Background

Key transformation links

• The Speaker of the House, the Senate President Pro Tempore, and the Chief Fiscal Officer, Joint Fiscal Office, dated June 8, 2020, providing a system financial review of the VSCS – State Treasurer’s Report
• Report to the Vermont Legislative Joint Fiscal Office Concerning Vermont State Colleges System Funding for FY20 and FY21, dated June 8, 2020 by James Page – Page Report
• Final Report of the legislatively-created Select Committee on the Future of Public Higher Education in Vermont, dated April 9, 2021 – Select Committee’s Final Report
• Additional resources and background information considered by the Select Committee in developing their recommendations are available at the Select Committee’s website on the Joint Fiscal Office’s website.
• The Board adopted the recommendations of the Select Committee (as contained in the Committee’s December 2020 Report) at its meeting in February 2021.  See Approved Minutes of 2-22-21 Board Meeting, Resolution 2021-007 (Transformation of the VSCS), and VSCS-Transformation-Proposal.pdf
• In Act 74 of the 2021 legislative session, the state mandated system transformation and integration while also committing to stronger funding of the system, the member institutions, and Vermont students.  See Act 74 (as enacted) at pp. 177-182 (including specifically, at p. 181: “The Chancellor shall establish policies and procedures to implement the Board approved transformation plan as developed by the Select Committee on Higher Education.”).

How did we get here?

The Vermont State Colleges System was facing a significant and unsustainable structural deficit, even before the pandemic hit.[1] Declining enrollment across all campuses, smaller high school graduating classes, significant debt due to campus infrastructure needs, and chronic underfunding from the state had placed tremendous pressure on the finances of the system over the last decade. The VSC’s structural issues have been years in the making. See Finance and Facilities Materials (October 18, 2021) at pages 19-20 (Financial Ratios).

The pandemic intensified the financial woes and pushed the system to the brink of insolvency. The former Chancellor put forward a proposal to shutter three of our rural campuses in April 2020, which was promptly rejected by the state.[2] The state provided emergency bridge funding to keep each of our institutions open, while the state outlined its expectations for a complete and transparent system overhaul.

Why are we on this transformation path?

With the bridge funding provided in 2020, the state established the Select Committee on the Future of Public Higher Education in Vermont. The Select Committee was made up of legislators, members of the Governor’s administration, community stakeholders, a Vermont Tech student, a Castleton alumni, a Northern Vermont University faculty member, VSC administrators, and external stakeholders, including the presidents of the University of Vermont and the Vermont Student Assistance Corporation. The Select Committee was tasked with making recommendations for how the VSC and the state should move forward with a complete system redesign so the VSC could continue to deliver on its mission to Vermont and achieve financial stability.

The Select Committee recognized that the VSC’s financial challenges could not be reversed overnight. The Select Committee held regular public meetings between September 2020 and April 2021. The Select Committee reviewed materials and proposals from numerous stakeholders, including the NVU Strong Advisory Committee, the Labor Task Force for Public Higher Education, Vermont Technical College’s Transformation work, VSCS Thrive, and the VSCS Forward Task Force.[3] As well as reviewing an extensive volume of financial and enrollment data from the VSC and comparing this with comparable higher education institutions,[4] the Select Committee held interviews and focus groups with a broad range of internal and external stakeholders.

In its Final Report, released in April 2021, the members of the Select Committee unanimously agreed on a five-year plan for the state to increase the VSC’s state funding by over 67%, provide bridge funding to backfill our budget deficit as we transform, and sponsor the transformation work. In return, the VSC had to commit to a total system overhaul, including unifying Castleton University, Northern Vermont University, and Vermont Technical College as one new university while maintaining our current campus locations, consolidating administrative services across the system, and eliminating the structural budget deficit over the next five years.

The Select Committee recognized the VSC is an indispensable state asset, emphasized its mission to provide affordable, accessible, high quality, and relevant education to students of all types (including working adults, underrepresented and low income populations, and rural residents), on its physical campuses and through robust online education. It recommended that the VSC be restructured, preserving elements of our institutions’ history and traditions while collectively offering courses and programs in multiple modalities, including face to face and online, and according to schedules that remove barriers to students’ enrollment and success.

In February 2021, following a six-week opportunity for submitting written comments and a public listening session, the VSC Board of Trustees voted to adopt the plan outlined by the Select Committee.[5] The state endorsed the plan, established requirements for the VSC to meet as we implement the plan, and charged the Chancellor and the Board with executing the Select Committee’splan in Act 74, the Fiscal Year 2022 State Budget.[6]

For its part, the state increased the annual state support for the VSC by 16% this year, the largest one-year increase in VSC history. The state also provided the funds recommended by the Select Committee to sponsor the transformation work and backfill our budget deficit. Additionally, it provided over $16 million in direct student aid for scholarships, free tuition opportunities, and free classes this year.

We are not alone

Colleges and universities across the country are confronting the same challenges as the VSC. Indeed, several small private colleges in Vermont have closed in recent years.[7] The VSC institutions have benefited from being part of a public higher education system[8] but public systems have their challenges too, including in New Hampshire, Pennsylvania, Connecticut, and Maine. With the state’s unprecedented investment in the VSC and our students over the past eighteen months:

• 3,775 of our 10,551 students received a new state scholarship this year.
• Thanks to bridge funding, there have been no layoffs.
• State dollars, not student tuition dollars, are funding the transformation work.
• We were able to freeze tuition for the 2021-2022 academic year. 
• Our physical campuses remain open and accessible to our students.

Where are we now and where are we going?

With our multi-year transformation, the VSC is committed to revolutionary change – modernizing our academic programs, streamlining our administrative processes, strengthening our student services, and expanding our workforce development and continuing education programming. We are committed to doing this in a way that enhances our offerings to Vermont learners, keeps public higher education accessible in our rural communities, and seeks to eliminate our structural deficit.

Since April 12, 2021, Chancellor Zdatny has sent out a Transformation Update every two weeks, which later became a newsletter. An archive of each update can be found on this site and a selection of articles from the latest updates can be found below. This information can also be found under News and Updates.

Latest Transformation Updates

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Notes:

[1] A structural deficit exists when an entity’s expenses persistently exceed its revenues.

[2]  Because the system is one single corporate entity, the failure of any one of its institution would have an immediate and devastating impact on the financial sustainability of the remaining institutions.

[3] See Select Committee’s Final Report (April 2021) at Appendix C, pp. 134-37.

[4] See footnote 3, Final Report, at Appendix B, pp. 116-133.

[5] Although the Select Committee’s Final Report was not issued until April 2021, its central recommendations remained unchanged from its Initial Report in December 2020 and its February 2021 Revised Report. A copy of the Transformation proposal adopted by the Board is available here.  

[6] See Act 74 at p.181 (“The Chancellor shall establish policies and procedures to implement the Board approved transformation plan as developed by the Select Committee on Higher Education.”).

[7] These include the College of St. Joseph, Southern Vermont College, Burlington College, Marlboro College, and Green Mountain College.

[8] For example, two of the member institutions were able to rely on the support of their sister institutions to cover budget deficits with a system loan in recent years.