Remarks to the Senate Higher Education Subcommittee

February 22, 2018

Good afternoon Chairman Peeler, Sen. Jackson, Sen. Campbell, Sen. Martin, and Sen. Scott. It is a pleasure to be with you this afternoon.

I would like to quickly recognize Trustee Hubbard, Board Secretary Heath, members of my finance and administration team, as well as the Chancellors of our comprehensive campuses and Palmetto College, who you will hear from soon.  

Mr. Chairman, before I begin I would like to emphasize that although the state government’s support for higher education has abated over the last decade, we recognize this subcommittee’s sustained support for our institution’s work. We thank you and the current and former members of this committee for your efforts on behalf of higher education.

Today, I want to make the most efficient use of your time by simply beginning with an honest and frank discussion…one that hopefully re-starts 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 and support:

  • We can hold tuition flat for South Carolinians;
  • We can educate even more South Carolinians;
  • We can educate even more African-Americans and other minorities;
  • We can continue to create more programs that meet the state’s employment needs; and
  • We can continue to achieve greater excellence for the state’s top-ranked global university.

If you endorse some or all of these proposals, this is what we need from you:

  • Enact regulatory reform that allows universities to establish auxiliary authorities with limited scope.  The Efficiency Act has been introduced and allows us the freedom and flexibility to operate without duplicative bureaucratic processes that drive up costs, particularly when private dollars are being used in housing, athletics, parking and other auxiliary units that, by law, don’t use tuition or state appropriations.
  • Establish baseline in-state student funding levels for the regional, comprehensive and research sectors. South Carolinians at USC Columbia should be funded at the same per-student level as those at Clemson; those on our comprehensive campuses should not be supported less than other comprehensive colleges in our state; and, students seeking their two-year degrees from our Palmetto College campuses should receive the same support as those attending our technical colleges.
  • Develop a new funding model that rewards institutions for helping to meet the needs of the state. The state funding formula was abandoned 15 years ago. Tell us what your goals are, tell us how to best serve the state and we will excel. If we don’t, we also accept that our funding could be reduced. However, we must know the rules of the game. Begging for crumbs on a project-by-project basis is no way to plan for future success.
  • Increase investment in state funded need-based financial aid that would reduce debt for students from low-income families. State support of high performing students is superb with the lottery scholarships. Now it’s time to similarly support those who deserve to go to college but can’t because of family income.
  • Resume state investment in state-owned assets and infrastructure through a capital bond bill for higher education. Capital needs for state-owned assets at our colleges and universities are skyrocketing. We simply cannot allow our campuses to end up like our roads.

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.

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

This is a watershed moment.

We need the Senate to help us. And we certainly don’t need the Commission on Higher Education (CHE) making it more difficult by falsely accusing our institution of excessive spending and restricting access to South Carolinians. Simply put, these assertions are wrong.

We’ve earned national recognition for efficiency—eliminating 53 programs over the past decade; made major decisions about outsourcing as we did with our IT services through a partnership with IBM; and last year we announced a 3% across the board reduction to all unit budgets to reinvest in the academic mission.

Despite being among the lowest for state financial support in the country, USC remains affordable. In fact, students 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.

Furthermore, 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. Ninety percent of South Carolinians that complete an application to USC Columbia are offered admission into one of our programs. In fact, 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.

Since 2008, our state has suffered the 4th largest cuts to higher education in the nation.

Since I became president, undergraduate African-American enrollment on the Columbia campus has grown by nearly 350 students, 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.

Yes, it is true we’ve grown the non-resident population significantly, but the increased revenue helps make up for what the state no longer provides. Non-residents help us keep costs down for South Carolinians, providing $5.7 million a year in scholarships for resident students, and shouldering more of the cost of building new facilities, about $9 million per year more.

We do not send resources for in-state students out-of-state. All we do is “right-price” out-of-state tuition so that it continues to replace plummeting state appropriations. Airlines, for example, have a host of pricing strategies for the business and leisure traveler; or those with fixed vs. flexible dates. Their goal is to fill the plane. Planes with empty seats cause airline carriers to shut down. But unlike airlines, USC has never, and will never, bump an in-state student for one from out-of-state.

Access and affordability are two factors that must be considered, the third is opportunity. A USC degree doesn’t just make a difference, it makes the difference. Recently, the Brookings Institute has lauded USC for creating social mobility for our graduates and the Education Trust commended us for improving graduation rates for minority students.

  • 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.
  • Columbia’s six-year graduation rate (75.2%) is among the highest in the nation, particularly for public institutions, exceeding the national average by nearly 20%, and our graduation rate for African-Americans is 8%--twice the national average. In fact, 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 students.
  • USC is also 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. In addition, we are growing the state’s economy through partnerships with companies like Boeing, IBM, Siemens and Samsung.

Despite all of these incredible successes, and our unrelenting work as good stewards of taxpayer and tuition dollars, state funding represents the most significant higher education issue in South Carolina this fiscal year. In fact, since 2008, our state has suffered the 4th largest cuts to higher education in the nation.

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.

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 state government, despite the work of this subcommittee, 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 has been no funding model, no funding formula, and worse, no meaningful or comprehensive dialogue.

While surrounding states invest significantly more in the education of their citizens and invest billions in higher education infrastructure, South Carolina’s recurring support of higher education remains stagnant—in fact it loses ground to unfunded mandates; $77 million over the past 10 years in added health care and pension costs. If the state won’t provide the funding, these must be covered through tuition increases. Moreover, our state has not invested in facilities through a bond bill in nearly 20 years. Meanwhile, rising costs, maintenance and the cost of educational excellence continue to be passed on to students and their families.

Together, we must meet this watershed moment. We must provide more access, maintain affordability, create opportunity and boost our state’s economy – while taking the onus off our families. We must move past short-term requests to long-term solutions. Our state, our families, 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.