Chancellor Blank remarks to the UW System Board of Regents

As prepared for delivery, Feb. 8. (See Chancellor Blank slides.)

There are a lot of good things happening at UW-Madison.

We’ve been focused on expanding revenues through entrepreneurial efforts of our own, and we have new revenues that we are using to make a few long-overdue investments, as I’ll talk about in a minute. This is the first year since I’ve arrived that we haven’t been dealing with budget cuts.

It’s also a year when demand for what we do at UW-Madison is higher than it’s ever been. Our preliminary numbers indicate that undergraduate applications have increased by more than 20% this year, with increases in applications from Wisconsin (+6%), Minnesota (+17%), as well as non-residents (approximately 30%).

And it’s a year when the number of outside offers to our faculty appears finally to be back to normal after several years of extensive efforts by other universities to raid our best faculty. It’s a year when it feels like we’re moving forward.

And, as usual, it’s a year when our students, staff, and faculty have achieved some pretty amazing things; including, I might note, a great Badger football season.

I’ve often opened this talk by telling you about the many good things happening around campus but because my time is short, I’m not going to do that today. We’ve provided you with handouts showcasing some of our outstanding recent accomplishments and I hope you’ll look at those.

I want to use the next 30 minutes in a different way.

We are at a moment where there is a debate about the role of universities in our society. A recent survey found a substantial number of people who said that colleges and universities have a negative effect on the country. This despite the fact that all the economic data suggests that those with a two year or four year college degree will have the best chance of finding jobs with decent wages and a low chance of unemployment.

But I don’t want to talk about higher education in general, I want to talk about UW-Madison, the flagship university of this state. UW-Madison has come in for its share of criticism over the years, some of it well-justified. But we attract higher quality students than any other school in Wisconsin, public or private.  We are among the best research institutions in the country. And we are regularly ranked among the top public universities in the U.S.

The primary question I want to address: Why does it matter that Wisconsin is home to one of the nation’s top-ranked research and educational institutions?  There are a lot of other good schools in the state, so why does it matter to the state and its citizens that the flagship university is among the best in the country?

Let me suggest five answers to that question.

• UW-Madison provides access to a world-class education for Wisconsin students.
• Students can earn a degree from one of the top-ranked public universities in the nation for $10,533 in tuition/fees per year.
• The only higher-ranked public in the Big Ten is the University of Michigan. But if you’re a Wisconsin resident and want to attend Michigan, it will cost you more than $47,000 a year in tuition/fees.
• Of course, you could go to the University of Minnesota, given our reciprocity agreement. But that will cost you $4,000 more in annual tuition…$16,000 more for a 4-year degree… and they’re ranked number 25, well below us.
• This access to excellence is important to keep our best students in this state. We are committed to making it possible for every qualified Wisconsin applicant to attend.
• As the Regents know, we guarantee a minimum of 3,600 Wisconsin students in every freshman class
  • This year we have more than 3,700
• Our admit rate among in-state applicants is typically about 2/3
• Less than half of out-of-state students are admitted
• It’s particularly important that we keep the best students from Wisconsin here at UW-Madison. Especially in higher-income families, students now do a national search for colleges. Fifty years ago, we could expect that most of the best students in the state would come to UW-Madison; now they look at public and private colleges across the nation.
• And once they leave the state for college, they are much more likely to take first jobs and establish careers elsewhere.
• We’ve started Wisconsin PRIME to keep the state’s best students in Wisconsin.
• PRIME targets Wisconsin high school students with top grades and an ACT score of 30 or higher; our goal is to reach 800 students with high-touch recruiting to communicate why a top student would want to attend Madison. I had lunch with some of this year’s PRIME candidates last week.
• We’ve just started this program, but think we’re on the right track. Our share of Wisconsin applicants with an ACT score of 30 and above rose by 7% last year, our first year of PRIME.
• The more of these excellent students we attract to UW-Madison and keep in Wisconsin for college, the easier it will be for Wisconsin’s businesses to recruit them into jobs.
• We bring more highly skilled young adults into WI from outside the state than any other institution.
• We have almost 20,000 graduate & undergrad students on this campus (19,796) who come from outside of Wisconsin. No other institution in the state attracts highly talented individuals to Wisconsin in such large numbers.
• We are choosing these students from a growing pool of out-of-state applicants.
• Good marketing and great reputation have driven out-of-state applications up more than 70% in the past decade. Our preliminary numbers show they’re up nearly 30% this year alone.
• We are extremely selective in our out-of-state admissions … last year we admitted less than half of our non-resident applicants – far below the admission rate for our Wisconsin applicants.
• Over the next five years, we are looking at expanding our freshman class a little by tapping into this deep pool of talent. This in no way lessens our commitment to Wisconsin freshmen. But at a time when the number of Wisconsin high school students is stagnant or declining, growth is going to have to come from out-of-state.
• Expanding non-resident enrollment is both smart for the university and good for the state. Our out-of-state students, including our international students, bring more diversity to our student body and that improves the educational experience for Wisconsin students. It prepares them better to compete for top jobs in global companies, where the ability to work with diverse colleagues is highly valued.
• Furthermore, the deep pool of students from elsewhere that we bring to Wisconsin is a recruitment opportunity for state businesses and an opportunity to keep at least some of this talent in the state after they graduate. A Wisconsin business that wants to recruit a top engineer or an excellent writer is much more likely to land them if they’ve spent the last four years here than if they’ve never come to Wisconsin before their job interview.
• One year after graduation, about 22% of our non-resident students have a job here in Wisconsin. This is a number that represents thousands of high-skilled workers, most of whom would not be here if they hadn’t come to UW-Madison. It’s also a number that’s been growing.
• We at UW-Madison can’t force people to stay in the state after they graduate. But we deliver a deep pool of talented prospects to state businesses. And we will continue to partner with Wisconsin recruiters to showcase all the reasons to stay and work in this state.
• For instance, Dean Karl Scholz earlier today in the REDI committee described his extensive new efforts to increase career counseling and industry partnerships with the College of Letters and Science, which serves the majority of our undergraduates.
• UW-Madison is not just the biggest research entity in the state … it’s the sixth biggest research entity in the country. Why is this good for the state? Three reasons:
• First, Wisconsin residents benefit directly from much of this work, whether it involves modern dairy herd management or more effective cancer treatments. Because this innovation occurs in the state, much of the early knowledge from this research benefits state residents and businesses first. This aspect of UW-Madison is an important attraction for FoxConn, for example.
• We’re in a number of conversations with FoxConn about potential research partnerships. They are particularly interested in our outstanding work on artificial intelligence (our AI program is ranked in the top 20 nationally) … our research and development of automated vehicles (we’re one of just 10 programs in the nation) … and our world-class cancer research.
• They have a good sense of the extraordinary talent on this campus – in part because their Director of US Strategic Initiatives, Alan Yeung, is a UW-Madison graduate.
• Second, this research provides partnerships with industry that helps them stay on the cutting edge of technologies in their field. Companies want to be located near research universities.
• Third, this research spurs start-ups.
• We’ve identified 362 Wisconsin start-up companies based on UW-Madison discoveries and innovations and that number grows each year.
• Beyond the innovation benefits of a research university, there are major economic benefits as well.
• We bring more than $1 billion into Wisconsin in federal and private research funding. This is money that is largely spent here, primarily to create jobs and buy materials. Based on our research enterprise alone, we are one of Wisconsin’s largest employers and a major source of jobs and spending in the state, largely funded by outside revenues.
• We also bring more than $300 million into Wisconsin from out-of-state tuition revenues every year, which is spent on jobs and services here.
• This is particularly striking because people often think of us as a public entity. But only 15% of our revenue comes from the state. We are much more like a private company – except very few other companies bring $1.4 billion into the state every year.
• That money creates significant economic activity, jobs and tax revenues.
• For every $1 of state investment, the university generates $24 in economic activity.
• I want to be clear that the economic benefits of the research dollars we bring into the state benefit communities across the state. It’s not just Madison that gets these dollars … they’re used to buy goods and services statewide.
• The map shows UW-Madison research expenditures across WI counties over 3 years (2013-2016). We buy equipment, supplies and technology from across the state and out-source work to local businesses.
• It isn’t by chance that the concept of state outreach from the public university to the state emerged more strongly at UW-Madison than anywhere else in the country.
• We coined the phrase the Wisconsin Idea to embody that commitment…that the university’s boundaries are not the campus, but the state.
• We started extension programs before the Federal government created the Coop Extension Service.
• We started the first public radio station in the country – 100 years ago.
• We initiated some of the earliest public weather forecasting for farmers … and became the birthplace of weather satellite technology.
• A few examples of what we do today:
• Our College of Agricultural and Life Sciences is deeply involved with almost every agricultural group in the state;
• The School of Medicine and Public Health places medical students in rural Wisconsin communities every year to help address the physician shortage;
• The School of Veterinary Medicine provides guidance to veterinarians, farmers, and pet owners across Wisconsin, and also cares for police dogs throughout the state.
• Our Wisconsin Center for Film and Theater Research created the Northwoods Tour that took them across the state to share technology and expertise with local historians and families wanting to digitize their precious artifacts – from historic posters to home movies.
• Our re-integration with Cooperative Extension will only strengthen/expand these efforts.
• We look forward to welcoming Coop Extension back to UW-Madison, and finding ways to strengthen both their outreach mission and our own by working together.

***********

In talking about all that UW-Madison does in this state, I’m not disrepecting any of the other excellent institutions of higher education, in the System or elsewhere in the state. This isn’t meant to take anything away from the ways in which they serve their students and the state. We are all partners in one of the best public higher education systems in the country. But UW-Madison has some unique features that matter to this state, that have been important to its past economic and civic success, and that need to be valued.

There is no economically successful area of the country that does not have a major research and educational institution in its midst. For UW-Madison to continue to provide value to the state, it needs to retain its reputation and its quality. Making sure that happens is my highest priority as chancellor.

• So let me segue into a discussion about what we’re doing on campus to make sure we remain one of the top public research universities.
• Our biggest problem over the past decade has been a lack of investment dollars. Revenues among our peer public schools grew almost twice as fast as they did at UW-Madison – I’m not just talking about state dollars, but all types of revenue. As a result, we lost ground because others were investing more in their future.
• Since arriving here, I’ve been working aggressively to expand revenues, promoting the message that we need to be entrepreneurial to generate the investment income that we need. But … parenthetically … We continue to need to be a partner with the state in funding, particularly for capital projects.
• As I’ve told many of you more than once, we’ve developed a 6-point strategy to bring in new dollars for investment:

1. Expand summer semester
   • Rolled out in 2016. In summer 2018 there will be 192 new courses not offered in summer 2017.

• Brings in revenue while expanding opportunities for students
  • Finish degrees faster
  • Flexibility to take internships during semester

2. Grow programs for professionals

• Designed in collaboration with employers
• In last 5 years, 40 new professional masters & capstone programs – and launching 9 new ones over the next year.

3. Set market-based tuition

• Reaching market levels for non-resident and professional-school tuition
• The Regents have been a partner in making sure we can charge tuition equivalent to peers for professional schools and out-of-state students. Helps us provide the same quality of educational experience at UW that other schools provide.

4. Grow alumni support

• Currently in a $3.2 billion campaign, All Ways Forward
• Nearly 3/4 of the way to goal, thanks to record participation by more than 170,000 friends/alums.
• Not spendable income

5. Explore student mix & numbers

• Just talked about this – expanding non-resident undergraduate enrollment while maintaining our strong commitment to WI students is one piece.
• We are also growing our professional schools where that makes sense.

6. Grow research funds

• I’ve talked about how important our research enterprise is. When I arrived our research dollars were declining, leading to a drop in our relative rankings. I’m pleased to let you know that after 3 years of declines, we’ve had two years of significant increases in research funding because of the efforts we’ve made in this area.
• As a result, we have invested in several important new initiatives. Let me tell you about the five most important.
• First, we announced a plan for cluster hires this fall which has generated enormous excitement across campus.
• A cluster is a joint hire of three faculty who work on similar scientific issues but from different disciplinary perspectives. This allows us to build strength in key research areas and to hire top people by demonstrating our commitment to this field.
• For example, one cluster created 15 years ago (the last time we ran a cluster hiring program) has advanced our neuroscience research, moving us closer to better treatments for neurological problems caused by Parkinson’s disease and spinal cord injuries. That cluster has produced 17 new patents, a start-up company dedicated to translating the research into the marketplace, and $33M in grants and donor gifts.
• We solicited proposals for cluster hires from our faculty and research centers, receiving 48 proposals involving 150 faculty from every academic school/college.
• We’ll be funding six of these in this first round.
• This is a partnership with WARF that provides seed funding to promising new research projects by our faculty.
• 49 new projects funded in first two years. Examples:
• A virtual dairy farm that gives farmers a low-cost way to try out new management techniques
• Research on a new therapy for Alzheimer’s disease that involves editing the patient’s DNA.
• As this research matures, the projects we’ve helped initiate through UW2020 have already attracted far more in outside research dollars than we provided as seed dollars. You can see UW2020 expanding our research portfolio.
• Our full professors make 12.7% less than professors at our peer institutions. That’s not something to be proud of. You can’t run a great university and underpay your best people.
• We have been able to increase the funding we provide for merit and equity increases in this past year.
• The 4% raise approved by the state for next year will also help.
• But we won’t get out of this problem with one or two years of investments. It will take a while to catch up. Investing in market-based compensation is a lot less expensive than replacing faculty.
• We are also 8.5% below the peer median in our graduate student stipends. Graduate student applicants weigh a number of factors, including stipend rates, when deciding which school to attend, and lower rates put us at risk of not being competitive with other universities. Attracting strong graduate students is closely tied to attracting strong faculty. Faculty want to come to places with top students.
• We are substantially raising our stipends this year for teaching assistants ….that will bring our stipends to around the median of our peer schools, but those schools will give raises, too, so again, solving this problem requires annual investment.
• We have also worked to increase fellowship dollars through gifts and we’ve increased our support for graduate students from WARF dollars as well.
• I unveiled the Badger Promise here one year ago … today, we have 139 BP students on campus. Reminder: This is a guarantee of free tuition for first-generation students who transfer to UW-Madison upon completing a degree at one of the two-year Wisconsin public schools.
• About one-quarter are from rural Wisconsin high schools
• More than half are underrepresented students of color
• About a third are Pell-eligible, which means they qualify for two full years of free tuition
• There’s one new major investment we want to announce today
• We want to make sure that all students from Wisconsin who are admitted to UW-Madison can afford to come.
• Over last four years, raised money to fund 1,000 new scholarships for undergrad and graduate students.
• Directing more institutional dollars into need-based scholarships
• We have almost tripled the dollars available for need-based scholarships over the past 10 years
• Last year 14% of undergraduates attended UW-Madison tuition-free
• Badger Promise helps affordability for first-generation students as well – but this isn’t enough. Many low and middle-income families in Wisconsin are simply uncertain whether they can afford tuition at UW-Madison. Complex financial aid forms make it hard for families to figure out what financial assistance they might expect. We want to simplify our message, so we’re announcing a program similar to what many of our peer schools are doing.
• New program expands our commitment to affordability for Wisconsin families by pledging to cover four years of tuition and segregated fees for any incoming freshman from Wisconsin whose family’s annual adjusted gross income is $56K or less – roughly the median family income in Wisconsin.
• This program will begin next fall. This are need-based grants, not loans.
• For freshmen – 8 consecutive semesters (4 years)
• For transfers – 4 semesters (2 years)
• Let me be clear…students from low-income families may get more aid than this, to help cover living expenses as well as tuition. But we want an easily understandable message about the minimal level of financial aid that can be expected by low & moderate income Wisconsin families.
• I want to note that we continue to work on expanding merit aid as well as need-based aid. Many of our peers lure top students away by offering such aid, even in the absence of need. But making sure that low and moderate-income families in Wisconsin receive aid is our first priority.
• I know I’ll be asked how we are affording Bucky’s Tuition Promise. First, we already cover many of these expenses for many families. To expand this commitment to all eligible families, we are are redirecting some aid dollars that were used elsewhere and raising money from our alumni to cover additional costs.
• For instance, we just announced in December that we have $10 million in matching money for need-based scholarships from John and Tashia Morgridge. When this match is completed, it will generate a $20 million endowment for need-based scholarships. The payout from this endowment will provide a substantial part of the new funding we need for this program.
• Bucky’s Tuition Promise is just one of the ways in which we are investing in our students and in our university. A great university will not stay that way very long if we aren’t constantly investing in new ways to attract great students, to provide them with an excellent education, and to attract and retain the faculty who teach our students and who also conduct world-class research.
• UW-Madison has been part of this state for 170 years. Our partnership with the state is central to who we are as a public university and the state’s partnership with us is central to its economic future. It’s exciting to think about all the things we can do together in the decades ahead.
• Thank you – will take questions.