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Presidential Update

Dear Colleagues,

Our mission is built on the promise that broad access to the highest quality educational and research experiences will reap substantial economic and societal benefits for the entire state. The latest UO economic impact figures illustrate the magnitude of this university’s influence on our local, regional and state economy. Direct spending by the UO, our students and visitors accounted for more than $1.2 billion in fiscal year 2011-12, and the total impact of the spending was $2.6 billion according to UO economist Tim Duy. There should be no doubt in anyone’s mind about the financial return on the state’s investment in higher education. 
But, in this era of shrinking state funding for public higher education, that dual promise of affordable access and high quality are more difficult to ensure. This trend is not unique to Oregon, and as in Oregon, university systems around the country are considering new ways of doing business. To remain competitive, we have to explore new models to provide needed resources and operational flexibility.
As the Legislature takes up higher education reforms during the 2013 legislative session, the proposal to create institutional boards for the University of Oregon and Portland State University will be one part of that discussion. Institutional boards are part of the solution for the UO and PSU because they could create the promise of increased flexibility to manage our individual challenges. I believe the boards, if properly structured, will be able to act more efficiently to advance our respective academic and financial goals, which will also serve to advance the broader educational goals for the entire state.
A tremendous amount of effort over this last year has gone into developing the foundation for an alternative model of governance for Oregon universities. The 2012 Special Committee on Higher Education has put forward a solid framework for institutional boards for further development and passage in the 2013 legislative session. There are many issues such a change raises. Our leadership team at the University of Oregon has examined the significance of this policy change from many perspectives. Some of that thinking is contained in issue briefs available at gcr.uoregon.edu. Among the topics explored are price and affordability, enrollment balance between resident and non-resident students, and authorities needed to efficiently manage operations and finance capital projects. 
A well-conceived board must strike a balance with the right structure of membership and authority to strengthen our universities’ ability to address the unique challenges and opportunities of our individual institutions, with a high degree of transparency, increased public accountability, and greater efficiencies to support the state’s educational and economic development goals. At the same time, we need strong partnerships with our colleague public institutions in Oregon and with our community college partners. With the governor’s vision for education reform at every level, I believe we can move forward. We need to continue to build shared services that enhance efficiency and take advantage of our many mutual goals. The state’s 40-40-20 goals will most readily be achieved by active partnerships among the public universities and community colleges.
I look forward to working with Oregon’s policy makers in the coming months to make post-secondary education a more accessible, affordable and quality opportunity for our future citizens and workforce; and in so doing we can continue to be one of the state’s most important economic engines.
Warm regards,
Michael Gottfredson
2/12/13

And indeed, the latest report from the Census (via Betsy Hammond in the Oregonian) shows the return to a college degree (albeit ignoring selection effects) grows from $24K a year just after graduation to $30K a year after 30 years of experience. Including the opportunity cost of foregone wages, an in-state degree costs maybe $160K. That’s a rate of return of  ~15%-20% a year and it has held up for decades, despite huge increases in the proportion of people getting degrees. And it ignores the consumption benefits of college fun and of being a more educated person. Pretty far from a higher-ed bubble. We are the most productive sector of the US and the Oregon economy. Excluding the “Football and Conflict” trivia courses, that is.

One Comment

  1. Awesome0 02/12/2013

    Most wage/earnings differential also discard the non-employed individuals in the calculations. There are also large employment difference, which only serve to increase the rate of return.

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