AUBURN UNIVERSITY STRATEGIC PLANNING SITUATION ASSESSMENT October 2006

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AUBURN UNIVERSITYSTRATEGIC
PLANNINGSITUATION ASSESSMENTOctober 2006
DRAFT FOR DISCUSSION
Messina Graham
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Contents

• I. Overview of Strategy-Development Process .
  . . . . . . . . . . . . . . . 4
• II. Profile of the Environment . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . 6
• Summary Slides . . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . . .
  7
• Implications . . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . . .
  . . . 9
• Auburn University (AU)
• Profile
• Students . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . .19
• Research . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . .80
• Extension . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . .99
• Finances . . . . . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . 102
• Assessment of Strengths,
  Weaknesses,
• Opportunities, and Threats (SWOT
  Assessment) . . . 113
• Strategic Challenges and
  Implications . . . . . . . . . . . . . 117

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Contents (Continued)

• IV. Auburn University Montgomery (AUM)
• Comparison of Auburn University and
  AUM . . . . . . . . . 125
• Profile . . . . . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . . .
  . . . 129
• Assessment of Strengths,
  Weaknesses,
• Opportunities, and Threats
  (SWOT Assessment) . . . .151
• Strategic Challenges and
  Implications . . . . . . . . . . . . . 155
• V. Next Steps . . . . . . . . . . . . . . . .
  . . . . . . . . . . . . . . . . . . . . . . . . .
  .159
• Appendices
• Auburn University Strategic
  Planning Profile of the
• Environment, July 2006
  (separately bound)
• Ranking Methodologies . . . . .
  . . . . . . . . . . . . . . . . . . . . .161
• Selected Information Sources .
  . . . . . . . . . . . . . . . . . . . .164

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I. Overview of Strategy-Development Process
1. SITUATION ASSESSMENT
2. OPTION GENERATION
3. OPTION EVALUATION
4. STRATEGY SELECTION
5. EXECUTION

• Profiling the
• environment
• Profiling Auburn
• - Main campus
• - AUM
• Identifying
• strategic
• challenges and
• implications

• Candidate
• strategic
• objectives
• and directions
• Rationale for
• each option

• Detailed
• assessment
• of each option
• Comparison of
• options

• Rationale
• Full description,
• including goals
• and action
• initiatives

• Implementation
• plan, responsibility
• assignments
• Progress measures,
• review milestones
• Adjustments and
• adaptation

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Key Elements of a Strategy

• Special attributes and their sources
• Differentiation that confers relative advantage
• Consistent with vision and mission

DISTINCTIVENESS

• Choices about allocating scarce resources
• Fact-based decision-making
• Coherent set of initiatives

RESOURCE COMMITMENTS

• Implementation plans, responsibility assignments
• Progress measures, review milestones
• Adjustments and adaptation

EXECUTION

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II. Profile of the Environment
Summary Slides - Pervasive Trends
- Forces Affecting Higher Education
Implications - For all universities - For AU
(Illustrative)

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Summary
FORCES AFFECTING HIGHER EDUCATION
PERVASIVE TRENDS

• Enrollment Growth
• Affordability Challenge
• Demands for Quality
• Improvement
• Efficiency Imperative
• Diverse Perspectives on the
• University in the Twenty-
• First Century

• Globalization
• Information Revolution
• Natural-Resource Demands
• and Environmental Strain
• Aging Populations and
• Increasing Minorities

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Pervasive Trends

• Transforming worldwide commerce and
• employment
• Generating global competition for knowledge work

GLOBALIZATION

• Information technology, telecommunications,
• connectivity
• Dramatic and ubiquitous impacts

INFORMATION REVOLUTION

• Demand increasing because of global economic
• and population growth
• Environment under strain

NATURAL RESOURCES

• Aging populations in developed countries
• Rapid rise in U.S. minorities, especially
• Hispanics

DEMOGRAPHICS

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Implications of Pervasive Trends for Universities

• Ensuring competitiveness of graduates
• Increasing students international awareness

GLOBALIZATION

• Multiple challenges and opportunities in
• teaching and learning, research, extension,
• and administration and operations

INFORMATION REVOLUTION

• Teaching and learning, research, extension and
• operations opportunities
• Examples alternative energy sources,
• conservation, agricultural technologies

NATURAL RESOURCES

• Enriching lifelong learning
• Embracing greater diversity

DEMOGRAPHICS

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Implications of Higher-Education Trends for
Universities

• Focusing on enrollment objectives

ENROLLMENT GROWTH

• Ensuring diverse access

AFFORDABILITY CHALLENGE

• Innovating and experimenting with new curricula
• and teaching approaches
• Measuring performance in learning and teaching

QUALITY IMPROVEMENT

• Implementing proven business practices to
• reduce cost growth

EFFICIENCY IMPERATIVE

• Re-examining vision and mission
• Redesigning business model to adapt to
• dramatic change

21ST CENTURY UNIVERSITY

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Implications for Auburn University
Pervasive Trends
ILLUSTRATIVE
TREND / IMPLICATIONS
POSSIBLE AUBURN RESPONSE

• Raise performance expectations for students and
• measure results
• Develop new approaches to undergraduate
  education
• Increase international course and language
  skills
• offerings and requirements

GLOBALIZATION

• Competitiveness of
• graduates
• Students international
• awareness

INFORMATION REVOLUTION

• Ensure implementation of technologies that
  enable
• cost and quality improvements

• Challenges and
• opportunities across
• the enterprise

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Implications for Auburn University
Pervasive Trends
ILLUSTRATIVE
TREND / IMPLICATIONS
POSSIBLE AUBURN RESPONSE

• Advance teaching and research in alternative
  energy
• sources, conservation, agricultural
  technologies
• Promote energy-efficient building design and
  operations

NATURAL RESOURCES

• Opportunities across
• the enterprise

DEMOGRAPHICS

• Explore distance learning for specific markets
• (e.g., alumni, seniors)
• Prepare for challenges resulting from growth in
  Hispanic
• students

• Enriching lifelong
• learning
• Embracing greater
• diversity

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Implications for Auburn University
Forces Affecting Higher Education
ILLUSTRATIVE
TREND / IMPLICATIONS
POSSIBLE AUBURN RESPONSE
ENROLLMENT GROWTH

• Strengthen image of value to compensate for
  possible
• reduction in applicant pool

• Focusing on enrollment
• objectives

AFFORDABILITY CHALLENGE

• Constrain expense growth through improving
  efficiency
• and applying technology
• Increase resources available for need-based aid

• Ensuring diverse
• access

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Implications for Auburn University
Forces Affecting Higher Education
ILLUSTRATIVE
POSSIBLE AUBURN RESPONSE
TREND / IMPLICATIONS
QUALITY IMPROVEMENT

• Raise performance expectations for students
• Innovate and experiment with new teaching
  approaches,
• including beyond the classroom
• Focus on learning objectives and measure results

• Developing innovative
• teaching and learning
• approaches
• Measuring performance
• in learning and
• teaching

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Implications for Auburn University
Forces Affecting Higher Education
ILLUSTRATIVE
TREND / IMPLICATIONS
POSSIBLE AUBURN RESPONSE
EFFICIENCY IMPERATIVE

• Perform a comprehensive review of cost elements
  and
• processes
• Implement focused technology solutions that
  reduce or
• contain costs
• Examine approaches to help enable the faculty to
  become
• more productive in their teaching and research
  activities

• Implementing proven
• business practices to
• reduce cost growth

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Implications for Auburn University
Forces Affecting Higher Education
ILLUSTRATIVE
TREND / IMPLICATIONS
POSSIBLE AUBURN RESPONSE
21ST CENTURY UNIVERSITY

• As a key building block for creating a
  twenty-first
• century vision for Auburn, perform an
  assessment of
• the Universitys strengths and weaknesses, and
  profile
• the opportunities and threats it faces (SWOT
• assessment)

• Re-examining vision and
• mission
• Redesigning business
• model to adapt to
• dramatic change

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III. Auburn University
Profile Assessment of Strengths,
Weaknesses, Opportunities, and Threats (SWOT
Assessment) Strategic Challenges and
Implications
Acknowledgment The Director and staff of
Auburns Office of Institutional Research and
Assessment were extremely helpful in compiling
and critiquing selected data presented in this
profile of Auburn, and in suggesting additional
sources. Even so, the selection of data to be
presented, all judgments expressed, and any
remaining errors are the sole responsibility of
Messina Graham

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Profile of Auburn University

• Students
• Research
• Extension
• Finances

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1. Students
Student demographics. AUs demand
outlook (in terms of projected numbers of
high-school graduates) is relatively flat, and
its current acceptance rate is above 80 percent.
It may be challenging for Auburn to maintain
enrollment levels while at the same time raising
tuition and the target scores of entering
freshmen In-state competition. Reasons
for strong students to choose in-state
competitors likely include family allegiance,
cost, and preferences for certain campus
environments or programs Out-of-state
competition. Out-of-state students face a high
financial penalty for attending AU. This is
especially true for strong students from Georgia,
Tennessee, and South Carolina who qualify for
HOPE or similar merit scholarships Value
proposition (real and perceived quality of the
institution and benefit of attending, relative to
cost). Overall, AUs value proposition is in the
middle range of its regional peers. But several
AU programs have compelling value propositions

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1. Students (Continued)

• Scope for selectivity. AUs scope for
  greater student selectivity is limited because,
  given its large size in a relatively small state,
  it enrolls a higher fraction of its home states
  high-school graduates than competitors in Georgia
  and Florida enroll from theirs
• Value-added (impact of the undergraduate
  program on building students skills). AUs
  current value-added performance evidences
  significant opportunity to improve. This
  observation applies to many peer institutions as
  well
• Distribution by areas of study. AUs
  distribution of students by area of study is
  similar to that of Alabamas leading universities
  overall and to that of a highly-regarded
  land-grant institution in another state, Texas
  AM
• Tuition trends. Over the past decade,
  AUs tuition increases have far exceeded
  inflation as measured by the Consumer Price Index
  (CPI)

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STUDENT DEMOGRAPHICS The regional demand
outlook for university attendance appears
reasonably level over time. Alabamas
public high-school graduate numbers are projected
to peak in 2007, and by 2015 to be five
percent below their 2005 level. After their
recent rapid growth, Georgias and
Floridas numbers of high-school graduates are
projected to level off between 2010 and
2014, and then to begin growing again. (It is
worth noting that there are significant
variations among demographic projections). In
total, Georgia produces approximately two
times as many, and Florida more than four times
as many, public high-school graduates as
Alabama. Chart 1

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Public High-School Graduates 1995 - 2015
Chart 1
Alabama
Number of Students
2015 - Down 5 from 2005
37,400
37,900
37,100
35,000
35,300
Source National Center for Education Statistics
(NCES) Projections to 2015, Table 24
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Public High-School Graduates 1995 - 2015
(Continued)
Chart 1
Georgia
Alabama
Number of Students
2015 Up 10 from 2005
80,500
78,900
73,700
62,500
56,300
37,900
37,400
35,000
37,100
35,300
Source NCES Projections to 2015, Table 24
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Public High-School Graduates 1995 - 2015
(Continued)
Chart 1
Alabama
Florida
2015 Up 10 from 2005
Number of Students
154,400
150,000
139,800
111,000
89,000
37,400
35,000
37,100
37,900
35,300
Source NCES Projections to 2015, Table 24
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Hispanics, currently a very small portion
of high-school populations in Alabama and
Georgia, are projected to make up ten percent of
Alabamas and 26 percent of Georgias
high-school graduates by 2018. Hispanics
historically have attended and completed
college at much lower rates than whites and
African-Americans, potentially reducing the
applicant pool unless this group can be
integrated more successfully into higher
education. Hispanic students are expected to
account for over one-third of Floridas public
high-school graduates by 2018, equivalent
to twice the number of African-American
graduates. Chart 2

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Minority Shares of Public High-School Graduates
Chart 2
Alabama
32
30
10
1
2002
2018
2002
2018
Note AU 1.5 Hispanic enrollment in 2005
Source SREB Fact Book on Higher Education,
2005 AU OIRA
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Minority Shares of Public High-School Graduates
(Continued)
Chart 2
Georgia
Alabama
33
32
30
27
26
10
2
1
2002
2018
2002
2018
2002
2018
2002
2018
African-American
Hispanic
African-American
Hispanic
Source SREB Fact Book on Higher Education,
2005 AU OIRA
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Minority Shares of Public High-School Graduates
(Continued)
Chart 2
Alabama
Florida
32
36
30
20
18
17
10
1
2002
2018
2002
2018
2002
2018
2002
2018
African-American
Hispanic
African-American
Hispanic
Source SREB Fact Book on Higher Education,
2005 AU OIRA
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Over 40 percent of AU's out-of-state
freshmen entering in fall 2006 were from Georgia,
down slightly from 2005. Chart 3
- This high dependency on Georgia as AUs
main out-of-state market does not provide
much opportunity for diversification in
case of a policy or economic change that
affects AUs enrollments from that state
- However, AU captures an impressive
31 percent of all Georgia students and 19
percent of all Florida students who
leave their states to attend a public research
university in the southern region.
Chart 4 - Out-of-state freshmen
score at levels slightly below those of Alabama
residents on the ACT. The other
states flagships will naturally tend to attract
the strongest students from
their own states. Chart 5

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AU Freshmen by State 2006

Chart 3
100 4,077
Georgia 17
Florida 6
Tennessee 4
Alabama 61
Other 12
Source AU OIRA
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AU Share of Freshmen Leaving Their Home State for
an SREB Public Research University 2005

Chart 4
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19
14
Source AU OIRA
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Equivalent ACT Scores of AU Freshmen 2005

Chart 5
24.4
24.1
Source AU OIRA
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With an acceptance rate at above 80 percent,
there is little room for Auburn to increase
enrollment by admitting more liberally. Chart
6 At 26 percent, AUs yield on out-of-state
acceptances is half of its in-state yield. Chart
7

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AU Total Applications, Acceptances, and
Enrollment 2005
Chart 6
Note 81.5 percent of applicants are accepted,
with a 36 percent yield
Source AU OIRA
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Yield Rate of AU Admitted Students In-State and
Out-of-State Average, 2002 - 2005

Chart 7
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26
Source National Student Clearinghouse AU
Office of Admissions Records
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IN-STATE COMPETITION University of Alabama (U of
A), University of Alabama at Birmingham (UAB),
Southern Union State Community College (SUSCC),
University of Alabama at Huntsville (UAH), and
Troy represent the main competition for Alabama
students, together accounting for half of all AU
admits who enrolled elsewhere. It is worth
questioning whether prospective students who
decided to attend much less academically strong
schools were actually an appropriate admissions
match for AU. If practicable, declining
admission to the least-qualified candidates would
lead to a lower acceptance rate, which would both
present a stronger image of AU and result in a
higher US News World Report (USNWR) score, at
minimal cost in numbers enrolling. Charts 8, 9
The three U of A schools, along with Samford
and Birmingham Southern (BHAM S), enrolled 350 of
the best-prepared AU admits in 2003, compared
with 960 who chose Auburn. Reasons for strong
students to select these competitors likely
include family allegiance, cost, and
campus-environment and program preferences

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Top 10 Competitors for Alabama Students Schools
Attended by AU Admits Not Enrolling at Auburn
2003
Chart 8
Best-Prepared AU Admits (ACT 27 and Above)
All AU Admits
Percent
Number
Percent
University of Alabama (U of A) University of
Alabama at Birmingham (UAB) Southern Union State
Community College (SUSCC) University of Alabama
at Huntsville (UAH) Troy University
(Troy) University of South Alabama
(USA) Birmingham Southern University (BHAM
S) Samford University (Samford) University of
North Alabama (UNA) Auburn University Montgomery
(AUM) Combined Total (Ten Schools) Other
Institutions
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7
144
9
2
49
8
--
--
6
3
56
5
--
--
5
1
23
4
2
42
4
2
33
3
--
--
3
--
--
70
17
347
30
83
In-State and Out-of-State
Source National Student Clearinghouse AU
Office of Admissions Records
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Competition for Alabama Students Schools
Attended by AU Admits Not Enrolling at Auburn
2006
Chart 9
Cost versus AU ()3
Likely Reason (MG Assessment)7
Attend1
Best 272
Avg. GPA5
ACT Range (25 - 75)6
University type (USNWR Category)4
2003 Data
21-27 21-27 20-26 NA 22-28 21 19-25 23-29 23-28 18
-23 18-23
AU -- -- U of A 23 7 UAB 9 2 SUSCC 8 -- UAH
6 3 TROY 5 -- USA 5 1 BHAM S 4 2 Samford
4 2 UNA 3 -- AUM 3 -- TOTAL 70 17
-- -2,400 NR NR -2,600 -3,800 -2,800 17,000 8,700
-4,000 -3,530
88th best, more selective, large, public 88th
best, more selective, large, public Selective,
large, public Community college More selective,
mid-size, public Selective, mid-size,
public Selective, mid-size, public More
selective, small, private, Utd Methodist More
selective, small, private, Baptist Selective,
mid-size, public Less selective, mid-size, public
3.5 3.4 3.3 NA 3.4 NA NA 3.3 3.6 2.9 NA
-- Loyalty, price Price Price,
work Price Price Price Prefer small
private Prefer small private Price Price
Notes to this chart are on the next page
Source USNWR, August 2006 Messina Graham
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Competition for Alabama Students Schools
Attended by AU Admits Not Enrolling at Auburn
2006 (Continued)
Chart 9
Notes
Ranking versus all schools. For public schools
both AU and U of A were rated 39th
1Percentage of AL resident admits to AU who
instead attend each listed school 2Percentage of
ACT 27 resident and out-of-state admits to AU who
instead attend each listed school 3Cost equals
the total of tuition, fees, room and board (NR
denotes non-residential schools). Difference in
dollars per year between AUs full-pay tuition
and living expenses and those of listed school.
Negative number indicates school costs less than
AU 4Type of institution based on USNWR
categories 5Average of entering freshmens
high-school GPAs 6Lower and upper quartiles of
ACT scores of entering freshman class 7Messina
Graham judgment regarding why student might chose
the listed school over an offer from AU
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AUs combined in-state, full-pay
tuition, room and board are 18 30 percent more
than those of public-university
competitors. AU tuition is almost twice SUSCCs.
For the best-prepared students that AU would
probably seek to capture, there is no survey
evidence, but price would be a logical factor in
some of their decisions to decline AU for a place
at U of A or at the less academically-strong UAB,
UAH, or USA. U of A, UAH, and UAB are on
Princeton Reviews Best-Value list, while
Auburn is not. Chart 10

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Cost of Attending for Alabama Students 2005-06
Chart 10
Combined Tuition, Fees, Room and Board Dollars
13,000
7,500
10,700
10,500
5,400
5,700
9,200
4,900
4,800
5,500
5,300
4,800
4,300
2,700
AU
U of A Best-Value
UAH Best- Value
Troy
UAB Best- Value
SUSCC
Source USNWR, August 2006 SUSCC website
Princeton Review
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Using USNWRs overall scores as a
reasonable proxy for how students and their
parents value universities, AU appears to
represent a good value tradeoff for Alabama
students compared to out-of-state
flagships, even those that rank much higher
academically. Similarly, AU seems to
offer a better value proposition than the states
premier private schools, which
nevertheless attract well-prepared students.
There may be an opportunity to further
develop and position AUs Honors College as a
strong alternative to these small private
schools. Chart 11

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Price/Value Map Alabama Students Perspective
2005-06
Chart 11
Combined Tuition, Fees, Room and Board
BHAM S
ILLUSTRATIVE
GA Tech
USC
Clemson
UGA
UFL
Samford
UTN
Good value at various price points
AU
U of A
UAH
Troy
Value, measured by USNWR scores
USNWR score is based on a blend of peer
assessment, retention/graduation rates, class
size, faculty ratio, freshmen ACT scores, percent
in top ten percent of high-school class, and
alumni giving. See appendix for more detail
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Source USNWR, August 2006
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OUT-OF-STATE COMPETITION University of Georgia
(UGA) is the leading competitor for Auburn admits
from out-of-state otherwise, many universities
each command small shares. The principal rivals
are other states flagships. For the strongest
AU admits who enroll out-of-state, UGA, Georgia
Tech, Clemson, and the University of Florida
(UFL) enroll the largest numbers but in this
best- student group as well, several institutions
each account for small shares. Chart 12

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Top 10 Out-of-State Competitors 2003
Chart 12
Best-Prepared AU Admits (ACT 27 and Above)
All AU Admits
Percent
Number
Percent
University of Georgia (UGA) Clemson University
(Clemson) University of Tennessee (UTN) Georgia
Institute of Technology (GA Tech) University of
Florida (UFL) Florida State University (FL
S) University of Mississippi (UMS) University of
South Carolina (USC) Georgia Southern University
(GA S) Kennesaw State University (KSU) Combined
Total (Ten Schools) Other Schools
14 4 3 3 3 3 3 3 2 2 40 60
10 3 2 6 3 1 2 -- -- -- 27 73
209 65 41 124 62 21 46 -- -- -- 568
In-State and Out-of-State
Source National Student Clearinghouse AU
Office of Admissions and Records
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Out-of-state students, especially Georgia
students who qualify for HOPE, and their
families face a high financial penalty for
attending AU. Chart 13. Financial
considerations probably factor into the
college choices of a segment of these students.
AU ranks highest among competing schools
on USNWRs Most-Debt list. According to this
source, 65 percent of AU graduates incur
debt averaging 21,000. At the regional
Least-Debt winner, UGA, 43 percent of
graduates incur an average debt of 13,000
A Georgia high-school graduate who is admitted
to Georgia Tech or UGA may not choose AU
over those schools unless attracted by a specific
program with a strong reputation. In
general, the implication is that it is difficult
for AU to attract many top students from
Georgia A Georgia high-school graduate
who is not admitted to UGA can choose either to
attend an in-state school that ranks
lower than AU or to pay a substantial premium to
attend school out-of-state. To such
students, UTN and U of A may appear to offer
superior value compared to AU, family
allegiances aside

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Price/Value Map Georgia Students Perspective
2006
Chart 13
Combined Tuition, Fees, Room and Board
ILLUSTRATIVE
Clemson
UFL
AU
Value plays out-of-state for those who dont get
into UGA or GA Tech
U of A
UTN
Georgia schools for non-HOPE students
UGA
GA Tech
GA Southern
UGA HOPE
Tech HOPE
GA Southern HOPE
Georgia schools for HOPE students
Value USNWR Score
Source USNWR, August 2006
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VALUE PROPOSITION AU is in the middle range among
its regional public-school competitors in the
overall USNWR ranking. But AUs undergraduate
Engineering and Business programs advanced
from 2005 to 2006 and are ranked as stronger than
those of several competitors. Chart 14. The
Architecture program is nationally competitive,
and the Graduate School of Education and
the Communications Disorders programs both rank
well. Chart 15. There may be further scope to
emphasize this program performance in marketing
AU to students and parents who are attentive to
quality and career value when choosing schools
AUs value proposition to a Georgia high-school
student likely features big-time sports and
a more personal touch than UGA, with possible
draws for those interested in specific
programs with strong reputations. Another
potential positive is AUs graduation rate over
predicted performance, which was outstanding in
2005 and remains good in 2006. A
potential negative is AUs absence from Princeton
Reviews Best-Value list. AUs disappearance
in 2006 from the list of schools where students
(almost) never study should help attract
stronger undergraduates. Chart 15

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AU Competitor Rankings in USNWR 2005-06
Chart 14
BEST UNDERGRADUATE BUSINESS PROGRAMS
BEST UNDERGRADUATE ENGINEERING SCHOOLS
TOP PUBLIC UNIVERSITIES
2005
2006
2005
2006
2005
2006
26 29 UFL 30 29 UGA 30 29 Texas
AM 35 35 Georgia Tech 40 42 USC 47 42 FL ST
47 42 UTN 57 51 Auburn 57 60 U of
A 77 73 Clemson 87 83 UAB 87 83 UMS

9 8 Georgia Tech 16 13 UFL 19 21 UGA 21 21 T
exas AM 34 30 Clemson 38 39 Auburn 38 39 UTN
50 39 U of A 52 52 FL ST 52 54 USC
6 6 Georgia Tech 14 17 Texas
AM 31 30 UFL 57 60 Clemson 67 60 Auburn 67 71
UTN 102 U of A 102 USC
Not listed among top 105
49
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Auburns Value Proposition
Chart 15

• USNWR 2006 RANKINGS
• Ranked 18th (4th in 2005) in nation for
  retention over predicted level (but 98th for
  absolute retention)
• Ranked 88th among all schools and 39th among
  public schools
• Graduate School of Education in top 100 in
  nation
• Communication Disorders program in top 50 in
  nation
• Faculty-Student ratio better than U of A, UGA,
  and much better than UFL and FL ST
• Faculty resources class size, faculty pay
  and caliber rank significantly lower than for
  Georgia Tech, UGA, U of A, and UTN
• DESIGN INTELLIGENCE 2006 RANKINGS
• Architecture program 15th in nation (no
  regional competitor)
• Interior Design 7th in nation (LSU 10th, no
  other regional competitor)
• Industrial Design 3rd in South (after Georgia
  Tech)

Source USNWR Design Intelligence
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Auburns Value Proposition (Continued)
Chart 15
PRINCETON REVIEW LISTS AU RANK REPRESENTATIVE
COMPETITORS 2005 2006 RANKED ON
LIST Best-Value College (Fabulous NOT
LISTED NOT LISTED U of A, UAB, UAH, Clemson,
Education at Reasonable Price) University of
South Carolina, FL ST, GA Tech Town-Gown
Relations are Great 9 11 Samford, Clemson,
Texas AM Students Pack the Stadiums 11 13 U
GA, UFL, UNC, UTN, UT Austin U of A,
Clemson Their Students (Almost) Never
Study 10 NOT LISTED UGA, UFL, UMS, UT
Austin Best College Library 14 15
LIST
Source Princeton Review
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AUs ACT scores in 2005 were no longer
the highest among Alabama public schools, as they
had been in 2004. U of As scores matched those
at AU, and UAHs scores were higher. AUs scores
are closer to those of lesser-ranked Georgia
Southern and GSU than to Georgias flagships, UGA
and Georgia Tech. AUs number of National Merit
Scholars is lower than that at regional
competitors including UFL and Georgia Tech.
Chart 16

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Freshmen ACT Scores for Leading Competitors
2005 25th to 75th Percentiles
Number of National Merit Scholars
Chart 16
GA Tech
100
28-32
UFL
230
25-31
UGA
49
25-30
Clemson
31
25-30
FL ST
10
23-28
USC
40
23-28
UTN
21
23-28
UAH
1
22-28
GA Southern
1
22-26
AU
29
21-27
U of A
68
21-27
UMS
36
20-26
20
25
30
35
Source USNWR, August 2006 National Merit
Scholarship Corporation Annual Report, 2005
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SCOPE FOR SELECTIVITY AU has limited scope
for greater selectivity, because its enrollment
is large in relation to the total number of
Alabamas high-school graduates a far higher
share than the flagships in Georgia, Texas, and
Florida educate, for example. Charts 17, 18
With two relatively large flagship
institutions in a comparatively small state, as a
matter of arithmetic AU cannot hope to
attain the elite undergraduate status of a Texas
AM or Georgia Tech. AU and U of A
enroll numbers equal to 18 percent of Alabamas
high- school graduates, while UT and Texas AM
enroll numbers equivalent to only six percent of
the Texas class. Other things equal, the Texas
flagships can be three times as selective as AU.
The picture for Floridas flagships is very
similar to Georgias their combined share of
high-school graduates is ten percent, but also
one institution is clearly academically stronger
than the other, able to draw the better students
and rank much higher

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55
Scope for Selectivity Freshmen as Percent of
States High-School Graduates 2005
Chart 17
Alabama
Georgia
18.4
9.9
9.5
8.9
6.3
3.6
35
24
66
50
Percent From Top 10 of High-School Class
Source USNWR NCES
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Scope for Selectivity Freshmen as Percent of
States High-School Graduates 2005
Chart 18
Texas
Florida
10.1
5.8
5.5
4.6
3
2.8
66
49
85
26
Percent From Top 10 of High-School Class
Source USNWR NCES
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Reportedly, 35 percent of AU students are
from the top ten percent of their high-school
class. Because Alabama is a small state
with two relatively equal flagships, this level
is almost inevitably lower than the 50
to 66 percent achieved by the Georgia and Texas
flagship schools, not to mention the
University of Floridas 85 percent. To reach
UGAs level of 50 percent of students
coming from the top ten percent of their
high-school class, Auburn would have to
capture about half of all Alabama high-school
graduates who finish in the top ten
percent, which would be exceedingly difficult
But South Carolina shows more similarity
to Alabama it is a small state with two top
national, public universities. Clemson's share
of its states high-school graduates is similar
to Auburns, and USCs share is actually higher
than U of As. Yet despite this market share of
talent challenge, Clemson ranks considerably
higher academically than Auburn, gaining much
higher marks for selectivity. It appears Clemson
has achieved this by working to position USC as
the clear second in the state, enabling Clemson
to attract the stronger applicant pool. Chart
19. Auburns particular challenge is that it is
viewed as equivalent to U of A academically,
diluting both Alabama universities selectivity

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58
Scope for Selectivity Freshmen as Percent of
States High-School Graduates 2005
South Carolina
Chart 19
21
12
9
Percent From Top 10 of High-School Class
66
49
Source USNWR NCES
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Another perspective on this limited scope
for selectivity is that if AU aspired to reach
Clemsons ACT scores, (i.e., to move the
ACT lower-quartile point up to 24), it would
have to replace 900 low-scoring freshmen in
its current class profile with new students
scoring 24 or higher. But the pool of
higher-scorers is finite (absent any marked
improvement in Alabamas quite weak high-school
performance), and AU competes with other
institutions to recruit from this pool. Adding
900 higher-scorers would require increasing AUs
share of all such Alabama students from 25
percent to 37 percent, largely at the expense of
U of A, UAB, UAH, Samford, Birmingham Southern,
and Troy. While there probably are incremental
opportunities to gain some market share, a goal
of 50 percent share gain in a rather mature
market seems unrealistic. (Note The
foregoing analysis is based on data reported in
2005. In the August 2006 USNWR report, Clemson
has moved its lower-quartile ACT bar one point
higher and AUs has decreased by one point,
making catch-up that much harder). Chart 20

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Alabama ACT Scores Distribution - 2005
Chart 20
Shares of Those with ACT of 24 and Over
AU 25
Other 27
100
57
Troy 3
20
BHAM S 4
23
20
23
U of A 21
UAH 6
Samford 6
UAB 8
20 or below
21 - 23
24 and over
Number of Students
18,263
6,467
7,392
32,122
7,400 target students for improving freshmen
scores at AU
2004
Source ACT USNWR
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The State of Alabama receives a D- grade
from the National Center for Public Policy and
Higher Education on the measure of High-School
Student Preparation to Succeed in College.
Relative to other states, a smaller fraction of
Alabama high-school students perform well on the
ACT and Advanced-Placement tests. Chart 21.
This makes it more difficult for Auburn to be as
selective as universities in many other states

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62
Alabama High-School Student Preparation
Chart 21
ACT Performance Percentage of Students
Scoring in the Top 20 Nationally 2005
Advanced Placement Performance Percentage
of Students Scoring 3 or Higher On At Least One
AP Exam 2005
20
14.4
14.1
5.3
Source Measuring Up, 2006 Advanced Placement
Report to the Nation, 2006
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AUs 25 percent share of the states
National Merit Scholars, while much lower than
that of rival U of As, is similar to
UGAs share of Georgias National Merit Scholars.
Increasing the number of in-state
National Merit Scholars at AU would largely have
to occur at the expense of U of A, since
Alabamas other schools enroll only 16 percent of
the total. Chart 22. National Merit
Scholar finalists are those high-school students
who score highest in their states on the
Preliminary SAT test in junior year and whose
school record does not disqualify them.1
This designation may not be a necessary and /
or sufficient marker for a university
that is intent on targeting a desirable group of
academic stars. Moreover, the National Merit
Scholar designation does not reflect any of
the non-academic strengths such as
participation or excellence in athletics, arts,
student leadership, community service and so on
that leading universities typically seek
to recruit to their student body. Recruiting
more National Merit Scholars would have
no impact on AUs position in the leading
rankings 1 Only six percent of
these top-scoring semi-finalists are
disqualified, so the screening of in-school
performance does not provide universities with
much evidence of academic excellence.

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64
Competitor Shares of National Merit Scholars -
2005
Chart 22
Alabama (116 Students in total)
Georgia (208 Students in total)
Other 3
1
Auburn 29
Emory 56
25
27
59
48
8
Samford 9
8
GA Tech 100
24
U of A 68
UAB, BHAM S, UAH, Other 10
UGA49
Georgia colleges import a net 19 Scholars above
the 189 state winners
Source National Merit Scholarship Corporation
Annual Report, 2005
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VALUE-ADDED Input measures such as admission
yields, ACT scores, USNWR rankings, and tuition
do not indicate how well the university educates
its undergraduates its value-added. In terms
of the competition among peer schools to enroll
students, that neglect of value-added is
currently appropriate, since prospective
students, parents and high-school counselors have
limited access to (or understanding of)
comparisons of value-added. The informed
student prospect will consult USNWR and Princeton
Review and form a subjective impression from a
campus visit and conversations with friends, but
that is the extent of his or her information
about a university Still, as suggested
in Chapter II, Profile of the Environment,
value-added is a natural way for
Auburn to consider responding to many of the
external forces at work. These possible
responses include raising performance
expectations for students, developing new
approaches to undergraduate education,
strengthening AUs value image, and focusing on
learning objectives and measuring
results

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66
AU has been among the fairly early
adopters of the two main assessments of
value-added that have received
widespread national support and a degree of
validation the Collegiate Learning
Assessment (CLA) and National Survey of Student
Engagement (NSSE). CLA results so far
show that AU is roughly at parity with most other
participating schools but behind the
best schools in terms of developing desirable
skills in its undergraduates. Relative
to the top 10 percent of participating schools
nationally, Auburn earns a B or C grade
on its educational approaches, as broadly
measured by the NSSE. Chart 23

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67
Measures of Auburns Value-Added
Chart 23
COLLEGIATE LEARNING ASSESSMENT (CLA) 2005
2006
At Expected Level (on par with 60-75 of
CLA-participating schools)
AUs OVERALL RESULT
SENIORS PERFORMANCE BY TASK (RELATIVE
TO EXPECTED LEVEL)
Analytic Writing Make an Argument Critique an
Argument Performance Task
Below Expected Level At Expected Level Below
Expected Level At Expected Level
Source AU OIRA
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Measures of Auburns Value-Added (Continued)
Chart 23
NATIONAL SURVEY OF STUDENT ENGAGEMENT
(NSSE) Academic Challenge 79.8 82.5 Act
ive, Collaborative Learning 75.7 87.7 Student-Facu
lty Interaction 77.1 76.4 Enriching
Experiences 75.3 70.1 Supportive
Campus 88.7 88.5 Implied Improvements More
Assigned Reading and Writing More Time Preparing
for Class More Emphasis on Developing
Higher-Order Cognitive Skills
AU Scores 2006
Freshmen
Seniors
Where 100 equals the average score of the top 10
percent of participating schools
Source AU OIRA
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A gross measure of a universitys
educational effectiveness, cited by the Spellings
Commission among others, is its students
six-year graduation rate. Against this measure,
AU has performed well relative to graduation
rates predicted from the ACT scores of entering
students. Even so, it must be considered a
disappointing result that only 62 percent of the
1999 entering class had obtained their AU degrees
by 2005. This level is below that of most of
AUs research university competitors and below
the figure for U.S. four-year schools overall.
Chart 24

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70
Six-Year Graduation Rate AU versus Selected
Competitors
Percent of 1999 Entering Class Receiving
Bachelor's Degree
Chart 24
79
76
75
74
66
National Average 66
65
63
57
62
56
Clemson
FL ST
USC
GA Tech
UFL
AU
U of A
UGA
UTN
UMS
Source USNWR, 2006 Spellings Commission final
report
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DISTRIBUTION OF STUDENTS BY AREA OF
STUDY Auburns current distribution of
undergraduates by college or school generally
reflects that of the states top four
universities taken together (AU, U of A, UAH, and
UAB). Liberal Arts is the most popular field of
study, followed by Business, Engineering, and
Science / Math. The traditional land-grant
studies account for about 40 percent of the
undergraduates. Chart 25. This pattern is
consistent with AUs long-established breadth of
studies as well as its position as a relatively
large university in a relatively small state

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Distribution of Undergraduates by School
Chart 25
State of Alabama 2005 AU, U of A, UAH, UAB
Auburn 2005
100 19,250
100 48,554
Human/Social Science 6
Nursing 3
Education 7
Liberal Arts 25
Agriculture 5
Other 11
Liberal Arts 24
Architecture 7
Human/Social Science 9
Science/Math 13
Science/Math 10
Business 19
Business 22
Engineering 15
Engineering 16
Education 8
Traditional Land Grant Studies
Source AU OIRA
72
Source AU OIRA U of A system
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73
For comparison, even Texas AM, in the huge
state of Texas (where specialization would be
relatively unconstrained by numbers of potential
students), has not specialized in technology
schools. Only 19 percent of AMs
undergraduates are in Engineering, fairly
comparable to Auburns 15 percent. Taken
together, AMs traditional land-grant studies
Engineering, Agriculture, Science,
Veterinary Medicine, and Architecture Colleges
account for 48 percent of all its
undergraduates. The same schools account for 40
percent of Auburns enrollment (and Auburn
does not offer undergraduates Veterinary
Medicine). Twenty-nine percent of AMs
undergraduates are in Liberal Arts or General
Studies, compared with 24 percent of Auburns in
Liberal Arts. Chart 26

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Distribution of Undergraduates by School
Chart 26
Texas AM - 2004
Traditional Land Grant Studies
100 35,700
Geosciences 1
Architecture 4
Science 5
Business 11
Veterinary Medicine 5
Agriculture 15
Liberal Arts 18
General Education Studies 11
Engineering 19
Education 11
Source Texas AM Fact Book
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Auburns leading shares of the top fours
students are in Architecture and Agriculture
where AU has the only programs followed by
Science / Math, Education, Liberal Arts,
Engineering and Business. The only two schools
that have a somewhat lower share than AUs
overall share of top four universities students
are Human Sciences and Nursing. Chart 27

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AU Shares of Alabama Undergraduates by School
Percent of AU, U of A, UAH and UAB Enrolled 2005
Chart 27
Education
Engineering
Business
Agriculture
Architect.
Human / Social Science
Nursing
Liberal Arts
Science/ Math
100
1,263
887
4,883
3,538
11,996
7,604
10,488
2,283
4,534
2003 for UAH and 2004 for UAB
Source AU OIRA U of A system
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With respect to AUs distribution of graduate
students by field of concentration, Education has
the largest share, followed by Engineering.
Chart 28

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Distribution of Graduate Students by School
Chart 28
Auburn - 2005
100 3,169
Architecture 4
Agriculture 7
Education 23
Other 8
Science/Math 9
Engineering 21
Liberal Arts 13
Business 15
Source AU OIRA
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TUITION TRENDS Over a decade, AUs tuition
increases have consistently far exceeded
inflation as measured by the Consumer Price Index
(CPI) Between 1995-1996 and 2005-2006,
AUs tuition increased at a compound annual rate
of 8.9 percent, 3.5 times the rate of inflation
as measured by CPI, and also twice the rate of
public four-year colleges in general
During this period, AUs tuition level moved from
being much lower than that of the average
public four-year college to about the same
Out-of-state tuition has generally been
maintained at 2.8 times the in-state level, very
slightly less than the average ratio of
SREB peers Over time, tuition increases
at public universities have been larger during
periods when state funding has been
less, a trend also reflected at Auburn
We currently operate under a model in which
educational expenditures at colleges and
universities across the country are rising by
about 4.5 to 5 percent annually.
(University System of Maryland Chancellor William
Kirwan) Continuing increases in net tuition that
are in excess of CPI carry the risks of
eventually creating resistance and reducing
enrollment, and if not somewhat attenuated by
financial aid to students who need it of
diminishing diversity in the student body

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2. Research
Although AUs research funding has increased
considerably in dollar terms during the past
five years, it has not kept pace with funding
increases at other universities. This result
reflects a much more competitive research
environment, in which success depends in part on
the availability of supplementary resources to
cover the costs generated by the research
enterprise in excess of the funding it provides.
AUs research funding is well below the Southern
Region Education Board (SREB) median
Total federal research expenditures are projected
to be at best flat or, more likely, to
decline over the next five years, driven by the
latest budget outlook for large federal deficits
into the indefinite future. Chart 29
- This deficit forecast in turn derives
largely from a combination of tax cuts,
entitlement growth for seniors,
and defense / security spending increases since
September 2001 - At the same time,
RD does not appear to have the strong political
constituency required to command a
growing share of the squeezed discretionary
budget

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2. Research (Continued)
- Accordingly, the American
Association for the Advancement of Science
(AAAS) forecasts a 10 percent real drop
in funding for the National Institutes of
Health (NIH), a modest increase in
National Science Foundation (NSF), Department of
Energy (DOE), and National
Institute of Standards and Technology (NIST)
funding (with a caveat that
projected increases often do not translate into
reality), and a decrease in all
other non-defense RD

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82
Projected Nondefense RD FY 2006 - 2011
Chart 29
Source AAAS Analysis Projected Effects of
Presidents FY 2007 Budget on Nondefense RD
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Alabamas 10 rank among states for
federal RD dollars is well ahead of its
population (23) and gross-state-product (25)
rankings, driven by massive DoD and NASA
intramural spending - The states
academic RD ranking (23) is in line with its
population. Federally-
funded academic RD ranks 20, but industry RD
lags at 32 - In Alabama, life
sciences account for 69 percent of all academic
RD dollars. In the U.S., life
sciences account for 59 percent of all academic
RD dollars. The difference
presumably reflects UABs funding
Research is becoming much more competitive, with
lower success rates projected for applications
for NIH grants (down to 19 percent in 2007 from a
recent high of 30 percent). Chart 30. Scale
matters the larger research institutions
generally have higher success rates

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84
National Institutes of Health (NIH) Research
Project Grant (RPG) Success Rate
Chart 30
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2007
85
Research is costly - In
general, as evaluated by several sources
including the Huron Consulting Group,
university research-related costs are
consistently somewhat greater than the
associated revenues, even including
indirect-cost reimbursement by the federal
government - The trend is
toward higher costs, driven by increased
compliance requirements and an
increasingly cross-disciplinary research process
- Additionally, state and other
funders typically reimburse at lower
indirect-cost rates than the
federal government - Despite the
costly nature of performing research, it creates
many benefits beyond the
university. For example, research dollars spent
generate economic activity that
multiplies the effect, and technology transfer
can create value-added intellectual
property and new companies that produce jobs
and wealth

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Research is becoming more
cross-disci