ÑÇÉ«Ó°¿â

Good morning and welcome to the start of our new year together.

I've been thinking a lot about ÑÇÉ«Ó°¿â's history. Maybe that's because a small group has started planning the celebration of ÑÇÉ«Ó°¿â's 150th anniversary in 2025. Or maybe it's because I had a sneak peek at Dr. Charles Cashdollar's history of ÑÇÉ«Ó°¿â, which should be in print in time for that sesquicentennial. Or perhaps in a time when ÑÇÉ«Ó°¿â, and all public higher education, faces unprecedented challenges and the need to adapt and change, I find it important to look to the history of this remarkable university.

I have a lot to cover this morning. First, though, I note that this is the eighth time I have stood before you to open the academic year. Of the 14 presidents who have led ÑÇÉ«Ó°¿â since World War II, only twoDr. Willis Pratt and Dr. Lawrence Pettitdid so more times, at least so far.

I am not bragging. I mention this, because some of the things we need to talk about today and do this year are very difficult. I want to make sure you understand something.

I am still here not because I haven't had opportunities to leave and not because there aren't places without the challenges we face.

I am here because I believe in you. I believe in ÑÇÉ«Ó°¿â, and I believe in our mission. I am here because I know that we can and will come together to do whatever is needed to transform peoples' lives.

So, let's get to it. I think you know that I'm an optimist by nature and that I like to emphasize the positive, but today I must be candid and direct about where we are and what we need to do.

I think you know the basics.

ÑÇÉ«Ó°¿â's enrollment last year was 26 percent smaller than it was seven years ago. Population in our key service areas, in Pennsylvania, across the region, and nationally, has declined, leading to fewer new high school graduates and fewer mid-career professionals that need our undergraduate and graduate programs. The competition for these students is intense and some colleges and universities are mortgaging their futures to get enough students to keep their doors open today.

Demographic projections show that the decline in new high school graduates will slow for a couple of years but will accelerate after 2025. Then, add the significant changes in international conditions and that colleges with declining enrollments won't be hiring as many of our new PhD graduates. The likelihood in our professional lifetimes of returning to the days of a 15,000+ enrollment is slim to none.

While enrollment has declined 26 percent, our education and general expenditures have declined only 4* percent.
Total education and general expenditures per full-time equivalent student increased from $14,360 in 2012-13 to $19,999 in 2018-19 or by 39 percent. Our total employee headcount went down from 1,553 in 2012-13 to 1436 in 2018-19just 6.3 percent.

The current governor and legislature have consistently increased appropriations for the State System and thus ÑÇÉ«Ó°¿â, which has partially reversed the deep cuts made under the previous governor. Still, the Commonwealth covers only about 25 percent of ÑÇÉ«Ó°¿â's education and general expenditures27 percent, if you include performance funding. Without a doubt we appreciate the increased investment, but I don't expect that fraction to change significantly anytime soon.

Connect all those quantitative dots to see that our students are paying an ever-larger share of the total cost and more than ever for their ÑÇÉ«Ó°¿â education.

And the numbers I mention are just from the education and general budget, which means they don't include the cost of housing or dining or health and counseling services.

It's important to note that the price to attend ÑÇÉ«Ó°¿â is still much less than the name-brand universities with which we competeuniversities that provide an educational experience not better than ÑÇÉ«Ó°¿â. Nonetheless, ÑÇÉ«Ó°¿â students are working more hours, are borrowing more money, are experiencing more stress, and are too often stopping out or dropping out and not finishing their degrees. That means we are failing them.

It would be nice if there were a single cause or a simple solution, but there just isn't. There are those externally and some among us who like to say otherwise. You know the sort of things out there. If only the state provided more funding for ÑÇÉ«Ó°¿â. If only the federal government provided more financial aid. If only ÑÇÉ«Ó°¿â hadn't built new housing. If only the faculty or the administration or the State System didn't get paid so much. If only society valued higher education like they once did. If only ÑÇÉ«Ó°¿â didn't charge per-credit tuition. If only today's students were smarter or tougher.

Wouldn't it be nice if it were that simple? But the situation is complex. If there were easy answers, we wouldn't need to have this conversation.

Minutes ago, I said I would be candid and direct. I am sorry if the reality depressed you. But before you give up, remember what else I said. I am here because I know that we can come together to do whatever is needed to transcend the constraints and challenges. I know we can do the right thing for our students. We just can't do that without a clear understanding of what these constraints and challenges are. Resolution requires putting our students at the center of our thinking, our decision making, and our actions.

The good news is that we are already doing many of the right thingstaking action and making changes, both large and smallto address the situation.

Our bold step last year, the University College, is bringing extra, focused support to all of our students, particularly those who are most vulnerable. It also provides a customer-friendly model and an extraordinary experience designed for undecided students. It removed barriers and the stigma of being uncertain about the future. We now call those students explorers, not undecided.

With support from ÑÇÉ«Ó°¿â and others, the Board of Governors froze tuition for only the second time in history, even though that increased universities' financial stress.

Gifts to the Imagine Unlimited Campaign combined with the Foundation for ÑÇÉ«Ó°¿â's strong stewardship and greater flexibility granted by the Board of Governors have resulted in more scholarships for ÑÇÉ«Ó°¿â students than ever before. Colleges and departments are reaching out to students and potential students to help them solve their challenges, working with Financial Aid, the Bursar (Student Billing office), and others across unit and divisional lines to creatively overcome bureaucratic and organizational barriers.

Departments are finding innovative ways to help studentslike the Anthropology faculty using open source course materials to keep textbook costs down. Or, the Counseling Center working creatively with Vice Presidents Charlie Fey and Tom Segar and with our graduate programs in psychology and counseling to get more support for students without further increasing the wellness fee they pay.

Our renewed focus on student retention and persistence, and the hard work that goes with that focus, seems to have resulted in a small but significant increase in retention for this fall. I could go on and on and on about the good work.
We have been gently and incrementally building the new ÑÇÉ«Ó°¿â, working to reduce our expenses to bring them more in line with the size of our current student body. It is now imperative that we harness all this good thinking, creativity, energy, and action to focus and dramatically accelerate our progress forward.

System Redesign is moving to a place where ÑÇÉ«Ó°¿â has, for the first time, a chance to determine its own destiny, but we must be accountable for the results of our decisions and success. If we are not, then the State System will step in and determine our destiny for us. So, the time is now.

Here is what happened in the last three months.

In the email message I sent on July 25, I told you about the combination of a larger-than-expected enrollment decline, in addition to the tuition freeze, producing a projected general fund shortfall of about $21 million this year.

After some very painstaking work by President's Cabinet and the Budget Office, we have balanced the budget by implementing $15.2 million in permanent reductions and $5.1 million in one-time reductions. This is challenging work, and we all will feel the impact.

Vice President Segar has worked with Aramark to reduce their cost of operations and hence, ultimately, the subsidy from ÑÇÉ«Ó°¿â and the cost to our students.

With the Foundation for ÑÇÉ«Ó°¿â, we are nearing the end of a years-long plan to reduce the cost of housing for our students.

We have undertaken and nearly completed a significant and detailed analysis of enrollment and enrollment decline. This will guide our thinking as we develop a new pricing and financial aid strategy proposal to send to the Board of Governors in April.

This year I will ask a representative group to work on plans to significantly enhance student success and to reduce expenses by focusing on our most important priorities. We can't continue doing things as we have done in the past unless they prove to be what students need to achieve their goals and succeed.

We will regularize our approaches to supporting students. We can no longer afford the inefficiency of every college having its own practices for scheduling courses, assigning workload, or allocating scholarships.

While I know that our colleges and departments have had the best of intentions by rewarding students through scholarships, we have an Enrollment Management staff that is better equipped to make the most of every philanthropic or institutional aid dollar invested in students, particularly as it concerns recruitment and retention. Centralizing the scholarship award process means our Advancement and Foundation staffs can count on consistent donor stewardship and accountability and that we'll have accurate and appropriate data for promotion and reporting.

We will review the outcomes, cost, effectiveness, and mission centrality of all academic and nonacademic programs and locations. Not all programs can continue, at least in their current form. We will review the curriculum to look for ways to renew, share, and increase effectiveness. We will place those that aren't performing into moratorium, because we can afford to offer only programs that students both need and want.

As I said, we've made good progress on retention, but we've not made enough. It's one thing to be student friendly on an individual basisand I know you all are, individually, student friendlybut we don't deserve to wear the label student-focused if we aren't serving students in a systematic way. We cannot say that we are student friendly and then send students on a wild goose chase to be referred from place to place to place.

We will take a nod from our new University College model and find more ways to improve our customer experience, so that we can say with conviction that we consistently demonstrate student-friendliness.

I've appreciated the work that so many of you have done to reach out to make sure students remain on track. From here on in, that must become something you do every single day and not in response to the moment I demand a weekly report from the deans.

You must do it in a way that supplies us with the data we all need to keep pushing forward and to ensure we always, always provide an experience that students deservethe kind of experience that generations of alumni say is in their hearts and memoriesalumni who attended this university long before most of us were here. And, I encourage you to encourage all of your colleagues to do the same.

I have a simple statement of principle that I've been using to help guide my thinking. For any student we admit to ÑÇÉ«Ó°¿â who is willing to work hard to better themselves, we will order all of our resources and all of our work to ensure that student is successfulboth here and after they graduate.

That's who we say we are. That's what generations of alumni say we were to them.

I'd like to fill you in on what I told our newest faculty members at their orientation earlier this week.

It was about the ÑÇÉ«Ó°¿â brand.

Yes, I said it. Brand.

You'll recall I announced last year that we established the Marketing and Communications Division, which dug into the work of defining our essence and then capitalizing on it. Many of you participated in the qualitative and quantitative portions of the research. Even more students and alumni responded to surveys and focus sessions.

So, to our new colleagues, I suggested that talking about the brand might seem odd to them. After all, they are here to teach and research and publish or manage a business process or orient students or oversee resourceswhether they are financial or human or academic.

You, too, probably wonder what the brand has to do with you.

It has everything to do with you. It has everything to do with us, as a community.

Because a brand isn't a logo or a tagline. A brand is what people think about you. It's about who you are. The simple truth. Sometimes, you might suspect the truth, but it's better to know it. So we took the time to dig in and confirm it with data.

I want to share with you the rationale we developedan interpretation of the data we collectedthat encapsulates the ÑÇÉ«Ó°¿â experience.

There's potential for something greater in all of us. The capacity to grow with a purpose bigger than ourselves. To become something we never thought we could be. Everywhere you look, we're pushing ourselves and each other to dig deeper, work harder, and reach further. Strengthening our resolve to tackle any challenge and weather any storm.

You've already got what it takes. We're just here to take you further. So, no matter where you go, your ÑÇÉ«Ó°¿â experience will carry you throughenriching your life, your community, and the world.

Now, let me share a sample passage from our recruitment materials that puts that rationale to work.

At ÑÇÉ«Ó°¿â, you'll find yourself at the heart of a community as unique as you are.

Where professors are as passionate about uncovering potential within every student as they are about teaching and research.

Here, our students are encouraged to find their footing well beyond their comfort zone. We support you every step of the way.

And no matter where you've come from or what brought you here, we all share an enthusiasm for hard work and accomplishment.

This is who we are.

Generations of alumni have told us this has been their ÑÇÉ«Ó°¿â experience.

In these difficult timeseconomically, socially, and for some students, emotionallychallenging them to grow and helping them to grow must work hand in hand.

In our present budget circumstances, we must get back to basics. We must own and embrace what our students and alumni say is the essence of ÑÇÉ«Ó°¿â. This is what will distinguish the new ÑÇÉ«Ó°¿â in a sea of sameness.

So, here's where I'm placing my hope. No matter what your role here is, it is your business to care for our students. If you see a gaping hole of service and think "It's not my job," that's just not acceptable. Speak up. Reach out. Pick up the phone. Knock on a door. Coordinate. Collaborate. Find better ways. Do your job. Get it done.

Now, I happen to know every one of you can do that. I know it, because so many people since 1875 have said their ÑÇÉ«Ó°¿â experience has been based on genuine caretough academics with access to help and people who guide the way.

Times change. Methods change. But we can do this today just as those who came before us have done it.
I want you to be proud of the work you do every day. Know that I am. Our work here centers around students growing into the best versions of themselves. Not allowing them to fall through the cracks. Not going easy on them academically, but not allowing them to flounder, either. I'm talking about tough love.

As you think about that, I want to leave you with some parting inspiration as well as my best wishes for a strong start to this new year.

*The 2018-19 Midyear Budget Report, available at , and the 2018-19 financial report, for which the final audit has not been completed, serve as the source of all data cited in this presentation.