The Office of the President: University of Oregon


May 2010

New Partnership: Reimagining the Public University and Renewing Educational Excellence through Access and Affordability

The time has come to reimagine higher education in Oregon.

Public higher education has been at the forefront of our state’s ambitions since its founding. Land for a University of Oregon campus was promised when Oregon was admitted into the union in 1859. But the dream of a college education is slipping away for many Oregonians. For the first time in state history, today’s young adults are less educated than their parents.

Our current structures for governing and financing the state’s public universities must be reevaluated as we seek to preserve the mission of public higher education—that includes sustaining the UO as a public institution.

A generation ago, the state contributed twice as much revenue per student at the UO than those students paid in tuition. Today, state funding accounts for just 9 percent of the UO budget and students pay more than three times as much for their education than the state provides. Of thirty public institutions in the prestigious Association of American Universities, the UO ranks dead last in the amount of state support received per student.

Oregon’s competitive position in a global, knowledge-based economy is at extreme risk. Parents of those in the state’s twenty-five to thirty-four age group have a higher percentage of college degree attainment than their children, while the reverse is true nationwide and in most countries that are our economic peers.

We must replace a system that is no longer serving Oregon’s needs with one that will renew the state’s abilities to achieve its educational goals and reestablish its tradition of policy innovation.

As we seek to create a new Oregon model that includes tools to stabilize university funding, we should pay close attention to what is working elsewhere. The University of Washington and the University of Virginia each operate under systems in which state-level coordinating boards ensure individual universities’ accountability while allowing them to manage their own business affairs.

Reimagining governance

Under this model, the UO proposes establishing a public governing board—a majority of its members appointed by the governor—which will focus on the UO’s mission and public responsibility. The Oregon University System will be involved with the UO as a coordinating board responsible for setting and monitoring educational outcomes such as degree attainment, and will have authority to coordinate with other universities to prevent duplication of programs.

Reimagining funding

The UO received $65 million in FY2009-10 from the state and the federal American Recovery and Reinvestment Act. It is not realistic to expect an increase, with an overall state budget shortfall of $2.5 billion predicted for the next biennium. But by securing an assurance that the Oregon Legislature will maintain its present level of support in the form of bond payments—a creative reinvestment in the university’s future—the UO can bring goals of the institution and state back within reach.

A state funding commitment of $65 million per year over thirty years will be used to make annual payments on a new public endowment. The UO will match the funds with money raised from private donors, and manage the combined public-private endowment. That pool of money will create a stable, perpetual base to fund the UO’s education mission and bring greater stability to resident undergraduate tuition costs. In its first year, the public endowment will generate sufficient operating revenue for the university and will continue to grow. The bond creates even greater incentives for philanthropists to give to the university.

Reimagining accountability

While this plan envisions a public governing board for the UO, a state-level coordinating body such as the Oregon University System will be charged with setting clear standards of success for the institution. It will hold the UO accountable for meeting those standards—including accessibility, affordability, diversity, economic development and service impact.

The UO is in position right now to reassert itself. By reorganizing public assets and resolving to bolster private support, the university can build a stable and predictable funding structure. Statewide goals will be ensured by performance-based financial incentives. And public higher education will no longer be driven by the state’s economic circumstances.

Reimagine that.