my background is in business. So I’m often asked: why don’t you just run the University more like a business. To which I say, sometimes I’d like to … but you wouldn’t let me, and you shouldn’t. Here are just two things I would do if we ran the University of Illinois like a business. First, I would raise tuition to a market clearing price for every program for which we have excess demand, and there are many of them. This would involve doubling or tripling our current resident tuition rates and we’d still come out ahead after returning the money we get from the state to reflect the resident tuition discount in these programs. Second, I would close our “financially unattractive” operations. Like certain programs that supply a big fraction of Illinois’s health care professionals. And libraries. And expensive departments and majors that are not gateways to high paying careers. We have seen what a university that’s run like a business looks like. It’s the Apollo Group, parent company of the University of Phoenix. It’s a business I admire a lot: I wish I’d invested more since at its IPO a decade ago it was worth $400 million and now it’s worth $14.1 billion. Maximize revenues. Offer only high margin programs. Minimize expenses with rented facilities and part time faculty. Serve the customer. They do it well. There’s a lot we can learn from them and they have some business I intend to win back. But I’ll guarantee you: no one would ever say that the University of Phoenix is America’s most important asset when it comes to enabling us to win in the new, flat world. Yet that is something we can say about the University of Illinois, the University of Michigan, and our peers. Think about it. Here’s the second and final point. I’ve been pondering why, if a great public research university is so important to our future, elected officials can back away from supporting it so fast and so far with hardly a peep from the public. I don’t really know the answer and I’m sure it’s complex. But this I do know. American benefits from a rich mix of excellent private and public institutions. Our missions are different and complementary. The competition among us is bracing. In 1987, seven of the top 26 universities in U.S. News rankings were public. Recently, the number was down to four. This is a disturbing trend. The stakes are high in maintaining the excellence of our great public universities. Thanks for the opportunity to talk with you this morning about meeting that important challenge. |
