{"id":100038,"date":"2023-06-01T02:00:00","date_gmt":"2023-06-01T07:00:00","guid":{"rendered":"https:\/\/www.unmc.edu\/newsroom\/?p=100038"},"modified":"2023-05-31T17:30:22","modified_gmt":"2023-05-31T22:30:22","slug":"carter-facing-challenges-great-universities-reinvent-themselves","status":"publish","type":"post","link":"https:\/\/www.unmc.edu\/newsroom\/2023\/06\/01\/carter-facing-challenges-great-universities-reinvent-themselves\/","title":{"rendered":"Carter: Facing challenges, \u2018great universities reinvent themselves\u2019"},"content":{"rendered":"
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With higher education at a crossroads, the University of Nebraska must find ways to reimagine itself in order to become a stronger and more competitive institution even as it navigates new fiscal realities of rising costs and muted revenue growth, President Ted Carter said Wednesday.<\/p>\n\n\n\n

In remarks during a rare special Board of Regents meeting called by Chairman Tim Clare to review the university\u2019s budget planning, Carter told the board that NU, like institutions around the country, has reached an inflection point in its history. Facing inflation that is driving up payroll and operating costs, declines in enrollment and tuition revenue, limited growth in state funding and changing public narratives around the cost and value of a college degree, a \u201cbusiness as usual\u201d mindset will not be sufficient to ensure the university\u2019s long-term success, Carter said.<\/p>\n\n\n\n

\u201cThe conversation about the future of higher education is happening all across the country, and I want Nebraska to lead the way,\u201d Carter said. \u201cA competitive and high-quality University of Nebraska is too important to the success of our state to not be bringing our best and most innovative ideas to the table.<\/p>\n\n\n\n

\u201cAfter all, this is what great universities do when the world around them changes. They reinvent themselves.\u201d<\/p>\n\n\n\n

The NU System faces an estimated $80 million deficit by the end of the 2024-25 fiscal year, driven by inflation, rising health insurance costs, a projected 3% increase in the merit salary pool and anticipated flat enrollment that follows two consecutive years of declines, according to Chris Kabourek, NU senior vice president and chief financial officer. State funding will increase by 2.5% each of the next two years.<\/p>\n\n\n\n

With a 3.5% tuition increase for 2023-24 built in for planning purposes \u2013 the board will consider tuition as part of the 2023-24 operating budget at its June 22 meeting \u2013 as well as cuts currently in progress at the University of Nebraska-Lincoln, the biennial shortfall is reduced to about $58 million. But that figure would grow each year into the future as costs continue to rise at greater rates than new dollars coming in.<\/p>\n\n\n\n

More troubling, that number represents only what would be necessary to maintain the status quo \u2013 in other words, it includes nothing for additional investments in faculty salaries, high-growth research programs, student mental health or other strategic opportunities.<\/p>\n\n\n\n

Kabourek noted that the university has adequate cash reserves that can provide a short-term runway to manage budget shortfalls, but that cash is not a permanent solution. Most of NU\u2019s cash is committed; for example, some is held for the university\u2019s farm operations to be able to buy seed corn, and other cash represents advance payments made by Husker football season ticket holders.<\/p>\n\n\n\n

Nor, as Carter has pledged, will the university use tuition to balance its budget. Double-digit tuition increases in previous decades resulted in enrollment declines that took years to reverse.<\/p>\n\n\n\n

Historically, the university has taken a \u201cpeanut-butter\u201d approach to budget reductions, in which each campus assumes a proportional share of the shortfall and cuts are spread across the institution.<\/p>\n\n\n\n

Carter noted that approach could weaken the institution across the board at a time when the university already has room to improve in key performance areas. Enrollments at all three undergraduate campuses, for example, are declining and are well below historic highs. Four-year graduation rates have improved over time, but first-to-second year retention rates are down. Total research expenditures have grown, but growth in federally funded research expenditures has been slower and lags Nebraska\u2019s Big Ten peers.<\/p>\n\n\n\n

Regents made clear they want to see a different approach.<\/p>\n\n\n\n

\u201cIf we\u2019re truly going to be the best we can be, we have to have these discussions,\u201d Clare, of Lincoln, said.<\/p>\n\n\n\n

\u201cThe data shows that in some of these areas, we need to be more competitive in terms of research and enrollment. We cannot continue status quo, we cannot cut our way to prosperity. We\u2019ve got to look at our operations and be critical of what we\u2019re doing and come out stronger and leaner.\u201d<\/p>\n\n\n\n

Said board Vice Chairman Rob Schafer of Beatrice: \u201cThe only constant in life is change. We have to change and reinvent ourselves. We\u2019re going to have to do a better job. We\u2019re at a time when competition is immense for time, money, resources and, most importantly, students.\u201d<\/p>\n\n\n\n

\u201cTime is of the essence,\u201d Regent Jim Scheer of Norfolk said. \u201cIf a businessperson was looking at this, you\u2019d be changing by this afternoon.\u201d<\/p>\n\n\n\n

Several regents credited Carter for identifying access and affordability, student recruitment and success, quality education and research excellence as foundational priorities going forward.<\/p>\n\n\n\n

\u201cI know that we\u2019re going to have to make decisions that aren\u2019t going to be easy, but I do appreciate that we\u2019re keeping the focus on maintaining high-quality excellent education that\u2019s accessible to our students,\u201d Regent Elizabeth O\u2019Connor of Omaha said. \u201cAt the end of the day, that\u2019s why we\u2019re here.\u201d<\/p>\n\n\n\n

Clare ended the meeting with a directive to Carter to build a plan before the June 22 regents meeting that addresses the challenges raised at Wednesday\u2019s special meeting. Clare set the following parameters for Carter:<\/p>\n\n\n\n