This unusual July Chronicle serves to inform you of critical information that will affect your professional life at CSN.  PLEASE take time to read this and make sure that your colleagues have as well. Some of it will be elaborated upon at Convocation next month, but you need to know about these changes on CSN’s horizon. 

Compensation and Contracts

• CSN is complying with legislative direction on contracts, fringe benefits, furloughs and salaries. Your new contract is being prepared.  A message from the HR office has been sent regarding the status of contracts and when they will be ready for signing.
• CSN is engaging a contractor to conduct a salary equity and compression study this summer and fall. We expect recommendations by the end of the calendar year. Initial funding to begin addressing equity and salary compression issues has been set aside in the 2013-14 budget. 

Funding Formula

Earlier I reported to you that the Legislature adopted a new funding formula similar to the one we discussed last fall that was proposed by the legislative interim Higher Education Funding Committee. We have more information available now that is important:

• CSN did receive additional general fund allocations through the new funding formula.  As noted over the past several semesters, with enrollment declines we continue to realize a shortfall in registration and tuition revenues;  
• All revenues including tuition and fees continue to be approved by the Legislature as ‘approved revenues,’ which requires any excess registration fee or tuition revenue to have interim finance approval. Institutions will still prepare budgets as usual;
• CSN and the other colleges and universities are now funded based on course completions, not enrollments in classes. Students that drop out of a course or receive a W, reduce CSN’s funding next time the formula is run.  Hence, CSN must address and ensure that students complete their courses and earn a letter grade of A-F. It is important to note that the F grade is included and faculty should by no means diminish course rigor;
• Starting in the 2014-15 academic year, 5 percent of CSN’s state funding will be set aside. CSN can earn it back by meeting certain benchmarks related to transfer, degree and certificate completion. Over the course of three biennia, this element of the budget expands to make up 20 percent. This means that performance will determine $18-20 million of CSN’s budget. Through Achieving the Dream, and other student success initiatives, CSN faculty and staff are positioning the institution for this uncertain future by doing research, evaluation and crafting pilot projects designed to help students overcome challenges and barriers to completion of their academic programs.Although we have a large group involved in these initiatives, I’m aware that some have remained cynical and on the sidelines. I urge you now to use that skepticism to improve these processes and get involved. Everyone will gain if we work together and all of our community will suffer if we fail to make progress.

Enrollment Trends and Deficits

Since fall 2011, CSN’s enrollment has declined, taking revenues with it. CSN completed last year with a sizable budget deficit because enrollment was lower than estimated. This has happened at community colleges across the nation, following historically high enrollments at the height of the recession and then continuous enrollment decline as the economy has slowly improved. In addition, increases in tuition and fees to make up for state budget cuts have not helped. 

For fall 2013, another enrollment/revenue drop is expected. We are planning for a 3 to 4 percent decline, but it is still too soon to tell. 

This trend directly impacts operating budgets, as well as financial planning and forecasting.  Our budget for 2013-14 is a prudent reflection of CSN’s enrollment trends. Our success initiatives, such as ATD, which help students complete courses and programs, will also improve our enrollment numbers, as we continue to communicate the importance of a college degree to the community. 

To help guide CSN’s enrollment future, Noel-Levitz has been retained to facilitate a more systematic approach to recruitment, retention, and student success. During this next academic year, many faculty and staff will be working with Noel-Levitz experts in this unprecedented effort to help us manage enrollments.

Federal Changes and Rule-making

The following reflects several financial aid issues you need to know to help students:

Item 1:  When a student decides to enroll at a college, is awarded financial aid, and then drops out, the financial liability is the institution’s, and under federal regulations, funding must be returned to the Department of Education.  For many colleges and universities in the country, this issue is significant and costly.  Faculty and staff can help by making sure that the student’s “last date of attendance” is accurate, and by avoiding the use of inappropriate W grades.

Item 2:  Federal regulations last July restricted student eligibility for Pell grants to a specific time frame and to the student making Satisfactory Academic Progress (SAP) toward completion.  From this issue arises the matter of measuring and recording SAP in progress toward graduation and financial aid eligibility. 

Item 3:  Interest rates on student loans issued after July 1, 2013 rose from 3.4 percent to 6.8 percent after federal lawmakers failed to reach an agreement before the start of the new fiscal year. Until Congress resolves this issue, it may create another barrier or deterrent for students to access education and complete certificate and degree programs in a timely manner.  From this issue will arise others still undetermined. 

These federal policies and mandates directly impact CSN’s operations, its students and faculty.  You will hear more about them next month and into the academic year. 

Finally, you may have noticed that there has been some discussion in higher education literature and in some regional accreditation reviews, about the precise definition of a contact hour and a credit hour. In the wake of reports about faculty that cancel too many classes or regularly end classes early, policymakers are questioning how to best determine that contact hours are properly met to equate to the required credit hours. This issue affects distance education as well as site-based classes. 

Best, 

 –Mike Richards