Remarks to the House Ways & Means Higher Education Sub-Committee

January 23, 2018


Good afternoon Chairman Cole, Ms. Cobb-Hunter, Mr. Finlay, and Mr. Sottile. I also extend my greetings to all members who have joined us here this afternoon (Rep Jefferson, Brandon, Newton).

I would like to introduce Mr. Hugh Mobley of Lancaster and Mr Thad Westbrook of Lexington from our Board of Trustees who have joined us today; our USC Columbia Student Body President Ross Lordo; as well as our Chancellors, campus deans, and senior members of my administration, some of whom you will hear from later.

Mr. Chairman, we’re pleased to be at our first hearing with you at the committee helm. Generally, I begin these meetings by recounting the stellar achievements by our students and faculty, or highlighting our latest partnership with a South Carolina company, or recent successes of our athletic teams.

However, with new committee membership, I want to make the most efficient use of your time by simply beginning with an honest and frank discussion…one that hopefully resets the conversation between government and higher ed so that, together, we can better serve our people with affordable, high quality education and workforce preparation.

In fact, as President of the USC System—our state’s largest provider of four-year degrees—I will begin by laying out new commitments to you and to the people of our state, which we can accomplish only with your leadership.

Which are:

  • We can hold tuition flat for South Carolinians
  • We can educate even more South Carolinians
  • We can educate even more African-Americans and more minorities
  • We can continue to create more programs that meet the employment needs of the state
  •  We can continue our push for excellence

However, we need your help to make these commitments a reality.

And this is what we need from you:

  • Resume state investment in state-owned assets and infrastructure through a capital bond bill for higher education
  • Enact regulatory reform that allows universities to establish auxiliary authorities with limited scope.
  • Establish baseline in-state student funding levels for the regional, comprehensive and research sectors.  Why should high achieving colleges be funded at lower levels just because the state funding formula was abandoned 15 years ago.
  • Develop a new funding model that rewards institutions for helping to meet the needs of the state
  • Increase investment in state funded need-based financial aid that would reduce debt for students from low-income families

These are tall orders but this is where our efforts need to be focused. You dealt with roads and bridges last year.  Today I ask you to deal with South Carolina’s bridge to the future.

 

South Carolina needs even more college graduates. 70,000 more above current graduation rates … We need more teachers, health care workers, engineers, accountants, programmers, entrepreneurs and executives to meet the needs of business and industry in our state.

 

Now let me tell you why…

South Carolina needs even more college graduates. 70,000 more above current graduation rates according to a study from our Darla Moore School of Business: 

We need more teachers, health care workers, engineers, accountants, programmers, entrepreneurs and executives to meet the needs of business and industry in our state. We need them as badly as we needed better roads and bridges. 

I know we can do it. But USC can’t do it alone.  We can’t simply will it to happen.

We need the General Assembly to help us. And we certainly don’t need the CHE making it more difficult.  We need a collaborative environment, not a combative one.

We are being falsely accused of excessive spending and restricting access to South Carolinians by the Commission on Higher Education, an organization that should be an informed, collaborative partner and an advocate for higher education, as they always have been before. 

So let me be clear. There is no excessive spending.  We are not restricting access and affordability for South Carolinians.  In fact, nothing could be further from the truth. 

Through our 8 campuses across 19 locations and online, USC offers access and opportunity to every single South Carolina high school graduate. Every one. 

Only the USC System offers coordinated, streamlined pathways of opportunity for all South Carolina high school graduates, enabling students to choose the path that is right for them among our regional, comprehensive and research campuses as well as our online degree completion programs.

Today, the USC System enrolls more South Carolinians than at any other point in our history. There are more than 34,000 South Carolinians enrolled across the system, nearly 20,000 of whom are on the Columbia campus.

Make no mistake, it hasn’t been easy to increase enrollment of South Carolinians. The number of high school graduates is shrinking—and it’s expected to continue to do so for several years to come.

Moreover, only a small percentage are college-ready. According to the ACT, about 15% of all South Carolina high school graduates are college-ready in the four basic subject areas: English, reading, math and science. 15%! Even more concerning is that only 6% of African-American high school graduates are prepared for college.

 

Today, the USC System enrolls more South Carolinians than at any other point in our history. There are more than 34,000 South Carolinians enrolled across the system, nearly 20,000 of whom are on the Columbia campus.

 

By state policy, we can’t provide remedial education courses. So, if students aren’t prepared coming out of high school, we can’t enroll them. 

Not only are we not allowed to provide the courses they need, it would be morally irresponsible to enroll them knowing it would be a challenge for them to graduate on time.  Students who do not graduate in four or fewer years, pile on more debt.

Despite public policy challenges and a lack of state funding, USC has excelled as a System.  USC is growing enrollments of South Carolinians, African-Americans and other minority students in spite of absent public policy and a lack of public funding that makes those goals extremely difficult.

Columbia alone enrolls 1,000 more South Carolinians than it did in 2008. As a system, we enroll nearly 3,000 more South Carolinians than we did 10 years ago.

90% of all South Carolina applicants to USC Columbia are given the opportunity to enroll in one of our programs: General Admission, Honors College, Capstone Scholars or Gamecock Gateway. 

Since 2008, there is a positive growth trend in the number of African-Americans on our campuses.

Undergraduate African-American enrollment on the Columbia campus has grown by nearly 350 students since 2008, while the System has seen a total growth of 1,200 African-American undergraduate students. During that same time period, total enrollment of minority students on the Columbia campus (undergrad, graduate and professional) has grown by more than 2,300 students with total System growth exceeding 3,500 minority students.

As a system, USC is currently enrolling more African-American and minority students than at any point in history. USC is proud of the progress made and pledges to do more.

As important, USC educates more African-Americans than any other institution in the state. 

And let’s talk about our non-resident population, we can’t get to 70,000 more graduates without them.

 

As a system, USC is currently enrolling more African-American and minority students than at any point in history. USC is proud of the progress made and pledges to do more.

 

Yes, it is true we’ve grown the non-resident population significantly, please know that the increased revenue helps make up for what the state no longer provides.

Non-residents help us keep costs down for South Carolinian. At USC Columbia, non-resident tuition is the #1 source of revenue, grants and contracts is #2, resident tuition is #3, auxiliary services is #4 and state appropriations is #5.

Non-resident students provide $5.7 million a year in scholarships for resident students and non-residents shoulder more of the cost of building new facilities, about $9 million per year more. 

Finally, after aid, South Carolina undergraduates at USC Columbia pay, on average, less than $6,000 per year in out-of-pocket costs for tuition and fees. Nearly half of USC Columbia students graduate with zero student loan debt. Of those who do, they owe less than the state and national average—less than $29,000—about the cost of a new car for a lifetime of increased earnings.

Access and affordability are two factors that must be considered, the third is opportunity. USC is giving students the opportunity to succeed.

The Brookings Institute has lauded USC for creating social mobility for our graduates. 

The Education Trust commended us for improving graduation rates for minority students.

Here are the numbers behind those two incredible recognitions:

  • According to our most recent post-graduation survey, 87% of May 2016 USC Columbia graduates were employed or enrolled in grad school. Of those who were employed, the average salary was $45,486—higher than the state average for bachelor’s degree holders.
  • USC Columbia’s six-year graduation rate (73.2%) is among the highest in the nation, particularly for public institutions, exceeding the national average by nearly 20%.
  •  USC Columbia’s six-year graduation rate for African-Americans is 70% while the national average is 35%.
  • USC graduates more African-American students than 97% of all institutions in the country, is #1 in South Carolina and #1 among public SEC institutions in the graduation rate of African-American student.

A USC degree doesn’t just make a difference, it makes the difference.

  • South Carolina residents with a bachelor’s degree earn on average $43,712 per year, 70% more than those with a high school diploma. A bachelor’s degree holder will earn $1 million more over a lifetime than someone without a college degree.
  •  In South Carolina, the unemployment rate for a bachelor’s degree holder is 3.5% and the poverty rate is 4.3%. For a high school graduate, those rates are 10.2% and 16.4% respectively.)

Despite all of these incredible successes, we’ve been conservative, efficient and creative—good stewards of taxpayer money and the tuition dollars from our students.

We’ve cut programs, postponed investments in new programs, and done more with less across the board.  In fact, we’ve been so efficient with our funds that per student expenditures surpassed 2008 levels for the first time last year.

 

A USC degree doesn’t just make a difference, it makes the difference.

 

We’ve cut 53 academic programs in the past 10 years.

We made major decisions about outsourcing. IT is a great example of this—outsourcing support for many enterprise computer applications to IBM and transferring 60 employees from USC to IBM.

All the while we have earned national recognition for efficiency. We have been recognized by Forbes, Princeton Review, Money Magazine, US News & World Report and Kiplinger as being very efficient and a good value, but it has also challenged our pursuit of excellence and strained our ability to rein in tuition for South Carolinians.

This year we announced a 3% across the board reduction to all unit budgets on the Columbia campus. That money is being reinvested in academic and program excellence that will ensure our relevancy and impact on behalf of our students and the state.

We simply cannot continue to drive up costs with unfunded mandates, fail to maintain the physical infrastructure, and continue burdensome and duplicative regulation.

In 2018, the number one issue facing higher education in South Carolina is state funding.

Let me repeat that. 

In 2018, the number one issue facing higher education in South Carolina is state funding.  

In fact, since 2008, South Carolina has suffered the 4th largest cuts to higher education in the nation. Nearly 40% of our funding vanished, practically overnight, and while other state agencies have had their funding restored—many above their 2008 funding levels—the General Assembly has not invested in higher education.  While there have been small amounts of sporadic funding, there has been no comprehensive or long-term solution.  There is no funding model, no funding formula, and worse, no meaningful or comprehensive dialogue.

The average sticker price at public institutions in South Carolina is among the highest in the nation and the General Assembly, holds the key to tuition.

Let me give you an example:  healthcare and pension increases—not covered by the state— force us to raise revenue from our students.

 

Since 2008, South Carolina has suffered the 4th largest cuts to higher education in the nation. Nearly 40% of our funding vanished, practically overnight, and while other state agencies have had their funding restored … the General Assembly has not invested in higher education.

 

From FY2008 to FY2018, the USC System has had more than $76.6 million in unfunded mandates. The revenue to cover those costs comes from one source, increased tuition.  In fact, across the system the known retirement impact and expected health insurance impact from the budget submitted by Governor McMaster is $5.6 million for the system. 

USC Columbia has the lowest base state appropriation in the Southeastern Conference and USC Columbia receives less money per student than Clemson from the General Assembly.  You may not know that our comprehensive campuses receive less per student than other institutions in their sector and most of our Palmetto College campuses receive less per student than the technical colleges.

In fact, as neighboring states in the Southeast including Virginia, North Carolina, Georgia, Florida, Kentucky and Tennessee, and others throughout the nation have invested billions in higher education infrastructure and operational support, South Carolina has done nothing.

Despite these funding challenges, with keen vision and professional management, we have become a destination of choice for more South Carolinians than any other institution in our state and as important, a destination of choice for the nation’s brightest students.

Today, USC is the key to our state’s economic and overall wellbeing with a $5.5 billion annual economic impact, supporting more than 60,000 jobs, generating $220 million in tax revenue for the state and $41 million of economic input to local communities from visitors to our campuses, including the families of non-resident students.

We award nearly half of all public institution degrees in the state. It’s gratifying to know that nearly 95,000 degrees have been conferred under my presidency.

In addition, we are the state’s most comprehensive health sciences research and education entity and we are growing the state’s economy through partnerships with companies like Boeing, IBM, Siemens and Samsung.

But it still isn’t enough. Together, we must do more. More to provide access, maintain affordability, create opportunity and boost our state’s economy. We must move past short-term requests to long-term solutions. Our state and our students deserve and demand it.

So let’s work together. Let’s find a way to forge a pathway forward. 

Now, I’ll be happy to take questions or turn it over to my colleagues from each of our campuses for them to present the information you have requested.

 

Together, we must do more. More to provide access, maintain affordability, create opportunity and boost our state’s economy. We must move past short-term requests to long-term solutions. Our state and our students deserve and demand it.