[Post date: Fall 2021]
Rising Wealth, Declining Academic Investment
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Last fall, we reported that OSU was not in financial crisis despite the challenges of the pandemic. Here is an update on how the university fared during last academic year, 2020-2021. We also reflect on how the university’s finances have affected its academic mission in the past several years.
Summary OSU projects an incredibly strong financial performance for the academic year 2020-2021—in fact, its strongest ever. OSU is wealthy and growing wealthier. Even so, it has for years made cuts to its tenure-track faculty and limited compensation to faculty, staff, and graduate students. As a result, it has compromised the quality of its research and educational missions. There is a fundamental disconnect between OSU’s financial health and its academic performance and standing. Breakdown 1. During the 2020-2021 academic year (FY21), and despite repeated claims of financial distress, OSU had an exceptionally strong financial year, with an increase in its position of $2.961 billion. Small losses due to the pandemic were offset by small cost savings in some areas, but the university saw remarkably strong returns in its investment income and significant decreases in its net pension and OPEB ("other post-employment benefits") liabilities. As the university's financial officers conclude, the university's liquidity "remained robust throughout the pandemic and continues to exceed policy benchmarks." See the August 19, 2021, report to The Ohio State University Board of Trustees (the change in net position can be found on p. 7). 2. Nonetheless, OSU significantly held back compensation to faculty, staff, and graduate students during 2020-2021. The university eliminated all raises for faculty, staff, and students. By contrast, as reported in The Chronicle of Higher Education, in the same period at other public institutions nationally, faculty on average received raises of 1.4% (breakdown here). 3. The university’s only aid to graduate students experiencing major disruptions to their studies in 2020-2021 was limited in scope and will be discontinued after December 2021. The Matching Tuition and Fee Authorization program covered tuition for one semester per student, without stipend or benefit adjustment. Only late-program graduate students were eligible. As of August 2021, only 34 graduate students (out of a total of over 12,000 at OSU) received one of these awards. 4. OSU lags behind other Big Ten institutions in its rate of investment in academic (non-medical center) faculty. According to the OSU Senate Faculty Compensation and Benefits Committee Annual Report for 2018-2019 and Spring 2020 Update, over the seven-year period ending in 2019, OSU decreased its spending on salaries for tenure-track faculty by 5%; at other Big Ten universities, spending on salaries decreased by only 3%. In addition, this decline in spending on tenure-track salaries at OSU has been continuous and steady, while at other Big Ten universities it has not. The average base pay for OSU’s academic faculty is 6% less than the Big Ten average, which puts OSU in ninth place. (See the Senate reports for data on #5 and #6 below as well.) 5. Compared to its peers in the Big Ten, OSU ranks nearly last in faculty-student ratio. The ratio of students to tenure-track faculty is one of the standard measures of an institution’s instructional health. Since 2012, the ratio at OSU has been at least 10% higher than the average in the Big Ten—and in recent years closer to 15% higher. This consistently puts OSU low in the Big Ten in this key index of academic value. 6. OSU has fallen precipitously in world rankings of academic quality. It sits near the bottom of the Big Ten in this measure as well. The Academic Ranking of World Universities (AWRU, or the Shanghai Ranking), an internationally respected measure of academic quality in the sciences and social sciences, reflects a significant erosion of OSU’s standing. Over a six-year period, from 2014 to 2020, OSU’s ranking plummeted more than 40 places, from 64th to well past 100th. (AWRU rankings below 100 are amassed; OSU now resides in the 100th-150st bucket). In the Big Ten, only Rutgers and Penn State experienced bigger drops. OSU now ranks between eighth and twelfth among Big Ten universities. Sources: Committee reports of the OSU Senate Faculty Council Fiscal reports in OSU’s Office of Business and Finance Messages and updates from OSU’s Graduate School Mandatory federal reporting to the Integrated Postsecondary Education Data System Academic Ranking of World Universities |
