Foreword
 
Introduction
 
State Context
 
Higher Education in South Dakota
 
Two New Processes for Policy-Driven Change
 
Changes Initiated in Higher Education
 
Conclusions
 
Endnotes
 
About the Author
 
About the National Center

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South Dakota
Page 4 of 10

Higher Education in South Dakota

South Dakota has 24 postsecondary institutions, ten of which are private.6 These include four public technical institutions and six public four-year institutions. The state has four tribal postsecondary institutions, three of which are accredited as community colleges. The state enrolled approximately 34,000 students in postsecondary education in 1997.

The South Dakota University System Board of Regents governs the state's six public universities as a unified system of higher education and also has constitutional responsibility for the School for the Deaf and the School for the Visually Handicapped. The nine members of the board are appointed by the governor and confirmed by the Senate. Regents serve six-year terms, with the exception of a student regent who serves for two years. In addition to governance and systemwide planning responsibilities for public higher education institutions, state-level planning falls within the board's purview.7 Public tuition at South Dakota's universities also is set by the Board of Regents.

The board appoints an executive director to serve as its chief executive officer. In the 1990s, as part of a statewide effort to develop policy-driven change in higher education, the board adopted a governing approach that places greater emphasis on system leadership, largely through the position of the executive director. In 1994, the board wrote, "The Board regards its executive director as its chief executive officer with a significantly greater role in the governance of the system than the institutional executive officers."8

Policymakers and university administrators were very upbeat in discussing the current composition of the board, using words such as "synergistic and eclectic" to describe the members. According to one president, "Governor Janklow has done a good job making his appointments." When George Mickelson served as governor beginning in 1987, he built upon Janklow's strong appointments by providing funding to meet current and future higher education needs. Another president said that laying the foundation for the current board started in the late eighties, as "Janklow brought together a base for higher education and gave it stability. In the early 1990s Mickelson then started the public policy process of integrating the universities and making them complementary."

The other major branch of public postsecondary education in the state is the technical institutes. There are no community colleges in South Dakota, though one legislator cautioned, "It is best not to get stuck on what we call institutions but focus on what they do and how they can meet state needs." The State Board of Education governs the four technical institutions in the state, but their operations continue to be under the administrative control of the K-12 school district boards that first initiated them as area vocational schools in 1965.9 The state board is composed of citizens (appointed by the governor) and is staffed by the Department of Education and Cultural Affairs. One technical institute director described the state board's duties as "setting tuition rates, overseeing programs and the teacher credential process, and monitoring budgeting and the need for maintenance and repairs. The local board must approve any new or expanded programs and has the power to hire and fire its local institute director."

ENROLLMENT
The South Dakota University System (SDUS) is comprised of six public four-year institutions and two specialized schools (the South Dakota School for the Deaf and the South Dakota School for the Visually Handicapped). Three years of enrollment data -- including the peak year (1994) -- for the six universities are displayed in Table 4.

As shown in Table 4, one of public higher education's greatest challenges in the state is maintaining enrollment. The enrollment decline for the state's six public universities began in 1995. Enrollment levels have been influenced by a number of factors: demographics, changes in state enrollment funding, and policy changes regarding nonresident students.

In the 1990s, headcount enrollment peaked in 1994, with 1997 enrollments declining to 1990 levels. Enrollment of traditional college freshmen may be on the decline as well. The number of South Dakota high school graduates is projected to decline 3.3% over the next 15 years (1996 -- 97 through 2011 -- 12). In comparison, the total number of high school graduates nationwide is expected to increase by 16% in this same period.10 When asked about capacity, one president said several universities are at an all time low in enrollment and, "They are trying to recruit students from everywhere."

In South Dakota, there are indicators that traditional college freshmen are increasingly choosing private or out-of-state institutions rather than in-state public institutions. In 1996, almost 45% of high school graduates from South Dakota became full-time freshmen.11 During this same year, 67% of all South Dakota residents who were freshmen attended college in their home state, compared with the national average of 80%.12 During the public system's peak enrollment year (1994), the state still lost more students to other states than it gained. Yet 1994 is the year most respondents pointed to as the peak year in out-of-state resident attendance at South Dakota universities. A typical policymaker comment was: "We were increasing enrollments but with out-of-state students, so we were paying to educate nonresidents at a time when a property tax revolt was happening." After the enrollment peak, a number of policies and programs that encouraged nonresident attendance were eliminated.

According to several higher education respondents, the commencement of the enrollment decline also was linked to the waning commitment to fully fund the enrollment formula after 1993. Policymakers and higher education leaders' opinions differed as to whether the system should have been able to maintain or improve quality without decreases in enrollment or increases in funding. But the end result is clear. The tightening of admission standards, the lack of full funding for the enrollment formula, and the elimination of previous policies that encouraged nonresident enrollment -- all resulted in the enrollment slide that began in 1995.

Private two- and four-year institutions comprise a comparatively small portion of South Dakota's higher education industry, but here too, enrollment has been stagnant. Headcount enrollment decreased slightly from 1995 to 1996, and if one assumes that the broad trends of high school graduates and student migration rates previously discussed affect both private and public institutions, there is little reason to believe that enrollment will increase in either sector.

By contrast, overall enrollment in the technical institutes has risen over the last several years. South Dakota's Workforce and Career Office calculates that fall headcount enrollment grew 11% from 1997 to 1998.13 Southeast Vocational Technical Institute, the state's largest technical institute, experienced a 22.5% increase in annual enrollment from 1997 to 1998.14 The institute's director added, "There is no reason to believe that we won't maintain double-digit growth in the coming years." Another director's speculations were similar. The directors attribute their enrollment growth to their effectiveness at meeting industry needs and strong program offerings. One director concluded that another appeal of the technical institutes is that they "offer South Dakotans a chance to stay in the state if they so choose, whereas there may not be as much opportunity in the state for university graduates." Headcount enrollment data for selected years for private institutions and the four technical institutions are listed in Table 5.

Despite enrollment growth in the technical institutions, South Dakota continues to have low participation rates in postsecondary education relative to surrounding states.15 Low participation rates in South Dakota, particularly when compared to states with high participation rates (e.g., California and Arizona), may reflect the lack of a well developed two-year college sector.

TUITION AND STUDENT AID
Indicators of higher education affordability in South Dakota are mixed. There are no public community colleges in South Dakota, so the option of a public two-year postsecondary education rests primarily with the vocational institutions. Estimated costs of a 32-hour course load per academic year at a vocational institute are higher than the national average cost of attending a two-year community college. Public and private tuition at four-year institutions in the state is lower than the national average, however. The first three indicators in Table 6 compare tuition of the various higher education sectors in South Dakota to national averages; the last three measures are indicators of state versus student contribution to pay for higher education.

In comparison to the first three measures in Table 6 showing tuition and fee rates, the last three measures indicate that higher education in South Dakota is "less affordable" than the national average. These three measures involve not only tuition but also factors such as state appropriations and the number of full-time equivalent (FTE) students. Tuition as a percent of total revenues (defined as tuition plus state appropriations) was 42.1% in 1996 -- 97 for South Dakota, while the national average was 31.4%. This means that students are paying a larger percentage of their educational costs than the national average, not that actual tuition is higher.

South Dakota's tuition per full-time student is above the national average in part because student enrollment in the public universities has been flat or declining since 1995. In addition, a measure of family payment effort shows that tuition is taking up a larger percentage of family income in South Dakota than it did in the past.16 The family payment effort in South Dakota has risen from 8.5% in 1991 -- 92 to 10.1% in 1996 -- 97, compared to the national average of 5.7% and 6.8% respectively.

The general consensus by those interviewed was that tuition will continue to rise. Most legislators accurately commented that students pick up about 42% of their higher education bill, with one state senator offering, "I think it can incrementally increase and I don't think it would be a big concern." The senator continued, "I don't see anything wrong with students paying a little bit more." A state house representative said, "One thing about tuition, we have not heard complaints from students; there may be an acceptance that borrowing is part of the business of getting a college education." Another representative said, "There is a mentality in the state that it is okay to go into debt when you have a potential income increase as a result of your education."

The data on student financial aid certainly reflect the perspective that borrowing is a normal part of receiving a higher education in South Dakota. Figure 3 compares South Dakota's University System (SDUS) to national averages across the various types of student aid. This graph is striking in showing that 70% of SDUS student aid is in the form of loans, compared with a 48% figure nationally. The "Other" category includes work-study, merit aid, employment other than work-study, etc.

South Dakota devotes few resources to state need-based aid, and, in fact, currently provides more merit scholarships to its students. State grant programs account for 1% of total student aid in the state, of which 21% ($179,921) is based on need and 79% on the merit-based Mickelson scholarship. These scholarships, established by Governor Mickelson, pay full tuition at public universities for the top one percent of the state's high school graduates. When Governor Janklow was reelected in 1994, he called for the elimination of these scholarships. With the Mickelson program scheduled to phase out by 1999, total state-based student aid will decrease even further. One regent said, "We haven't dealt with the issue of higher tuition revenues and that should lead to more aid."

In Figure 3, institutional aid is included in the "grants" category for the South Dakota University System in order to remain consistent with the national data. According to one president, "The universities in South Dakota are not allowed to use tuition dollars as institutional aid," or, put another way, the recycling of tuition dollars is not allowed. Institutional aid comprises 4% of the total grants category in Figure 3 but is separated from federal and state grants in Table 7.

Table 7 breaks down the sources of grant aid to students in 1996 -- 97, nationally and for SDUS. The table emphasizes that South Dakota does relatively little in terms of providing aid to its higher education students. The low percentage of state-provided aid, when compared to the national average, appears to create a disproportionate dependence on federal grants, as institutional aid and other forms of aid that do not have to be paid back (referred to as non-obligation aid in Table 7) also lag behind the national average.

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