Good afternoon, ladies and gentlemen. I’m pleased that you have come to this fall meeting of the University Council and to this presentation on the state of the University. A year ago, my address was based on our strategic plan. I talked mostly about what we would do. The themes this year are progress in implementing the plan and potential for further progress.

Because our progress over this past year has so many elements, I will be able to focus on only a few: enrollment growth, research programs, facilities, wellness and intercollegiate athletics. I will also outline the challenges I see in the years ahead. I will talk about areas in which we’ve made substantial progress and areas in which we may need different approaches.

I have had the privilege of serving as President of UND for three years now; I am pleased to have had the opportunity to work with so many great people. I want to recognize some of them here today.

The University of North Dakota is unique in many respects, but perhaps most notably in that it is a medium-sized institution with an extraordinarily comprehensive array of programs. Our purpose reflects the traditional spectrum of America’s great doctoral research universities: teaching, research and service. UND remains one of the largest, most heavily endowed, comprehensive universities in the very large region made up of North Dakota, Wyoming, Montana, South Dakota, Idaho and Minnesota. UND is consistently rated among America’s best colleges and universities and as one of the very best values in higher education nationally. Perhaps the most important compliment is paid to UND by its students – who consistently rate their experience here as good to excellent. Our success is based on a solid tradition spanning nearly 120 years. We are privileged to serve as part of a great social enterprise that has been the source of most of the great ideas of the past century. We have participated in generating fundamental advances in the sciences, in the arts, and in the humanities, and in the creation of a new information-based economy that serves our nation and the civilized world very well.

On the last few pages of the written copy of this address is a table showing trends over the previous three years for a number of strategic indicators. As you leave the Ballroom today, you may pick up a collection of graphs and charts illustrating still other indicators of success across all strategic areas identified in our plan. These go beyond the accountability measures established by the Legislature following the Higher Education Roundtable’s focus on flexibility with accountability. Copies of this presentation are also available there and both are available on our UND website.

Incidentally, the Higher Education Roundtable has been recognized nationally as an example of how to go about connecting legislative leadership, higher education, and the public/private sector in developing a broad consensus on what a state – and, indeed, a region of the country – needs from its system of higher education. I am very proud to have served as a member of the Roundtable so ably led by Senator David Nething.

The progress report is a product of our Office of Institutional Research, headed by Carmen Williams. Carmen has enthusiastically accepted responsibility for helping us track our progress. Every department and support unit will, in October, present an annual report on its role in helping the University achieve its overall objectives. The data that will serve as the substance of these unit reports are also being provided by Carmen and her staff.

I am extraordinarily pleased to report to all of you that the University of North Dakota has achieved an all-time high enrollment as of the third week of school. This follows a record enrollment in the spring of 2002 and a record enrollment for this past summer. How did this come about? A number of key action strategies are spelled out in our strategic plan, and a number of key people have been at the center of implementing them. This past year, Registrar Nancy Krogh, Philip Parnell, and indeed all the faculty, department chairs and deans have been involved in establishing articulation agreements with all of the two-year colleges and schools within several hundred miles of Grand Forks. The magnitude of this undertaking is astounding. Some 776 individual program-to-program articulation agreements with more than 30 community colleges have already been reached. I’d like to ask Nancy Krogh and Philip Parnell, representing all of the people who have been involved in this project, to stand and be recognized.

And hasn’t Enrollment Services and Admissions done an outstanding job this year? The work of these groups, again along with the work of lots of other people – everything is connected to everything else – has resulted in the largest freshmen class in the University’s history. Would Alice Hoffert, Kenton Pauls, Heidi Kippenhan, and the members of the Enrollment Services and Admissions staffs please stand be recognized?

The enrollments we report during the third week are just part of the story. Jim Shaeffer and staff – would you all please stand along with Bob Boyd – our whole Continuing Education enterprise is one of the nation’s best. Nothing that there is some overlap with the numbers reported to the Board of Higher Education this fall, there will be nearly 20,000 registrations in various workforce training and other continuing education programs this year.

The overall excellence of the University’s array of academic programs is undoubtedly at the heart of a surge in enrollment that has now spanned four years. All of what I am describing here today depends absolutely on outstanding academic programs and outstanding faculty. We have both. I would like all faculty to stand and be recognized by the rest of us. We continue to build our array of programs on a strong liberal arts foundation, the value of which is obviously widely recognized. This fall, we will be celebrating this liberal arts foundation in a conference being organized by the Council of College Faculties throughout North Dakota. Jim Grijalva serves as a member of the Board of Higher Education again this year, and has played a leadership role in putting this conference together.

The University has dozens of accreditations of individual programs. All of those that were up for reaccreditation this year, including NCATE, have achieved it. Would Dean Dan Rice and Peggy Shaeffer stand and be recognized please? Dean Rice also leads our NCA reaccreditation process, now well under way. Dan and Peggy represent those who have organized self-studies, endured external visits and, in general, kept programs at levels deserving reaccreditation. Other programs reaccredited this year are shown in the report prepared by Institutional Research.

Our four-year enrollment surge has also been fueled by a number of outstanding new programs at all levels. Expansion of the capacities of our doctoral programs in areas like educational leadership and teacher education, as well as the establishment of some nine new graduate programs, including new doctorates in nursing, criminal justice, communication disorders, communication and public discourse, physical therapy and others, will sustain a healthy enrollment growth with an emphasis on graduate programming in the future. One of our newest doctoral programs is in physical therapy, which will, itself, generate 48 doctorates per year beginning in 2005. Provost John Ettling has led the overall effort along with Vice President David Wilson.

We continue to be pleased with the growth in our summer programs under the leadership of Stacie Varnson. We look forward to the development and evolution of "Collegeville" now being explored by a group headed by Deb Melby.

It is indeed true that everything is connected to everything else. A wide variety of people and support programs have combined to help us achieve enrollment growth and to expect even more. Some examples: We have an extraordinary Campus Crisis Coordination Team headed by Jerry Bulisco and Lillian Elsinga, which helps immeasurably to create a sense of community and a supportive environment throughout the campus. We have some of the finest support-service programs and support-service personnel in America; would all staff stand please so that your role can be acknowledged.

We have enjoyed a great effort to project a positive, consistent image of the University through our marketing and such things as our Web site and graphic standards under the leadership of our University Relations Office. Jan Orvik, Jim Penwarden and Dave Vorland, will you stand and be recognized, please?

One additional component to our enrollment growth, particularly one that relates to diversity, is our extraordinarily comprehensive Native American Programs Office headed by Leigh Jeanotte. This coming year, the University will serve approximately 400 American Indian students.

We have enjoyed another year of significant progress in building our base of sponsored programs. I would like to ask some additional folks to stand: Will Gosnold, who stepped in as interim director of the Office of Research and Program Development; Gerry Groenewold, who heads our Energy and Environmental Research Center; Leon Osborne, who heads our Regional Weather Information Center; Mary Wakefield, new head of the Center for Rural Health; and John Shabb, for his work in securing the BRIN grant – the Basic Research Infrastructure Needs program to help us build our biomedical research capacity throughout North Dakota – to the tune of some $6 million. These are some of our sponsored program leaders. Please remain standing.

I would also like to ask Dr. Mike Ebadi, who, in addition to his already considerable R&D sponsored program work, brought a new positron emission tomography scanner program here – one of only a few in the entire country.

I would also like to recognize Dr. Bill Sheridan, who invented our Seed Money Program which has resulted in more than a million dollars being expended on exploratory projects by faculty. These have to date generated some $12 million in new research proposals and nearly $6 million in grant awards.

I want to say that Provost Ettling and I – and indeed our entire leadership team – recognize that learning is the most important part of our mission. Since involvement in learning is clearly the best way to learn, we should all see teaching, research and service as part of one and the same thing. Our students deserve to be helped to develop lifelong learning skills by exposure to faculty who practice what they teach.

No research we do here is more important than research into ways and means of improving learning. I am proud that we are the recipients of a Bush Teaching Scholars grant program directed by Libby Rankin. Libby, will you please stand and be recognized for the role you continue to play in fostering innovation in teaching and learning?

I am very proud of our curricular innovations here at the University: those being developed by our Bush Teaching Scholars, those already in place in our Medical School, plus our innovative Integrated Studies program. These are just a few. Will Dean Wilson and Tami Carmichael please stand?

While certain parts of our enterprise – notably the Energy and Environmental Research Center – have drawn a large fraction of the share of our research and development dollars, many new players are emerging in other areas. I want to express my appreciation to leaders like Dennis Elbert of our College of Business; John Watson, new dean of our School of Engineering; Martha Potvin, dean of the College of Arts and Sciences; Elizabeth Nichols, dean of the College of Nursing; David Wilson, dean of the School of Medicine and Health Sciences and Vice President for Health Affairs; Bruce Smith, dean of the John D. Odegard School of Aerospace Sciences; Jerry Davis, dean of the School of Law; Dan Rice, dean of the College of Education and Human Development; Joseph Benoit, dean of the Graduate School; and Jim Shaeffer, dean of Outreach Programs.

Dr. Peter Alfonso will begin his duties as Vice President for Research on October 1. This is a new position for UND, and it commits us to reaching for greater heights as a research university. I want to thank David Wilson and all of the members of the search team who will now become members of a new Research Council for the University.

Shown here is the record of proposals processed this past year; it’s a cumulative frequency distribution. Notice the nice pattern of increase in proposals by month, and in this next slide, of the amounts awarded. In the year ahead, we are going to be working with Senator Byron Dorgan, Senator Kent Conrad, and Congressman Earl Pomeroy, Governor Hoeven, and other members of our congressional delegation, state officials, and partners at other universities throughout North Dakota in establishing a Red River Valley Research Corridor – a framework for partnering among UND, NDSU, other colleges and universities, plus private-sector entities.

Some of the greatest potential for our future sponsored research will come at the interface between units in a pattern that departs somewhat from the "silo" approach characteristic of this University and others historically. The Red River Valley Research Corridor speaks to the need for synergy between and among institutions. There is also a need for more synergistic interaction between and among units within the University. One key component of this will be the Human Nutrition Laboratory, now very ably led by Jerry Combs. Jerry moved here recently from Cornell, along with his wife Barbara, a faculty member in our Department of Teaching and Learning. Jerry is enthusiastically exploring potential research partnerships with the School of Medicine and the Energy and Environmental Research Center.

Does this campus look terrific this fall or what! I’d like Larry Zitzow and Paul Clark – and others who may be here today from Facilities – Bob Gallager – please stand and be recognized for your efforts in beautifying our campus.

Within the past two weeks, Bob Gallager, Larry Zitzow, Judy Sargent and I toured campus housing – now absolutely full – and I was blown away by the high quality there. Thank you all for your work in making the campus a beautiful, welcoming setting in which to learn, to work, and to visit.

We have a number of new facilities projects under way and others projected for the future. Mr. James Ray, one of our greatest benefactors, was a key player in bringing a Hilton Hotel to the western edge of our campus – a facility that will add much to our ability to host conferences here at UND. We will be expanding the Energy and Environmental Research Center and the Medical School’s capacity to engage in research, and we will also soon begin renovating the Memorial Union. Tony Trimarco is new to UND only in his role as director of the Memorial Union. Tony has been a part of our Workforce Development program. Before that, he was with the Grand Forks Chamber of Commerce. He is retired from the United States Air Force, and was stationed at the Grand Forks Air Force Base. Tony, we look forward to your leadership in featuring the "heart" of the UND campus.

Speaking of "heart," we should all be very proud of the wellness program taking shape so rapidly here on our campus. I would like to ask Laurie Betting, the new director of our Wellness Program to stand. Laurie, welcome! And I would also like to recognize Jane Croeker plus Jonathan Lovseth and Angie Anderson, our student leaders, for their outstanding efforts in developing this concept. Our vision is to build wellness into the educational experience of all our students and to provide wellness services to optimize the health and well-being of our faculty and staff.

As many of you may be aware, Governor Hoeven was here this summer to kick off a Healthy North Dakota program, which is a direct spinoff of the wellness effort here on UND’s campus. He and Mikey were here again last Saturday to mark the opening of our interim wellness facility in Hyslop. Earlier, in August, we sponsored with the Governor’s Office and the State Department of Health, a kickoff for the Healthy North Dakota program in which we defined the state of health and well-being of North Dakotans and initiated the development of a plan for a healthier citizenry. Part of this plan will be to model and help corporations create their own wellness programs.

Plan A for the development of a wellness facility continues to be the one represented in this figure. As we continue to seek full funding this plan, Laurie Betting made sure, along with student leadership, that we were able to show students an immediate result from our new wellness fee when they returned this fall. Outstanding facilities in Walsh Hall and the Hyslop Sports Center stand as tangible evidence of their ability to deliver. Thanks to all of you. I’m looking forward to seeing further development and movement in our wellness program in this coming year.

I’ve spoken often about the way in which our intercollegiate athletic program reflects a proper focus on academics. We’ve won dozens and dozens of awards and have been recognized nationally many times for our Academic All-Americans, team grade point averages, etc., etc. I was pleased to acknowledge at graduation recently that Scott Guldseth, the leading all-time scorer in men’s basketball here at UND, received a Ph.D. in clinical psychology. And while his accomplishment is noteworthy, it is typical of many, many of our athletes who are first and foremost students. Our intercollegiate athletic program is extraordinarily successful, and yet, it is accomplished by athletes who are students first. This fall, we will be inaugurating a new era in intercollegiate athletics at UND with a Division I women’s hockey program. The new coach is Shantel Gammie Rivard. I am pleased to note here once again that we won the National Championship in Division II football last year. I would like to ask Football Coach Dale Lennon, Athletic Director Roger Thomas, Scott Guldseth, and Shantel Rivard to please stand and be recognized.

I believe that our philosophy about intercollegiate sports at UND is rock-solid, and I will do my level best to ensure that it remains so.

Despite our many, many successes – and I’ve only touched on some of them here today – we still have much to do. For example, the tragic events of September 11 (2001) inhibited our efforts to ramp up international programming. We need to redouble our efforts to expand international programming as part of our overall campus diversity initiative. Diversity is an area in need of more work.

Essentially, we have only two factors that determine how far and how fast we go in moving the University of North Dakota to the top edge of the top tier of institutions in the decades ahead: the motivation of our people and funding. Our greatest potential will come from just how far the people here are willing to go, individually, in helping to achieve our goals. We put a lot of effort and our resources into increasing faculty and staff salaries. We will continue to do so. The extent of our ability to do that, however, depends on how much of a total effort we get from all of the people who work here. One dimension of this is fostering a culture of partnerships. I am pleased that key leaders like Gerry Groenewold, Dean David Wilson, Jerry Combs, and others see that synergistic interaction between and among units is the key – inside but outside the University as well. I would like to ask Wayne Bruce to stand and recognize his effort to increase enrollment through an extraordinary partnership with the Mayo Clinic.

North Dakota needs a real long-term financing plan for higher education, and it looks like increased
tuition will have to be a significant part of that plan. I read two articles recently – one by Kristin Conklin, having to do with the need for a new model for funding higher education nationally, and another one by Mark Yudof on "Higher Tuitions." These writers paint a very compelling picture about the need to change the way we model financing for public higher education in the United States. They suggest that we have been changing the model gradually and if we are to keep American Higher Education at the standard where it currently operates, we will have to move even more sharply toward a new model.

It is undeniable that public support for higher education has decreased steadily and profoundly over the last three decades. Yudof points out that state support as a function of personal income declined 30 percent from 1979 to 2000 nationwide. As this has happened, there have been tuition increases and much anguish about the extent to which tuition has gone up. Why has state support diminished and why must we expect these trends to continue? There may be a whole range of reasons why state support for public higher education has decreased, and perhaps all of them are at work.

First of all, there are many other demands on state revenue, all or most of which seem to be a bit more hardwired into state constitutions than higher education. Secondly, while states’ economies have lagged, in most states revenues have fallen even further because of the impact of internet sales and because of public demand for lower taxes and projected impacts of such things as the elimination of estate taxes, etc., etc., etc.

Another possible reason is that legislators and others see that the personal return on education has actually become greater and greater over the last 30 years. Recent census data project that college graduates will earn an average of $1 million more than high school graduates over their careers. Those who go on to graduate training and/or professional training earn $3-4 million more. This gap has been getting larger and thus is generally seen as a greater and greater personal return on the personal investment (tuition) that students and their families make. Thus the question seems to be shouldn’t they pay a bigger and bigger share of the cost.

To this list, Yudof adds the graying of America, suggesting that as the population has aged, there are more and more voters who have no kids to educate. Not surprisingly, things of interest to the senior population, such as health care and public safety, have moved higher in priority order for state legislators and other elected officials.

State governments may have also been relatively willing to cut higher education in times of fiscal stress because they perceive institutions of higher education, unlike other state agencies, as having other significant alternative sources of revenue – federal grants, housing fees, private giving, etc. – all in addition to tuition.

Another especially telling impact on research universities is the national pattern of spreading support for higher education over a lot more institutions. Yudof describes this as the regionalization of higher education or bringing access to higher education through small institutions, many without any sort of research mission, to every corner of every state.

As a result of all the above factors, public universities have suffered in terms of their ability to attract and keep top-notch faculty. Yudof points out that the gap in professors’ salaries from public to private has gone from about $1,400 a year in 1980 to $22,000 a year today.

Higher education’s response has gone beyond simply raising tuition to offset declining state support. Institutions have tried to become more efficient. However, higher education is unusually labor-intensive – high-priced, labor-intensive. And there are many other expensive elements, such as technology, to providing students with a good education.

I want to say a word about UND specifically. Compared to our set of nine benchmark institutions, we have roughly 60-65 percent of the funding per student, i.e., funding derived from tuition and state appropriation, combined. We are behind all nine. Tuition at UND is below all but two of the nine, and is 30 percent below the standard set by the top four. Yet, at UND, instructional expenditures, per student, places us third or fourth from the top in our benchmark set. This is a lean and mean, focused University.

I should note that there is considerable irony in the current model of funding higher education – which has institutions today suffering cuts in state appropriations of anywhere from a small percentage to as much as 15-20 percent – namely that demand for higher education and its services goes up when the economy is going down. People who can’t find jobs tend to go to college and need a high-quality education. Institutions of higher education are also asked to ratchet up their engagement in economic development activities such as research and the commercialization of discovery. The demand varies inversely with public support for higher education during these periods.

Another problem is that the model currently in effect doesn’t provide the universities with a sufficiently stable base from which to leverage other support. The support schools are able to attract from other sources often has to be used to offset declines in state funding – at inopportune times when that support is most critically needed for flexibility and new entrepreneurial approaches.

The bottom line is that the tacit deal between states and public higher education – that in exchange for dollars public universities would keep tuition low and yet provide broad access to get the total percentage of the population educated – is open to reconsideration.

Perhaps we do need a better model for the support of public higher education, one that continues to have some substantial public component. Aside from the increased personal income of graduates, states benefit greatly from having educated citizens. What is it, then, that needs to take the place of the old model with respect to this public component?

It can no longer be simply each institution lining up support from its local legislative delegation and charging them to go get what they can. We can’t allow state support to rise and fall with the economy in a way that destabilizes the foundation of public higher education, and we can’t simply spend our time wringing our hands about who happens to be in a legislative leadership position, who happens to be elected governor and what party. It has to be more fundamental than that. States must also come to see support for higher education as an investment rather than a cost.

If states are to turn universities loose to find other sources of support to allow them to sustain high quality, we have to find a way to stabilize public funding of higher education – through increased taxes, if necessary, or even by borrowing money in times of economic downturn. One way or another, support must be stabilized at a high enough level to give university leaders a base from which to get the job done, even through the use of a wide array of revenue streams. This means, of course, that states will have to devise financing plans and tie these to state objectives and a description – or at least an understanding – of how each public institution fits into achieving the state’s investment and economic development goals.

It appears that if we are to continue to serve students with quality, we must be allowed to increase tuition. In the absence of additional state support, this may mean increasing tuition dramatically over the next several years and dealing with the issue of access by providing direct subsidies to students through state scholarships, loan programs and other means. We certainly must ensure the broad access to higher education. Institutions must increasingly look to private sources to provide scholarship support.

States can no longer insist that tuition be held low even if state support is low and going lower. States must simply allow the inevitable increases in tuition to help cover the cost of high quality higher education. As public higher education becomes privatized, public institutions will, out of necessity, need to look even more like private institutions.

The fast-fading old financing model treated higher education as a general public good. It resulted in students being charged the same regardless of what programs they happen to study, even though the cost and the personal gain from particular programs varied dramatically. Some programs are up to four times more costly to deliver as other programs, and yet tuition is generally the same – disregarding program and course fees.

I acknowledge the obvious danger here, and that is that if diminishing state support is aligned with state objectives and if students and their parents pay more of the bill, emphasis on a broad, high-quality liberal arts education may diminish or be lost. It will be up to university leaders to ensure that we do not allow, as Yudof puts it, for the trivialization of education, converting it to "just-in-time training."

The fact is that students graduating today will probably have three different career placements in their lifetimes, and they will on the average have eight different jobs. Some of those careers haven’t even been invented yet. It is more important than ever that students be broadly and generally educated.

Over the last year or so, as a sequel to the Higher Education Roundtable Report, we have been developing what we call a long-term financing plan for higher education. This plan is really a long-term "needs" plan or a "what-it-will-take-to-cover-the-gap" plan. We now have to address where the money will come from. It is important that we provide for access. But a questions that looms large is "access to what?" Access to programs at what level of quality? Clearly, we need to do what we do and we need to do it as efficiently as we can. But we also need to do it well, and we need to do it at a very high level of quality in order to address the real need for public higher education in North Dakota.

The University of North Dakota, located in Grand Forks on the North Dakota-Minnesota border, is classified by the Carnegie Foundation as one of 64 public "doctoral intensive" institutions of higher education in the nation. It is characterized by a solid foundation in the liberal arts, a manageable size, high-quality students and faculty, a varied curriculum, nine colleges and schools, a widely recognized program of graduate education and research, rich cultural resources, and an outstanding record of alumni support.

Enrollment: 12,423

Academic divisions: John D. Odegard School of Aerospace Sciences, College of Arts and Sciences, College of Business and Public Administration, College of Education and Human Development, School of Engineering and Mines, Graduate School, School of Law, School of Medicine and Health Sciences, College of Nursing, Division of Continuing Education.

Programs of study: undergraduate, 158; master’s, 47; one specialist’s diploma; 21 doctoral programs; medicine (M.D.); law (J.D.).

Annual operating budget: $280.6 million