Purdue University President Mitch Daniels says the school will continue its focus this year on affordability and controlled spending. In his annual open letter to the Purdue community, Daniels says the school will conduct a space utilization study, and consider new construction a last resort.

Purdue University President Mitch Daniels' Open Letter to the Purdue Community

To anyone hoping that the year just past would see a return to “normalcy” in the once-secure world of American higher education, 2014 brought no comfort. Each of the difficulties and criticisms that have arisen over the last few years continued and if anything were amplified. Total national enrollments fell by more than a percentage point for the third straight year. Community colleges and proprietary schools were hit the hardest, but no sector was immune. Even Ivy League universities saw drops in applications, with Dartmouth’s down 14%.

A host of schools, public and private, reported severe financial problems. Moody's found that one in ten four-year universities is facing “acute financial distress,” and downgraded the credit rating for dozens of them, and for the sector as a whole. Faculty layoffs are no longer unusual: Colleges like Georgetown (Ky.), Quinnipiac, and the University of Southern Maine undertook some of the largest. Some smaller schools, such as Virginia Intermont, closed completely.

At the other end of the size spectrum, trouble also abounded. The University of California system is more than $18 billion in debt. Its leaders have asked for a commitment to five straight years of 5% tuition increases, sparking a contentious statewide debate. Public support for higher education, cut dramatically in many states over recent years, is far from a complete explanation, but has contributed: Funding is down 20% in Nevada, 28% in New Hampshire, and 32% in Arizona, since 2008, for instance.

As one consequence, tuition levels and student debt continued their ascents, although at slower rates than in the recent past. uitions still outpaced inflation, and a record number, almost half of all applicants, declined admission to their first-choice school for cost reasons.

The class of 2014 was labeled “the most indebted ever,” with more than 70% leaving school with loans averaging an all-time record of $33,000. The problem is not offset by increases in earning power: While student debt jumped 35% between 2005 and 2012, the median starting salary dropped by more than 2%. Historically high percentages are unemployed, and a discouraging 44% of recent graduates are working in jobs that do not require a college degree. Forty-five percent reported that they had resumed living in their parents’ home.

But more alarming to me than any of those statistics was a finding by the Gallup Survey in October. The percent of Americans who believe that a college degree is “very important” has plummeted, from 75% in 2010 to 44% today. With critics relentlessly pointing out the lack of results or demonstrated quality to justify the soaring costs, this stunning diminution is unlikely to reverse as quickly as it came.

The year closed with another barrage of attacks: A highly promoted CNN documentary titled “Ivory Tower” was devoted to questioning “the cost, value, and methods of higher education in the United States.” A Washington Post column concluded, “A Reformation is coming, and its message will be the same as it was 500 years ago: Don’t outsource your future to a big institution.” Any institution still in denial or disdainful of these concerns runs the risk of becoming the next Southern Maine or Virginia Intermont, and would probably deserve its fate.

THE YEAR AT PURDUE

I think it is accurate to say that our university, so far, has stood somewhat apart from these dreary trends, sometimes by virtue of inherent strengths, in some instances because of actions we have all taken together. Operating now under the banner “Higher Education at the Highest Proven Value,” we have accepted the legitimacy of the concerns now so prevalent, and the responsibility to address them actively wherever possible.

On the measures of success on which observers and regulators now increasingly focus, our progress is significant. Four-year graduation rates have climbed some 10% in just five years, and look likely to pass 50% this year. Our six-year graduation rate has also grown sharply, now standing at 74%. Very encouragingly, our retention of students from freshman to sophomore year (93%) and sophomore to junior year (86%) has reached record levels, implying further improvements in on-time graduations.

With tremendous assistance from our faculty, who offered an unprecedented number of required or popular courses, summer credit hour enrollment has risen 19% in the last two years. This result did not happen easily, and ran counter to a national trend. But if it can be sustained, it will deliver yet another powerful boost to graduation and progress rates.

The academic readiness of entering students has continued its strong improvement, with the 2014 entering class, though slightly larger than its recent predecessors, again the strongest ever, and again with test scores and overall profiles well above all our sister Indiana public universities. (I thought it best to state that obliquely!) Without question, the rising caliber of our student body is a principal driver of these better success rates, but we will not rely on ever-increasing selectivity to produce those successes; more on this later.

Our remarkable faculty helped drive these student achievements, and also turned in another year of excellence in expanding the boundaries of knowledge. Total research funding reached a near-record $389 million, with dozens of individual recognitions ranging from our senior leaders, led by Graham Cooks’ selection for the most recent Dreyfus Prize in Chemistry, down to young talents like Tamara Moore and Jeff Karpicke, recipients of the Presidential Early Career Award for Scientists and Engineers (PECASE). Five professors were named to the National Academy of Inventors, and Jan Allebach became our newest member of the National Academy of Engineering.

Along with faculty distinctions, student achievements are a mark of our overall excellence, and here, too, progress was noteworthy. Alerted by a former student that Purdue had no adequate concerted program to identify, encourage, prepare and assist promising student scholars, we organized such an effort under the label NISO (National and International Scholarships Office). Its first cohort has already won Purdue’s first Mitchell Fellowship, our first Gates Cambridge Finalist, and produced a record number of finalists for such awards as the Fulbright, Marshall, and Churchill. (Ours is the only university in the country with two Churchill finalists.)Gallup-Purdue Index Key Findings

Confident of what we will learn, Purdue seeks to be a leader in the new Era of Accountability that is rapidly coming to higher education. Last year saw the inaugural Gallup-Purdue Index, the largest data base ever assembled to evaluate the life success of American college graduates. The Index generated a constant stream of prominent national press coverage, through regular reports of its findings, and positive commentary by authors and columnists who have studied them. But national recognition for Purdue, while welcome and helpful, was neither the motive nor the principal value of the project.

As was the intent from the outset, we became the first university to commission a contemporaneous study of our own alumni, for comparison to the Index’s first-ever national benchmark. As we strongly suspected, we found that, in every dimension Gallup measures, Purdue alumni are thriving in life compared to other college graduates. This, of course, is a tribute to the faculty, administrators, staff, donors, and all those who built the university that prepared these high-achie

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