Remarks of Welcome/State of the University
Opening Convocation—August 25, 2005
Daniel F. Sullivan, President

Welcome back to continuing faculty and staff, and a warm and heartfelt welcome to our new faculty and staff, who will be introduced to us all in a moment. This is an exhilarating, exciting time of the year for me and, I hope, you as well. No matter what happened last year—good and bad—we get a fresh start. The glass is nearly full. How great is that!

This is also our sesquicentennial year. Our celebration of it, of which you will hear a great deal in the coming weeks and months, looks backward only to the extent that doing so might help us look forward. You’ll get an inkling of that a bit later in the program as we view a most interesting sesquicentennial slide show put together by Lisa Cania and a number of other members of the staff. I greatly hope you enjoy it.

You know from Matriculation at least one of the books I read over the summer—Friedman’s The World is Flat. I also did some writing, and with two colleagues—Bob Bottoms, President of DePauw, and David Warren, President of the National Association of Independent Colleges and Universities and former president of Ohio Wesleyan—presented a session at Chautauqua on diversity in higher education. My remarks, on the educational impacts of diversity, as summarized in the briefs that were part of the Gratz and Grutter vs. Bollinger and the University of Michigan affirmative action cases, will be in the next issue of the St. Lawrence Magazine. As you know from Terry Cowdrey’s remarks on Monday, our new first-year class has the highest percentage of U.S. students of color and international students combined of any class in the University’s history, and the second highest percentage of U. S. students of color—11%, compared to 11.6% two years ago. We all understand and support the social justice reasons for increased U. S. diversity. What a win-win situation it is when one fully understands the educational impacts as well, and what a job Terry and her staff, and all others who have worked on this issue, have done!

There has also, in the last several years, been a dramatic increase in faculty diversity. In the last three years, roughly 40% of new tenure-track hires have brought additional diversity to the faculty, and this too is critical to achieving our mission. Many people argued for years that St. Lawrence, given its rural North Country location, could never achieve greater diversity, a myth belied by the existence of a number of other national liberal arts colleges with equally challenging locations and much more diversity. I’m so glad we have kept at it. At the same time, we need to remember that as we become a more diverse community, we take on the challenging work of all diverse communities. We are more complex, and thus our social negotiations are more complex. It is important to acknowledge that students, faculty and staff of color still experience St. Lawrence as a very white place and that we all have work to do with this.

There is, of course, news of the University to share from over the summer as well, and so let me get to some of that:

• The Rankings Again: U. S. News and World Report each year times release of its best colleges issue for the start of the fall semester. We moved up one place in the national liberal arts college category to 61, a very frustrating place for us to be given some of the individual factors that were weighted to produce the final result. One of the biggest determiners of final ranking is “peer assessment score,” which is a ranking based on the opinions of college presidents, academic deans and admissions directors. Our colleagues nationally gave St. Lawrence a score of 3.3 (out of a possible 5), the same score as 10 other liberal arts colleges, seven of which are ranked higher than St. Lawrence’s rank of 61, including Union, ranked at #36.

We and everyone else know that small classes are good for students because they are likely to get more individual attention from faculty members, who are able to hold them to higher expectations—the more faculty expect the more they get. At St. Lawrence, 65% of the classes enroll fewer than 20 students. That is equal to #4 Wellesley and #25 Trinity, and better than 14 other schools ranked from #6 (Bowdoin) to #41 (Centre, Furman and Occidental). Only 1% of St. Lawrence’s classes have 50 or more students; the top two colleges, Williams and Amherst, each have 4% of their classes with 50 or more students.

The magazine also looks at what percentage of the faculty are full-time, and thereby better able to devote attention to students. The percentage of faculty at St. Lawrence who are full-time is 92%, significantly higher than #4 Wellesley (86%). It’s higher also than 14 colleges that are in the top 50.

Our problem, though we are getting better and better, continues to be that we lag behind those institutions above us in incoming student quality indicators and institutional selectivity. An indication of the transforming character of St. Lawrence, which is what it is all about in my view, is that our actual graduation rate is a full 10 percentage points higher than our
U. S. News-predicted graduation rate, which is based on the qualities of our incoming students. St. Lawrence changes students in positive ways much more than many competitor institutions change their students. Wherever we ultimately get in the rankings game, you have my undying gratitude for the work that you do with our students. Conversations with our alumni indicate that you have their deep gratitude as well. Thank you, for all that you do.

• Admissions and Retention: That brings me naturally to the issue of admissions and retention. First of all, I’d like to say publicly that this fall’s opening first-year student number of 540 (we had two no-shows from the 542 number Terry reported Monday), against our target of 550-580, with the strong class quality and absolutely outstanding U. S. and international student diversity we have, is a terrific achievement given where we were with spring yield in early May. We have been looking to slowly ratchet up what it takes to be awarded a merit scholarship at St. Lawrence as part of our effort to allocate more of our financial aid in a need-based way, keep the economic diversity of the student body that we have, while at the same time reducing what we call our “comprehensive fee discount”—that is, the percentage of the comprehensive fee that we turn around and give back to students in the form of financial aid. That is no simple optimization problem. The applicant pool for this year’s class was strong, and early decision applicants, over 90% of whom enroll if accepted, were up 27%, so we took the plunge, increasing our merit scholarship standards significantly.

In retrospect (there is no way to calibrate this exactly in advance) we went too far too fast. Admitted students who last year would have received merit aid did not and went elsewhere; other admitted students who last year would have received more merit aid received less and went elsewhere; and some institutions increased the size of their merit scholarships and we did not. In addition, this year institutions higher in the national pecking order admitted students who we admitted that they did not admit last year, going significantly “out of profile” for students without financial need. Overall, as a result of these things we experienced reduced yield from offers of admission in the spring pool. When combined with the larger early decision group, overall yield declined only slightly, but the decrease in the spring pool yield did indeed affect the size of the first-year class.

I say “we” here because these are not decisions Terry and her staff make alone. In the end, estimating “yield” and net first-year student revenue is a judgment call, and so there is extensive consultation about what the judgment should be. One can do the regression analysis only in retrospect. You do have the right to expect reasonably good judgments from us over time, but we will inevitably be high some years and low in others. The result was the possibility of a first-year class size that might have gotten as low as 510-520 depending on summer melt. Terry and her staff, and our FYP staff, worked hard over the summer to keep the deposits that we had, and the 540 number that arrived yesterday was the very positive result.

Still, the students who enrolled have more financial need, and hence have required a higher total financial aid budget, than we had planned. So there is a negative impact on the budget which we are hoping to overcome in other ways. Not a disaster, by any means, but worrisome. We were reminded anew of how dynamic and complicated today’s admissions environment is. Navigating it successfully only gets more difficult with time.

As a result, at my request, the trustees at our Canaras retreat in late June approved a supplemental budget for admissions that adds back a staff member cut as part of our staff reduction program, supports a much-faster improvement of our website for admissions, and supports much more aggressive activities meant to increase inquiries and, ultimately, applications. Having reached the 3,000 application number three years ago, we have stayed there. Application numbers have to grow for us to meet all of our admissions recruitment, retention, and net student revenue goals simultaneously. Our top admissions competitors have application totals in the 4,000-5,000 range. This supplemental budget is intended to ensure that our application numbers begin to grow again.

You will hear more about our plans in this area as the year moves ahead. Again, I have to say how lucky we are to have the kind of admissions and financial aid staff we do.

We continue, in another very positive development, to experience increasing student retention. In my view, if we could pick only one indicator of our overall success with students, it would be retention. Strong retention indicates several things simultaneously: that an institution is recruiting and enrolling students that are well-prepared academically and are otherwise good fits; that an institution meets to a high degree the reasonable expectations students and parents have; and that an institution has effective programs to “catch” students who may be drifting and help them back on track. We have improved in all of these ways during the last half-dozen years.

In the mid-1970’s through the mid-1990’s St. Lawrence had a six-year graduation rate of over 80%, and a four-year graduation rate averaging around 77%, competitive with the best liberal arts colleges. The six-year rate dropped to 71% early in my presidency, reflecting classes admitted in the early 1990’s, and the four-year graduation rate reached a low of 65% in 2000. These are not the graduation rates appropriate for a top national liberal arts college. Through the hard work of hundreds of faculty and staff, our latest six-year graduation rate was 75% and four-year graduation rate was 73%. Most importantly, first-year to sophomore retention rates have improved dramatically to over 90% for last year’s and this year’s sophomores, portending even higher graduation rates going forward. You can’t retain students you have already lost at the end of their first year. This is a very positive trend that I hope and believe will continue.

I believe the trend will continue because our graduating seniors are reporting increased satisfaction with St. Lawrence in general, and with the education you provide for them in particular. At least from our students’ point of view, we are getting better and better where it counts, and in many important ways are also getting better faster than the competition, represented by the 25 liberal arts colleges in our so-called “new comparison group,” or NCG.

The latest data we have are from the Class of 2004 (Class of 2005 data will arrive in a few weeks). Here are just a few notable plusses:

1. Seniors report increases compared to prior years in the in-depth knowledge they have gained of a subject area, their ability to write effectively, their ability to relate well to people of different races and nations, and their ability to place current problems in historical, cultural, and philosophical perspective.
2. They report having spent more time studying and preparing for class, and here they are ahead of seniors at the NCG colleges.
3. The percentage reporting that the campus environment is “hard working” has increased by 20 percentage points in four years, and the percentage of graduating seniors who say St. Lawrence is “academically rigorous” has doubled in that same time span.
4. On the whole, satisfaction with a whole series of academic and student services has increased measurably: library services, facilities and resources; independent study and research opportunities; advising in the major; classroom and lab facilities; tutorial help or other academic assistance; computer services, support, facilities and resources; first-year advising; the registrar’s office; recreation and athletic programs and facilities; career services; food services; student housing; student health services; and ethnic and racial diversity. With very few exceptions, all other services at least held their own compared to earlier St. Lawrence classes or the NCG.

We are a stronger and more effective university, and you are responsible. Thank you! At the same time, we need more of your help—especially from the faculty—selling this strong message of our effectiveness to prospective students and their families. I know that Grant and Terry are working on this. I do just want to stress strongly its importance.

• Budget: Our audited financial statement for fiscal 2005 shows that we continue to make progress in bringing our operating budget back into full balance. Those of you who have been here through the recent recession to the present know that we have been meeting all of our financial goals with one major exception: assuming a prudent endowment total return of 8% in our fiscal year 2000 projections, we began a program of investment in people, programs, facilities and information technology here that presumed an increase in available income from our endowment for spending in our operating budget from $9 million in fiscal 2000 to an expected $13.5 million this year. Like other universities with endowments of a meaningful size, the recession put a major crimp in our situation. Having reached a high of $220 million, our endowment market value dropped as low as $159 million. It is finally back now to its pre-recession level. That means that, instead of having the $13.5 million in endowment income to spend this year that we projected five years ago, we have more like $10 million.

A truly critical feature of our strategic financial plan has been the willingness of the Board of Trustees, in order for the university to invest in getting better, to run a substantial operating deficit for a number of years, though not a cash deficit, by not fully funding the growing non-cash depreciation expense we must show on our audited financial statements. The idea here is that, during a time when we would be spending in excess of $100 million on new and renovated facilities—a powerful commitment to the principle that underlies showing depreciation in the operating budget—we would in fact be exercising good stewardship with regard to our facilities even though depreciation would not be fully funded. At the same time, we required that our multi-year financial plan “come together” and reach balance in a reasonable time period (initially 3-5 years), fully funding depreciation. Our greatest financial challenge is to get the budget back into balance while still finding ways to finance the momentum St. Lawrence has achieved so well in the last few years.

Budget-watchers among you know that we had a budgeted planned operating deficit for 2004-05 of $8.56 million, though we would be balanced on a cash basis. Over the course of the year, through very strong fund-raising results and serious budget discipline, the final operating deficit was $2.8 million, a $5.8 million positive swing, and we were cash positive at the level of $1.8 million.

On the matter of fund raising, we received $16.9 million in gifts from private sources last year, 19% more than the previous year and our third highest total ever. We also saw improved results in the major gifts category, receiving 8 gifts or pledges of $1 million or more—the largest number ever—while we also saw 400 more total donors to the St. Lawrence Fund compared to last year, 1,000 more than two years ago.

So, we have made substantial progress with our budget, but we need to make additional progress more quickly—and we need to find additional resources to continue to do what needs to be done to enhance the educational experience we provide our students. In the competitive world within which we function, standing still is not a realistic option.

• Strategic Planning: I need also to say something here also about strategic planning at St. Lawrence. At our June 2005 Canaras trustee retreat, realizing the large number of new trustees on the board who did not experience directly the evolution of our strategic planning assumptions, I agreed to put to paper over the summer our history with strategic planning, and to make clear the premises that have been guiding our strategy over the last several years. Even though I try to remind trustees and the St. Lawrence community of our premises in public writings and remarks, it is clear that, for many, some of our premises are unstated and therefore seem not subject to criticism as circumstances change. It is critically important that the leadership of the University engage constantly in strategic planning and strategic thinking, that our thinking be clear and public, and that we be open to criticism and challenge. This paper, which is now in draft form, will, I hope, help that to happen. It will be the main subject of an upcoming senior staff retreat, and subsequently it is my plan to share it with Faculty Council and the Priorities and Planning Committee, and then ultimately the Board of Trustees, where it will be a main focus of the October meeting.

The timing makes sense for a couple of reasons. We have just managed to begin Phase 1 of the science project, begin a multiphase arts facilities project, and begin the creation of a new health and counseling center at 76 Park St.—all long-sought-after strategic facilities objectives. What next? At the same time, we continue to have an operating budget that is not in balance, constraining our ability to mount new programmatic initiatives and to accomplish existing goals as fast as we would like. How are we going to deal with that? What’s our plan for getting to financial sustainability at the same time we find ways to keep up hard-won momentum? And finally, this year we begin again our Middle States self-study process in preparation for a 2007-08 site visit. That self-study must be well-grounded in the strategic thinking that is currently guiding the University. It is then, in my view, a good time to raise up these matters for public scrutiny and discussion.

With regard to Middle States it is important to note here that Grant has recently asked academic department chairs and program coordinators to begin the profound task of engaging departments and programs in a process of reflection and self-assessment that is to begin with an articulation of program specific learning goals. This will not be easy, but the spirit with which faculty leaders have embraced this important task is just terrific. Thank you.

As you know from earlier communications, how well and usefully we engage in outcomes assessment will be a key piece of our upcoming Middle States review. I believe we are good at this already, but in certain ways need to become better. Our goal is to capture the profound benefits of excellent self-assessment in an efficient, strategic way, avoiding the mindlessly bureaucratic activities that at many institutions have given outcomes assessment a bad name. I know you are willing and perhaps even enthusiastic to do the right thing here, and that you will share loving criticism when you think we are getting it wrong.

When asked to speak about the “state of the university,” it occurred to me just to say “New York” and leave it at that. I think you can see from these remarks that we have accomplished a very great deal together, even as we understand that we have a great deal more to do. I’m going to be doing all I can this year to get the good news about St. Lawrence out to the wider world. I do so with real excitement about our present and future, and with great pleasure that we are in this wonderful work together.

Please remember that Ann and I are hosting a reception at MacAllaster House at the completion of this convocation. I’d be delighted to engage you informally on any of these issues there, or just reconnect with friends and colleagues as we start up this great work again together. Thank you!