Operating Budget for FY 2014
St. Mary’s College of Maryland
Response to the Department of Legislative Services
FY2014 Operating Budget Analysis
House Committee on Appropriations
Education and Economic Development Subcommittee
February 21, 2013
Senate Budget & Taxation Committee
Senate Education, Business, and Administration Subcommittee
February 28, 2013
Joseph Urgo, President
Gary Jobson, Chair, Trustee Government Relations Committee
Tom Botzman, Vice President for Business and Finance
(This information may be found online at http://www.smcm.edu/govtrelations/)
St. Mary’s College of Maryland, located in Historic St. Mary’s City, is designated the state’s public honors college. The College had 1,862 full-time students enrolled for the Fall 2012 semester and a fiscal year 2013 unrestricted operating budget of about $70.3 million, of which the State of Maryland provides approximately $18.5 million as a general fund grant. St. Mary’s College charter as a public honors college results from visionary legislation with two institutional goals that are frequently at odds with each other. St. Mary’s College is charged by the state of Maryland to provide both:
(1) the promise of public education affordable to all and thriving on diversity, and
(2) high standards of academic excellence
As always, the College is grateful to the Governor and the Legislature for their ongoing commitment to higher education and to St. Mary’s College of Maryland.
Operating Budget for FY 2014
For FY14 the College requests its annual inflator, which approximates $351,000. The current estimate for operating results for FY13 project toward a modest surplus. St. Mary’s looks forward to implementing its strategic plan, including needed faculty positions and increased need-based financial aid, as we look to support the honors college mission and goals. Cost containment efforts in energy use and redesign of tuition waivers have helped to balance revenues and expenses. The College continues to search for cost containment measures as a way to minimize future tuition and fee increases.
Question: Page 7 – The President should comment on the decline in minority graduation rates in the 2006 cohort.
Response: The six-year graduation rate for the 2006 cohort dropped below 70%; however, the six-year graduation rates for the 2007 and 2008 cohorts are expected to recover and to rise closer to 80%. The sizes of the cohorts represented in the bar chart are decidedly different. For example, among “all” students in the 2006 cohort, 345 out of 428 graduated. The “African-American” cohort had 22 out of 35 students graduating, so each student represented nearly a 3% change. The “all minority” cohort was slightly larger, with 58 out of 85 students graduating. The smaller cohorts have a greater variation than does the “all” student cohort so the movements in the reported rates will have a greater variation. Nonetheless, the College desires to eliminate the graduation gap.
The College is undertaking an expanded enrollment management initiative that will include detailed study of the retention rates of students. We are concerned, in particular, that the financial strain resulting from the economic downturn combined with the rise in St. Mary’s tuition rates during the state tuition freeze may have increased the number of students who either do not graduate or have a delay in their progress toward graduation. These pressures are felt most keenly by students with the least financial resources, including minority students. The President has established the goal of increasing the College’s four-year graduation rate to above 80% and for elimination of the graduation gap with the objective of also raising the minority four-year graduation rate to above 80%.
The College typically has a six-year graduation rate of approximately 80%. The current four-year graduation rate for Pell Grant at entry students is 54%, exceeding national norms. However, the College’s overall four-year graduation rate for the most recent four-year cohort (entering first year class in 2007) is 72%.
Graduation Rates for Spring 2011 based on the 2005 entering first time first-year cohort.
Four-year Graduation Rate
Six-year Graduation Rate
|Pell Grant Students||54%||66%|
|All Minority Students||61%||79%|
|All First Generation Students||60%||74%|
Source: St. Mary’s College Office of Institutional Research
St. Mary’s has already made progress toward the goal of supporting students from diverse backgrounds: the DeSousa-Brent Scholars Program in its current configuration contributes strongly to first-year retention rates by cultivating the academic and leadership potential of talented students from traditionally underrepresented groups. Our faculty and staff are dedicated to fostering intellectual, social and ethical development within our students and the community. However, the program is limited primarily to helping first-year students begin the process of becoming leaders, with only a small number of students remaining involved as peer mentors in subsequent years. Recently introduced legislation, HB831 / SB828 for fiscal year 2014, proposes additional funding to expand the DeSousa-Brent Scholars Completion Program to serve students for all four years at the College. A stated objective of the Program is to increase the four-year graduation rate for DeSousa-Brent Scholars to at least 70%. The College is eager to partner with the state, donors, and foundations in support of the DeSousa-Brent Scholars Program.
Question: Page 8 – The President should comment on improving the second-year retention rate of SMCM students, given the higher rates for the 2006 to 2008 cohorts.
Response: The College is concerned about the downward trend of second-year retention rates. We note that the declines in 2009 and 2010 cited by the analyst on page 8 (Exhibit 3) correlate with the increase in unsubsidized student loans noted by the analyst on page 17 (Exhibit 11). As such, the College has sought to increase both institutional and donor contributions to need-based financial aid. We believe that the proposed tuition relief of HB831 / SB828 for fiscal year 2014 will benefit students who may otherwise be forced to leave St. Mary’s College in search of a less expensive option. The College is undergoing a review of its retention profile and has not yet identified a change in the academic progress of students who leave the institution. That is, a number of the students who have left after completing the first year have made acceptable or very good progress in the academic program. We continue to work to identify reasons for attrition that may be compounding the financial challenge for students and their families.
Question: Page 9 – The President should comment on the 2010 and 2011 decline in degrees per 100 full-time equivalent students.
Response: The drop in degrees awarded per 100 students is the continuation of a decrease since 2009, with 488 graduates, to our lower result of 443 graduates in 2011. The wave pattern in our number of graduates reflects the varying size of our first-time student enrollment each fall, which has varied from about 420 students up to 490 students. The larger number of 2009 graduates was the result of a large entering class in 2005 that has echoed in our graduation numbers. As our number of full-time equivalent students has stayed roughly the same this decrease of 45 students explains the lower degree production between 2010 and 2011. The graduation rates remain consistent with our 4 year graduation rate at 72% and our 6 year graduation rate at approximately 80%. The President has convened an enrollment management committee that is charged with managing our admissions and retention programs to smooth out enrollments and increase the effectiveness and efficiency of our efforts.
Question: Page 19 – The President should comment on what SMCM is doing to increase financial aid literacy and responsible borrowing among new students and why no Perkins loans were reported in fiscal 2012.
Response: Financial aid literacy and responsible buying can best be accomplished by working with students to choose the best menu of financial support options. A hallmark of the residential liberal arts college is the close contact between students and faculty, and also between students and staff support personnel. Much of the discussion about financial aid literacy starts in our office of financial aid and is supplemented throughout the College, particularly in our offices that work with academic support and student affairs. The overall theme is consistent: St. Mary’s College seeks first to provide grants through our institutional and donor scholarships. We also look for federal and state financial aid programs to provide grant funding. Loans are applied only after grant and scholarship options have been exhausted. The College maintains a scholarship budget of $7.4 million in FY13 including $6.5 million of institutional funds (tuition discount). Our financial aid staff reviews student financial aid options and suggests alternatives to students who do not always have the expertise to make the wisest choices or to seek out available resources.
Exhibit 12 (page 18 of the analyst report) shows an average private loan of approximately $12,000 for Pell-eligible students, contrasted with slightly over $4,000 for the average subsidized loan. We recognize that the chart is skewed by the fact that the averages for each category of loan are calculated according to the total amount borrowed for each loan type divided by the number of recipients for that type of loan. Our analysis indicates that Pell-eligible students borrowed a total of $2,148,491 through subsidized, unsubsidized, parent PLUS, and private loans in 2011-2012. Of this amount, only 2.8% was through private loans, which presents a very different picture from Exhibit 12 as a result of the much smaller number of Pell-eligible students taking private loans as compared to the larger cohorts. Further, in 2011-12 we had five Pell-eligible students borrow a total of $61,540 for an average loan of $12,308. We had 237 Pell-eligible students borrow subsidized loans for $1,013,337 for an average subsidized loan of $4,276. The great majority of Pell-eligible students are not taking private loans. Recalculating the average loan amounts based on the number of all students taking out loans provides a $259 average private loan, $2,429 PLUS loan, $4,258 average subsidized loan, and $2,082 unsubsidized loan. These data indicate that the students with the highest amount of need are being educated that private loans should be used as a last resort.
The Perkins loan program at St. Mary's College has a small pool of funding ($400,000) provided through the U.S. Department of Education that has not received new money in many years. The College uses the pool to make loans to students according to the federal regulations. Our ongoing ability to make new loans is based on previous recipient repayments over time. In 2012 our financial aid office determined the best use of the available $58,500 was to concentrate all the new loans on twenty graduate students pursuing a Masters of Arts in Teaching (MAT). These students are no longer eligible for subsidized loans through the Direct Loan program. The primary driver of the realignment is that MAT students may become teachers in low-income schools or teacher-shortage fields with the possibility of eventual loan cancellation. The MAT is an eleven month program and with prompt repayment we may begin to increase the pool of funds available to new students.
Question: Page 20 – The President should comment on the progress of the new financial aid campaign and the overall fundraising goal and timeline. Furthermore, given that the 12% tuition reduction did not occur, the President should comment on whether the new award for Pell-eligible students will need to be increased to fully meet financial need.
Response: As noted by the analyst on page 20, HB831 / SB828 for fiscal year 2014 proposes to freeze in-state tuition through 2018. This will provide tuition relief of approximately 4% annually for five years, accomplishing the goal of holding back tuition increases by 12% within three years. The College will continue to increase its share of internal funds dedicated to need-5
based financial aid in fiscal year 2014, providing more support to students with need, especially Pell-eligible students. The College is grateful to the Governor and the Legislature for responding to our desire to make a St. Mary’s College honors education more affordable.
The College is in the silent phase of a comprehensive campaign. Two goals of the campaign will be related to scholarship support. Endowed scholarship funds will provide investment returns to impact generations of future students. A working goal of $14 million has been established for increases to endowed scholarship funds. Current scholarship funds, provided through an annual commitment by a donor for a minimum of four years, will support need-based financial aid. A planned goal of $3.5 million has been set for current scholarship funds.
Question: Page 20 – The President should comment on what additional policies or actions SMCM may pursue to remain, as its guiding legislation puts it, “affordable to all.”
Response: The charter also calls for academic excellence as a hallmark of a St. Mary’s College “honors level” education. St. Mary’s College is a charter member of the Council of Public Liberal Arts Colleges (COPLAC), the leading organization working to promote high quality liberal arts education through public institutions. National publications, such as US News and Peterson’s, continue to rank the college as one of the top five public liberal arts colleges and one of the top 100 liberal arts colleges nationally. St. Mary’s participates actively in the American Association of Colleges and Universities (AAC&U) national network of liberal arts college and university presidents committed to advancing liberal learning and partnering with employers. More than 70% of St. Mary’s graduates pursue advanced degrees within five years after graduation and half of our graduating students participated in study-abroad programs.
The diversity of the student body continues to be strong with approximately 16% of our 2012 first-year students being the first generation in their family to seek a bachelor’s degree. Further, 22% of the incoming class of 2016 is drawn from minority groups. Last year, 62% of the fall 2011 entering class received institutional financial aid. Of those who received institutional aid, 55% received need-based institutional grants. Of the fall 2011 entering freshmen class, 83% of the students determined to have need received some type of institutional aid. About 10% of St. Mary’s students receive a Pell Grant in their first year at the College.
The College recognizes the importance of partnering with the State to shorten time to degree for students, decreasing total cost per degree. It is the College’s view that St. Mary’s can have its biggest impact on the cost per degree by focusing on graduating as many students as possible within four years. Cost containment strategies along with the use of need-based financial aid are the key tactics employed to remain “affordable to all”. Current institutional financial aid for Pell Grant-at entry students totals $453,000. Further, the upcoming fundraising campaign has as its primary focus support for need-based financial aid.
St. Mary’s College of Maryland
FY 2014 Capital Budget Request
House Appropriations Committee Capital Budget Subcommittee March 19, 2013
Senate Budget and Tax Capital Budget Subcommittee March 26, 2013
Joseph Urgo, President
Chip Jackson, Associate Vice President for Planning and Facilities
(This information may be found online at http://www.smcm.edu/govtrelations)
St. Mary’s College of Maryland, located in Historic St. Mary’s City, is designated the state’s public honors college. The College’s charter, established by the State of Maryland in 1992, provides both the promise of public education affordable to all and thriving on diversity and high standards of academic excellence. As always, the College is grateful to the governor, the legislature, and to the Maryland Higher Education Commission for ongoing commitment to higher education and to St. Mary’s College of Maryland.
The College has 1,862 full-time students enrolled for the fall 2012 semester and a FY 13 unrestricted operating budget of about $69.3 million, of which the State of Maryland provides approximately $18.5 million as a general fund grant. The College does not receive additional operating funding from the state or the local governments. St. Mary’s College of Maryland attributes much of its success to the strong support received from the State of Maryland for its operating and capital budgets.
St. Mary’s charter as a public honors college results from visionary legislation with two institutional goals that are frequently at odds with each other. St. Mary’s College is charged by the state of Maryland to provide both:
(1) the promise of public education affordable to all and thriving on diversity, and
(2) high standards of academic excellence
Supporting the two goals articulated by the legislature’s vision for the College—the educational requirements of honors students and the promise of access—has placed strains on both revenues and expenditures. Tuition and fees, for example, have risen at roughly double the rate of the general fund over the past seven years. At the same time, expenditures for institutional financial aid have increased at nearly four times the rate of the general fund and double the rate of tuition revenue increases. The College has studied its tuition and financial aid in detail and continues to explore methods to uphold the public trust by providing an honors liberal arts education to any high-capacity student attending St. Mary’s College.
Capital Budget for FY 2014
Design of the Anne Arundel Hall replacement is now complete. The existing building has been vacated in preparation for demolition. The College has also relocated Margaret Brent Hall to a new site to make room for the new Anne Arundel Hall. The College is requesting $4.6 million in FY14 for Phase I of the Anne Arundel Hall replacement to include demolition of the existing building and new replacement parking. FY15/16 funds are sought for Phase II to construct the new Anne Arundel Hall.
The new facility will accommodate the history, anthropology, archaeology, museum studies, and international languages and culture programs of the College. The building will also house staff, laboratories, and artifact curation space for Historic St. Mary's City’s Archaeology Department. Situated within the historic townlands of Maryland’s first capital city and adjacent to HSMC’s Governor’s Field Exhibit, Anne Arundel Hall is an ideal location for advancing the affiliated programs of the College and the City. The replacement facility will enable College faculty to work collaboratively with HSMC research staff and College students will benefit from opportunities to work within HSMC’s artifact processing and analysis labs. Adjacencies to the artifact collection within the building will provide convenient access to HSMC researchers and College faculty/students alike.
Given that HSMC is expecting an operating deficit in fiscal 2013, the President should comment on whether it is realistic to expect HSMC to contribute financially to the operating costs of the new facility.
The affiliation between the College and HSMC creates opportunities to integrate higher education, preservation, and historic interpretation that is significant on both state and national levels. The new Anne Arundel Hall provides the physical assets that will enable the College and HSMC to further enhance these programs. HSMC’s position on their ability to support their operating expenses for their program within the new building is as follows per Dr. Regina Faden, Director of Historic St. Mary’s City:
“The Commission recognizes its obligations to generate revenue to support operations and care of state assets of structures, land, and shoreline. HSMC has increased its revenue by 50% over the past five years and continues to develop strategies for increasing revenue. However, recent budget cuts and increases in the agency’s share of retirement benefits have diminished HSMC’s ability to carry out its legislated mission. By FY 2016, the Commission expects to close its budget gap, given increased revenue, cost savings from transfer of research functions to AAH, and sufficient state support to meet the expense of its mandate.”
The College remains supportive of HSMC as it works to meet its operating budget requirements.