2019 State of the University Address: Leading through the Disruption
As prepared for delivery
Trustees, former trustees, members of the Legislature, business leaders, chancellors, faculty, staff, students, alumni and friends, thank you for being here, and welcome to the third annual State of the University Address.
This is an opportunity to pause and reflect on our progress, to look back on where we’ve been, and discuss where we’d like to go.
That is more necessary at this moment, because significant challenges lie ahead for us.
It’s a moment that calls for long-term thinking, and long-term vision.
But it’s important to first consider what brought us here.
Three decades ago, a forward-thinking UMass Board of Trustees recognized that the university and the state were at a crossroads.
Massachusetts had reinvented itself from a center of textiles and manufacturing to a knowledge and tech-based economy, and UMass was not meeting the state’s growing needs.
The Board of Trustees formed a blue ribbon Commission on the Future of the University.
Chaired by David Saxon, President Emeritus of the University of California, the commission’s simple charge was to examine and make recommendations on the future role of UMass in the Commonwealth.
30 years ago this very month – in March of 1989 – the Commission published the blueprint for the UMass we know today.
Now known as The Saxon Report, its formal title was “Learning to Lead: Building a World-Class Public University in Massachusetts.”
It envisioned a UMass that could meet the state’s growing need for educated workers, that would close the education gap for minority and low-income residents, and that would establish a standard of excellence that aligned with the overall ambitions of the state.
The report called for a renewed investment in meeting the needs of under-served populations, in supporting K-12 education, and improving student-success and the development of talent.
Most of its recommendations were implemented by the Legislature, including the formation of our five-campus system, and the establishment of a governance structure that provided autonomy to the UMass Board of Trustees in financial management and academic policy, among other areas.
The report’s conclusion was that the future prosperity of the Commonwealth was dependent upon a world-class public research university.
Now bear in mind that what the Saxon Report contemplated was extreme.
The authors actually acknowledged that it was, in their own words, “a radical notion.”
But over the last 30 years, thanks to the hard work of many people in this room and your predecessors, we have indeed become the world-class university the commission envisioned.
By every measure, from student demand, to research impact, to third-party validations, we have reached the upper echelon of public universities in the United States and around the globe.
Today, UMass educates 75,000 students, including three times as many Massachusetts residents as the top eight private colleges and universities in the state combined.
We confer more degrees than any other institution in the state’s highest demand fields, such as management, education, analytics and nursing.
We graduate 18,000 students each spring, and nearly two thirds remain in Massachusetts to live, work, start families, and contribute to their communities.
All five of our campuses are statewide economic engines and talent pipelines.
Collectively, they generate more than $6 billion in annual economic impact.
Our $670 million dollar research enterprise produces life-changing discoveries and new startup companies, while keeping the state on the cutting edge of life sciences, robotics, advanced manufacturing, and many other fields.
And thanks to the support of so many of you here tonight, our endowment is now approaching $1 billion.
All of this is why U.S. News & World Report has ranked UMass one of the best university systems in the country for three years running, with all four undergraduate campuses ranked top tier national universities.
Not to be outdone, our incredible Medical School is top 10 percent in the nation for primary care education, and the bar pass rate at the emerging UMass School of Law is now surpassed by only Harvard and BU in the state, soaring above 92 percent.
Through the talent we develop, the research we conduct and the service we perform, we have become a key thread in the social, cultural and economic fabric that makes Massachusetts the greatest state in the nation, with a top innovation ecosystem, best K-12 schools, and most educated workforce.
This was the precise goal of the Saxon Commission, one that I am proud to say has been achieved.
In other words: the state of this university, 30 years later, is strong.
But there is also no doubt that there are challenges on the horizon.
Some of them are familiar to us.
Cost inflation, a commitment to meeting student need with university-funded financial aid, and new demands for services of all kinds continue to drive more than $100 million in new expenses for the university each year.
Meanwhile, since 2008, state funding for public higher education has decreased by 12½ percent when adjusted for inflation, according to a recent report by the Federal Reserve Bank of Boston.
The equation is simple: As costs go up and state support fails to keep pace with inflation, we are forced to make cuts that impact the student experience, and students and their families pay and borrow more.
We continue to work closely with our partners in the Legislature to make our case for why an investment in UMass is an investment in our state’s greatest natural resource, which is talent.
And I want to thank Governor Baker for his recent strong statement of support.
Uncertainty over State funding for our union contracts has been a significant issue in previous contract cycles and had a direct impact on student costs.
Governor Baker’s budget proposal recommends full funding of the State’s share of those costs. That is an important commitment, and one I hope the House and the Senate will follow.
While we recognize the importance of incremental steps and the reality of competing priorities, it is also our responsibility as higher education leaders to support those who have made bold proposals to shift the conversation about funding for public higher education.
I will continue to advocate for any reasonable measure seeking to preserve the promise of affordable higher education and remove the albatross of debt from our students.
That is why I proudly stand with our students and faculty in support of the Cherish Act, which would return public higher education funding to Fiscal Year 2001 levels.
Student affordability, and how we work to preserve it, was the focus of my address last year and it remains our most important issue.
But there are new challenges that threaten our ability to fulfill our mission and guarantee disruption across all of higher education, both public and private.
The most immediate is a looming demographic crisis.
The plunging birth rates during the great recession have caused the number of children reaching college age to begin declining, and, starting in 2026, that decline will be dramatic.
In New England, which has both the lowest fertility rate and highest concentration of colleges in the country, there will be 32,000 to 54,000 fewer college-aged students just seven years from now.
That means colleges and universities will have too much capacity and not enough demand at a time when the economic model in higher education is already straining under its own weight.
Make no mistake – this is an existential threat to entire sectors of higher education.
And New England, unfortunately, is ground zero.
We’ve all been alarmed by the recent closing of several small private colleges, but as described by one recent report, that is akin to water retreating from the beach before the tsunami hits.
Economists and education experts predict that 25 percent or more of all colleges could close or merge in the next 10 to 15 years.
I invited the economist Nathan Grawe, who literally wrote the book on this issue, to speak to university leaders last June.
He stood in the Carney Library at UMass Dartmouth and pointed to chart after chart showing line graphs diving toward the X-axis.
This issue is real.
It will disrupt higher education in profound ways, and directly or indirectly impact every person in this state.
Now to be clear: UMass is in a better position than most.
Nationally ranked public universities may be shielded from the more extreme effects of the demographic decline due to our quality, affordability and scale.
With fewer options, a higher percentage of that smaller population of total students are likely to enroll at UMass.
But the effect on the Commonwealth, with which we are inextricably linked, will be acute.
Our state economy will suffer from fewer college graduates entering the workforce and a contraction in the higher education industry, which is responsible for 125,000 jobs in the state. In addition, more than a hundred municipal or hyperlocal economies depend on the colleges they host.
Even if UMass can maintain our enrollment trend line – even if we significantly increase the number of out of state and international students we attract to Massachusetts – if there are 15 to 25 percent fewer college students overall, we will be challenged to meet the demands of the workforce.
So how will UMass manage through these challenges? How will we evolve and adapt? How will we continue to thrive and contribute?
First, we must continue to strengthen our long-term financial health.
That work is already underway through a series of fiscal oversight and transparency measures that have improved planning, controls and risk management.
We have also increased our data analysis and predictive analytics capacity to improve decision-making.
And we are committed to maintaining financial stability through an all-weather financial profile, with reserves on hand and a positive operating margin.
Citing these efforts, last year Moody’s re-affirmed our strong credit rating and upgraded our outlook, distinguishing UMass from most of our peers.
And over the last six months, a team of business process experts from across the university developed a plan for a new shared services model that will achieve $17 million in annual cost savings in our back of house operations.
These efforts represent a new mode of operation that is more efficient, more data focused and more nimble, all of which will be necessary if we are going to continue to meet our promise of affordable excellence for students.
As that hard work has progressed, we continue to make strategic investments to benefit our campuses.
Last month, we reached an agreement with a developer for the Bayside property in Dorchester that could generate up to $235 million in up-front revenue for UMass Boston.
That represents a 12-fold return on the university’s initial acquisition, which was the brainchild of former board chair Jim Karam.
The development of the Bayside property will create a new gateway to Columbia Point, improve mobility in the area, and attract companies to locate with Boston’s only public research university, creating opportunities for student experiential learning and faculty research partnerships.
It’s but one example of a strategic investment that the Governor,
the Legislature and our Board of Trustees have empowered us to make for the benefit of our students, our institution and the Commonwealth.
Each year, there are examples on all of our campuses, such as the elevation of the computer science department at UMass Amherst to a full college, the construction of a transformative living-learning facility at UMass Dartmouth, the creation of the Fabric Discovery Center at UMass Lowell, and the development of the UMass Medicine Science Park in Worcester.
These projects, and many others, driven by strong leadership and strategic planning by our chancellors, will serve us well in the future.
But we remain at a crossroads.
With the demographic decline, rising costs, and limited access to new funding, our ability to meet the future needs of the Commonwealth and its economy are again in question.
After 18 months of research and study on this subject, it’s clear that our single greatest opportunity to ensure a healthy and prosperous UMass, while still meeting our workforce development mission, is to take bold and intentional steps to make a UMass education more accessible to potential students we are not currently serving at scale.
Because while the Commonwealth boasts the nation’s most educated workforce, our top employers still struggle to find workers with the right skills.
And like many states, Massachusetts is grappling with income and wealth inequality, as well as a troubling lack of economic mobility among certain minority groups.
Only a third of African Americans in the Bay State have college degrees and just a quarter of Hispanics.
Of the total population of people in Massachusetts aged 25 and older, one half do not have a 4-year degree.
And what’s particularly frustrating is that more than 20 percent – approximately 1 million adults in Massachusetts – have some college credit but no bachelor’s degree.
A concerted and highly targeted effort to make a UMass education available to these adult learners is the answer to a number of issues:
- Addressing the workforce skills gap
- Meeting employer demand
- Improving economic mobility for Massachusetts residents
- And ensuring that UMass continues to thrive for generations to come.
Over the next several months, I will be meeting with senior leadership and faculty on each of our campuses to outline a plan for the creation of a new online college focused solely on adult learners.
Last Fall, we presented the Board of Trustees with a model that will allow us to rapidly scale this platform through strategic partnerships, while implementing best practices in digital education for adult learners.
By offering degree completion programs, rapid response to workforce demand, and customized workplace credentials for employers, we will significantly enhance our contribution to workforce development in Massachusetts.
And the net revenue generated from the new college will be returned to the campuses to sustain our core mission and our broader contributions to the Commonwealth.
At the same time, our award-winning, campus-based programs will continue to serve hybrid and full-time online students who seek selective bachelor’s and master’s programs.
President Emeritus Jack Wilson, who is with us tonight, helped UMass achieve national acclaim as a leader in online education, providing the foundation on which we will now build.
With that experience and expertise we plan to create an online platform with a national profile for educating adult learners.
Further enhancing the Commonwealth’s leadership position as a hub for education technology, it will also be accessible to our partners.
We are grateful for our strong relationships with our community colleges and we will build on those collaborations through this initiative.
Several of our excellent community college presidents are in attendance tonight.
So how do we know this will work?
Because others are already doing it. And they are doing it here in our Commonwealth.
Out-of-state institutions without our same reputation for academic excellence are enrolling adult learners in Massachusetts in the types of programs we seek to offer.
Southern New Hampshire University enrolls an estimated 15,000 Massachusetts residents.
That is despite the fact that more than 50 percent of Massachusetts adult learners enrolled in fully online programs say they would have enrolled in a similar UMass program if it were offered.
By focusing on education for adult learners, Southern New Hampshire’s enrollment has surged to 93,000 fully-online students, compared to 5,600 at UMass.
And new competition is entering our market, bringing the same technology, wrap-around student services and marketing capacity as Southern New Hampshire.
Purdue Global and Penn State World Campus are actively recruiting in Massachusetts. They, along with Arizona State and the University of Maryland, have demonstrated that public universities can scale online platforms quickly with the right model.
The time for us to act is now.
It’s predicted that over the next several years four to five major national players with strong regional footholds will be established.
We intend to be one of them.
As we pursue this goal, I’m reminded of that line from the Saxon Report – that this may “seem to some a radical notion.”
But I’m also reminded of another passage in that report:
The authors wrote, “We believe that the University’s leaders have at times been too timid in their advocacy … Too willing to allow the very real obstacles which confront them … to dampen their resolve and lower their aspirations. Resolute action now … can give the university the opportunity to reach its full potential.”
It is time, once again, for resolute action.
We owe it to ourselves and to this Commonwealth to lead through the coming disruption, and to emerge stronger on the other side.
We must take bold and decisive steps to ensure that we continue to fulfill our critical mission of access, opportunity and excellence, to remain the world-class public research university the Saxon Commission envisioned 30 years ago – the world-class public research university this Commonwealth needs and deserves.
Note: The posted version of this speech includes an updated figure for the percentage of UMass alumni who remain in Massachusetts after graduation.