Neal Smatresk: The TT Interview

In the roughly six weeks that Neal Smatresk has served as president of the University of North Texas, he has encountered some notable challenges and has already made a distinctive mark on the institution.

On Thursday, the University of North Texas System regents approved his institution’s proposal for a unique approach to guaranteed tuition.

Because of a law passed in 2013, every public university must offer incoming students the option of a four-year, fixed-rate tuition starting this fall. Across the state, higher education system boards have been approving these new payment plans. But UNT’s optional plan, which it is calling the “Eagle Express” plan, is unique in that it offers students up to $4,000 back if they graduate in four years.

This new payment scheme for students comes at an interesting time for the university, which is dealing with revenue shortfalls. The extent of the shortfall has not been determined, but the fallout has already begun. In the last two months, at least two of the school’s finance officers have resigned.

Smatresk, who previously as the president of the University of Nevada, Las Vegas, spoke with The Texas Tribune this week about his new tuition plan, how to get students to graduate on time and the school’s financial situation.

The following is a transcript of the conversation that has been edited for length and clarity.

TT: Your guaranteed tuition plan is different from others we’ve seen. Where did the idea come from for doing it this way?

Smatresk: Well, one of the things many other institutions have done is said, “We’ve got to offer a fixed tuition plan. Let’s put something out there. Let’s try to build in some of the inflation costs, so it will be a little bit higher, but we’ll lock it for a period of years.”

We thought this would be a great opportunity to actually try to positively change student behavior and make our institution better at moving students toward graduation.

The concept of an incentive isn’t exactly new. What we’ve done is built in a rather large graduation incentive into the last year of a plan, so it’s a modification of a fixed-rate plan. It’s a fixed rate that’s slightly higher than the standard rate in years one and two, drops below the standard rate in year three and offers a $4,000 graduation incentive — in other words, we’ll discount tuition in year four — for students who make timely progress.

Let me back up and talk about what I perceive to be some of the major problems with timely graduation.

First, when students take less than a full load, their probability of ultimately graduating drops fairly dramatically. We all know that a full-time student is more likely to graduate. So we want to get students to be full time and to stay in school and continue to make good progress.

Second, students who go part time are more likely to wander through the curriculum, and they accumulate more hours than they should. They’re paying for those hours. If you’re a student and you rack up 140 or 145 hours, that adds to the total cost of your education.

Finally, if you take five or six years to graduate, you could have been in the workforce for two or three of those years. We’re going to try to encourage students to get out so they can start earning money.

We hope that reward will incentivize this behavior that we think is very positive.

TT: How does it make financial sense for the university?

Smatresk: If everybody went on this program, you might say, “Wow can you afford it? You’re basically sacrificing any increases in tuition through this model.”

The answer is that our increase in the number of full-time students in the upper division, because we’re retaining them better, is so great that we actually end up generating more full-time equivalent students at the upper division, and more cumulative full-time equivalent students, and the state formula pays us at a higher rate for those students.

So we can save the students money, and we in turn can grow our enrollment and our graduation rate and make more money. It’s a good deal. It’s win-win.

We also know that no other school in the state of Texas is looking at it this way. We think we’re unique and innovative. This is going to be something that lets us really promotes what a great value UNT’s education is and how we’re going to try to make sure smart students who are motivated have access to our programs.

TT: But the Eagle Express plan is optional, right? Some schools make their fixed-rate plans mandatory.

Smatresk: We’re making it optional because we know not all students are going to be right for this plan. Some students are going to want to take the slow boat. Some students have unique situations. And I’ll be honest, this is definitely an experiment in progress. If it’s not the right-size incentive, we’ll adjust it.

TT: So you haven’t been president for very long. How have the first few weeks going?

Smatresk: It’s been an interesting ride for the past six weeks. We’ve had my inaugural set of minor emergencies. But now that we’re settling in, I’m feeling really positive about the institution. I think there’s a huge amount of pent-up goodwill for us. To be really honest, I see so much opportunity in our ability to claim the creative space in Texas. That mash-up of technology-enabled creativity is something I think UNT’s good at.

TT: What about the revenue shortfalls UNT is dealing with? I know that’s currently in the process of being audited.

Smatresk: We’re on it. We’re identifying the size of our structural deficit. We’re adjusting our budgets accordingly. I will say that whatever challenges we have, they won’t be borne on the backs of our students. We’ll take care of those ourselves through a little belt tightening. Personally, I think we’re in quite strong shape. I’ve got adjustments to make in the budget.

I’m more hopeful than not that we’re going to make some real progress as we reorganize a little bit, adjust expectations, and as we begin to build that hybrid community that will be producing a workforce that’s going to make Texas prosperous.

When you stop being creative and stop trying new things, you start moving backwards. I don’t see us moving backwards. I think we’ve got a great institution. We’ve had a few hiccups that we’re going to have to resolve.  And to some extent, we’ll have to trim areas of the university that aren’t sustainable or aren’t efficient.

I think that’s healthy. I’m not going to say I love budget cuts, but I am going to say whenever you have to trim your budget and tighten your belt, it’s a great way to understand what’s most mission critical. I think that exercise is useful for any organization. We’re going to make the best of it.