INTRODUCTION

The articulation of a strategic plan capable of guiding us to the year 2000 and beyond requires description and recognition of two critical realities: the nature of the world in which we find ourselves, and the present configuration of the institution itself. The dialectic between these two can be mediated and informed by the plan, but neither can be overwhelmed by it. Who and what we are, and what interest the world may have in us constitue two limits -- and guides -- to who and what we should (or even can) become.

Because neither of these realities presents itself in clear and unambiguous terms, the list of facts chosen to describe them -- and, therefore, to both limit and guide the plan -- is an act of judgment. The facts and projections employed here were sorted from the great bounty of socio-economic and demographic data that were consulted, and they seem the critical ones. A more detailed analysis of these data must eventually be presented, particularly in conjunction with the preparation of a financial plan for the University (see Initiative #2, Axiom #5 in Part III). What is offered here is a preview of that analysis.

Moreover, the aspects of the University that distinguish its history, its culture, and its mission are hard to find in its statistical profile. Along with informed and thoughtful descriptions of the modern social and personal need for higher education, these are among the most telling descriptors of our contemporary circumstance and challenge. The "facts"; used here to illustrate these are certainly chosen -- as are the demographic data -- but with no less attention to accuracy and importance. Whenever possible, they are drawn from surveys and other such sources rather than from subjective impression.

I. National Trends

Between now and the year 2000, total enrollment in U.S. institutions of higher education is expected to grow by 3%, and the share of this enjoyed by private 4-year colleges and universities is expected to fall slightly. This low growth projection is coming on the heels of a 23% expansion over the 10-year period since 1984. During that decade, a new increment of 1.6 million students entered America's colleges and universities; between now and the year 2000, the increment will be little larger than 250,000. Two-year institutions are projected to hold a steady 38% of the national total of higher education enrollment. Public and private 4-year schools will continue to vie for the remaining 62%, with public schools gaining slightly.

What is mysterious about all this is that the number of high school graduates is expected to rise between 1994 and 2000 (by an average of 2% per year), and this number actually fell between 1984 and 1994 (by an average of 1% per year). The solution to this mystery seems to lie in the changing enrollment patterns of women and the phenomena of global economic restructuring.

Women in Higher Education
Between 1984 and 1994, the proportion of women in 4-year institutions alone rose from 49% to 52%, contributing 300,000 more enrollments than historical growth patterns would have supplied. Since 1985, the college enrollment rate for women rose by 10% (to 67%), while it stayed the same for men (about 58%). At PLU, the proportion of women among enrollees rose from 57% in 1984-85 to 60% in 1993-94; among part-time students, it rose from 59% to 67%. This disproportionate growth has probably ended, and the existing proportions are expected to remain stable.

Global Economic Restructuring
During the last decade, part time enrollments, lifted by global economic restructuring, rose by 700,000 in 4-year institutions. This component is expected to swell by only 36,000 between now and 2000.

Given the continued pace of restructuring, this leveling off seems peculiar. Part of the explanation may be the emergence of a second or shadow economy. While the importance of a college degree for occupational success is rising -- the "participation rate"; (the percentage of high school graduates going directly to college) rose from 47% in 1973 to 63% in 1991 -- the global economy is splitting into two components. One of these (the "shadow"; economy) requires only modest schooling and no higher education. It is absorbing a part of the potential demand for higher education at -- and frequently even before -- the point of high-school graduation, and shifting it to later years when it is activated by career and occupational frustration.

Hence, the average age of students in higher education is rising at an unprecedented rate, and life-long learning (as a requirement for economic security) may be the key and perhaps sole supplier of significant growth in American higher education.

The Enrollment of Ethnic Minorities and Foreign Nationals
About 21% of the 1991 enrollment in all U.S. institutions of higher education was minorities, and 3% was international students. Private institutions were about 3% lower and 2% higher on these measures, respectively. PLU compares well enough with private institutions in its enrollment of foreign students, but it is seven or eight percentage points below the national average in respect to the enrollment of minorities -- and this average is certain to rise.

Between 1990 and 2010, the total U.S. population aged 0-17 years will expand by only 500,000 to 64.9 million. But the white component of that group will have shrunk by 3.8 million and the non-white component will have expanded by 4.4 million. About 2.6 million of this expansion will be Hispanic youth.

The enrollment of foreign nationals in American higher education is expected to rise. Our research universities are still the envy of the world, and this, along with the globalization of the world economy, is attracting a swelling stream of undergraduate as well as graduate students and scholars to the U.S.

II. Regional Trends

PLU has drawn 86% of its enrollment over the last 10 years from a 5-state region -- Washington, Oregon, Montana, Idaho, and Alaska. During the 1980's, when the U.S. population expanded by a little under 10%, the population of this region grew by 13% or 1.2 million. This growth rate is expected to continue above national levels through the year 2000.

State of Washington
More than two-thirds of PLU's enrollment has traditionally come from the state of Washington, the population of which grew faster in the 1980's than did the nation's by 8 percentage points. Immigration has accomplished most of this growth.

A disproportionate share of Washington's projected growth is expected to occur among persons of high school age. The state's high school graduating class in 1999 will probably be 27% larger than the senior class enrolled in 1994-95; that amounts to an increase of 16,626 to a total of 77,856 graduating seniors in 1999.

This large growth of the state's young, however, throws heavy strain on the income of wage and salary earners and is depressing personal income on a per capita basis; this will continue to make price a critical issue in the decision to purchase higher education.

PLU's Contributing Counties
More than half of PLU's enrollment has been coming from six counties in Washington -- Pierce, King, Snohomish, Kitsap, Spokane, and Thurston. In 1993, these counties just about mirrored the state in the proportion of their populations aged 10-19, in per capita personal income levels, and in population growth projections.

Tacoma
The cost of living in Tacoma is only about 3% higher than the average for the nation's cities and is at or significantly below the cost of living in the notable cities in the region. The city's location on, and commerce with, the Asian Rim, and its situation on Puget Sound and along the flanks of Mt. Rainier and the Cascades furnish the University with a natural orientation to the growing forces of globalization, to the needs of modern urban complexes, and to environmental responsibility.

Our principal competitor, the University of Washington, has initiated a branch operation in downtown Tacoma and is in the midst of a $33 million renovation designed to accommodate 1,230 students by the summer of 1997. By the year 2010, the branch may cover 47 acres and accommodate 6,000 students -- and in fields of study that may overlap many of our most highly enrolled programs of study.

III. PLU's Growth Reversal

During the period 1985-1993, enrollment in the state's public institutions of higher learning grew by 9,000 or about 4%, and in its independent institutions by 3,000 or 13%. Only 4 of the 15 independent colleges in the state had smaller enrollments in 1993-94 than they had in 1985-86. PLU experienced the largest decline. Why? The answer has to do with cost and marketing.

During the decade of the 1980's, PLU's comprehensive fee went up an average of 9.23 % per year -- from $5,899 in 1980-81 to $14,229 in 1990-91. In 1987 dollars, held constant, this amounted to a 4.3% average annual increase and a 52% overall increase. In the meantime, per capita income in Washington, on the same measures, fell by just under 1% and rose by 10.6%, respectively. These diverging trends were amplified by the fact that our financial aid contribution was actually declining during this period in ratio to our enrollment and price.

It appears that we priced ourselves out of our existing market without cultivating a new one; indeed, it appears that our enrollment growth excused a general reduction in our marketing activity during the middle and late 1980's.

IV. The University Today

We were wounded by our unexpected growth reversal in the late 1980's; we were not crippled by it. Why? The answer can be found in two surveys, taken at the turn of the current decade, of students applying to and admitted by the University -- whether or not they actually enrolled. Those surveys suggest that we are perceived as providing (1) an education which takes matters of value and faith seriously in (2) a core array of programs linked to occupational demand and (3) offered by a vibrant faculty immediately, frequently, and steadily accessible to students. Of these three, we are most praised for the quality and accessibility of our faculty. We presently await the report of a fresh study of our reputation, commissioned from Communicorp of Atlanta, Georgia, in the light of which we may choose to reshape parts of our plan. It is difficult to imagine, however, that evidence of slippage in our standing under these three criteria would precipitate alteration in our strategy.

Values
Public interest is rising in a higher education that is oriented by a general purpose. Some of this interest is absorbed in our region by institutions that promise a faith-centered inoculation of belief, often Christian in character. But it is increasingly hard to find institutions which openly suppose that the capacity for reverence is both a necessary condition and a consequence of the pursuit of truth by means of the unarmed mind. Ours is such an institution.

Today, the standard educational offering is infused with the modern axioms of value relativism or even nihilism, and -- in the large places, at least -- is proffered without particular responsibility for the atmosphere and culture in which it is absorbed. Again, we differ; our Lutheranism presents us with a created and therefore comprehensible world, for the welfare and understanding of which we are responsible. Our size and residential tradition (and it is our tradition even though about 60% of our students live elsewhere) oblige us to develop and maintain a community which can immediately provide the advice, nurture, and compassion which modern life so desperately needs.

Quality and Relevance of Programs
For most of our students, an important motive in seeking the education we offer is the expectation that it will provide them with a successful and stable occupational life. For most of them, what they are doing at PLU is not merely a reflective hiatus between high school and post-baccalaureate undertakings. Our programs in education, nursing, and business, for example -- at both the undergraduate and graduate levels -- constitute our leading products for the satisfaction of this demand. The high incidence of double and even triple majoring at PLU suggests that even those working outside professional programs -- in the arts and sciences, for example -- see their studies in the same light.

Our students expect us to provide them an effective and practical education on a schedule they can accommodate, even as they also insist that it be supplied with sufficient attention to issues of value and faith and in a caring, compassionate, and physically attractive environment. Increasingly, our students realize that their desire for training in fields experiencing current employment demand must be broadened by a new prospect, viz., that they shall enjoy occupational success over the long run only to the degree they are capable of thinking and even living internationally, and only to the degree they possess skills (rather than competencies) -- for they shall shed careers and acquire new ones perhaps as many as five times during their working lives.

We are increasingly called upon to supply evidence of our success in respect to these goals, and we must develop more adequate instruments to do so. How many careers do our graduates enjoy, on average? How successful are they in starting out in the one they chose before leaving PLU? Which skills that we helped them to acquire appear to be of lasting value, and to which should we and they have paid less attention?

Quality of Faculty
Beyond the fact that our faculty ranks with or above our competitors in respect to quality and reputation according to student applicants, there is also a recurrent report from graduates of the accessibility and caring attitudes of our faculty.

The real proof of the quality and commitment of the faculty is in the long list of well-known stories of members exceeding any reasonable standard of duty to counsel individuals and organizations; to employ their homes for instruction and discussion; to sponsor students as candidates for fellowships or on-campus recognition; to handle individual or independent study (or even January-term courses) as overload.

Clearly, on these three points of value and faith, occupational relevance, and a caring and accessible faculty, we are responding in a way few of our competitors are to powerful and conscious needs among those, especially in our region, who seek higher education. Whatever we do, we must maintain our commitment to these needs -- and do so even as we restore our financial balance.

Achieving Financial Stability
The $4.5 million in operating losses we experienced from 1988-89 through 1992-93 are carried in our financial statements as a deficit. Although this deficit (now standing at $3.8 million after our positive 1993-94 results) is money we owe ourselves, it is perceived by our creditors as debt and therefore should be added to the $18.5 million that we owe to others. This long-term debt is the remainder of the $20 million the University borrowed from the Student Loan Marketing Association in December, 1990, to refinance $14 million still owing from construction projects finished as early as the 1970's and to obtain funding of about $6 million for new projects.

To restore confidence in our credit worthiness among our lenders and auditors and to gain access to other sources of capital, we are now obliged to extinguish our deficit by the year 2000, the year in which the remainder of our outstanding debt must be refinanced. The focus of this covenanted obligation is annual operating surpluses. These surpluses are to escalate rapidly, beginning with Fiscal 1994 (here, we exceeded the requirement by $200,000) and reaching $1.4 million in Fiscal 1999.

Principal added to the endowment helps us prove operational efficiency to our debt investors -- its growth reflects a confidence among our donors that the University is strategically focused and financially stable -- and it helps us fund our fastest rising expense (financial aid).

CONCLUSION

Competitive challenges already plainly at work in higher education in America are certain to build through the year 2000. If we are to obtain an enrollment of 3600-3700 by the year 2000, as later parts of this document suggest, we shall have to identify and cultivate our competitive advantages, especially in comparison with public institutions in the Pacific Northwest. It is with public institutions in our region that we are most directly competing, and to succeed in reaching our goals we shall have to control the cost of enrolling at PLU both by restraining our tuition increases and by dramatically raising the availability of financial aid.

But we must also make sure that the competition is not waged on the ground of price alone. We must see to it that it is also decided in part on grounds of quality that embrace both programs and the elements of culture and atmosphere discussed briefly here and more fully in Part II of this document. We must develop evidence that a PLU degree confers personal advantage upon its holders in an increasingly globalized, technologically dominated, and changing world. While this implies the extension of the jurisdiction of assessment from the class experience to the post-graduate elements of career and personal welfare, it suggests above all that we ourselves share a comprehensive and refined image of our purpose and institutional character.

Indeed, without clear agreement on these things, we cannot forge the kind of confident, welcoming, and productive community that is, in the end, the distinguishing feature of the University.

The experience of the last seven years has convinced us all that entering the 21st century in good order depends upon planning, the careful stewardship of our resources, and the extension of our remarkable tradition. The next section of this document offers an articulation of the widespread agreement that the planning process has revealed concerning the nature of that tradition and the strategy for its extension.